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mCommerce is mPortant, mKay?

Photo by Jason Howie (Flickr) Criteo, a company you’ve never heard of, is in the business helping companies to “empower …

By Dave Eagle

Photo by Jason Howie (Flickr)
Photo by Jason Howie (Flickr)

Criteo, a company you’ve never heard of, is in the business helping companies to “empower [their] performance marketing campaigns.” That’s the type of jargon that makes me want to optimize efficiencies within my merit based face-punch initiative, but it doesn’t dilute the relevance of what they’re doing.  See, when they’re not spewing jargon from their digital web-holes, the people at Criteo seem to be expertly mining data about the world of online commerce. I say that at the risk of sounding like an advertisement for this company I’ve never heard of either, but I’m about to cite some stats from their 2015 State of Mobile Commerce report and I need you to take them seriously for the rest of this post to hold water. The report itself relies on the analysis of over 3,000 online merchants and $160 billion worth of transactions, and from this statistician’s dream of a sample size, Criteo has concluded: “mobile commerce is growing like a weed.”

I never liked that cliche. The defining characteristic of a weed is that it grows where it isn’t wanted. That it doesn’t need tending or cultivating to thrive is irrelevant; the same plant might need extra attention in different circumstances.  And mobile commerce is neither unwanted nor self-reliant. It requires merchants and consumers alike to adopt the technology, which they are. But that isn’t due to some organic process like photosynthesis.  It’s because people are investing in technology that powers mobile commerce platforms, and nurturing it into a standard.  The fact is, mobile commerce is growing like a hybrid tomato.  To wit:

  • Globally, 34% of all eCommerce transactions happen from a mobile device (most of which are smartphones). That number is expected to rise to 40% by the end of the year.
  • Japan and South Korea are leading the way with mobile accounting for over 50% of online transactions.criteo-state-of-mobile-commerce-q1-2015-6-638
  • Another nine countries—including the UK, Spain, the US, and Germany—show significant increases in their rate of mCommerce

Clearly, mobile commerce is no longer the wave of the future—it’s the wave of today.  Smartphones are becoming more and more ubiquitous, with consumers increasingly reliant on the speed and convenience of buying stuff wherever they happen to be. Though Criteo’s report focuses solely on retail, not hospitality, there are nevertheless some statistics that are highly instructive when it comes to learning about consumer behavior.

  • In retail, the “Fashion & Luxury” and “Mass Merchants” (think Amazon and the like) categories showed the highest percentages of mobile transaction.
  • The “Home” category, showed the lowest.
  • In the US, smartphones account for the majority of mobile purchases (53%), while in Japan that number is at around 90%.
  • Smartphone growth is outpacing tablet growth, meaning more people are carrying their devices with them everywhere.

So what can a hospitality merchant learn from this?  Two things. First, mobile purchases are more likely to be impulse buys like fancy clothes or gadgets, rather than purchases that require more thought like furniture or home decor.  Second, the rate of smartphone adoption is growing just like the mCommerce is—it doesn’t take a leap to say these things are related. While your food isn’t exactly an impulse buy—people pretty much plan on eating everyday—ordering takeout or delivery is an exercise in convenience, and often a last minute decision. Adding a mobile ordering option for your customers makes it that much easier to make the decision.

Image courtesy of (Flickr)
Image courtesy of (Flickr)

Beyond offering a more compelling way to place the order in the first place, it’s a well documented fact that mobile commerce for hospitality has a direct effect on sales numbers; people who order food online, either at their desktop or on their phone, place larger orders than those who phone in or show up in person. More people on smartphones means a larger base of people spending more money.  With any number of mobile ordering platforms to choose from with low monthly fees and zero startup costs, the decision should be a no brainer.  

Photo by Martin Sharman (Flickr)
Photo by Martin Sharman (Flickr)

But if that’s not enough to persuade you, let’s look at two more telling statistics:

  • Retailers with the largest share of mobile transactions at the end of Q4 2014 showed the most growth—close to 10%—at the end of 2015 Q1.
  • Over the same time period, retailers with the smallest share were virtually stagnant, with a 1% improvement.

Those retailers at the top of the mobile marketplace are widening the gap by building off their early successes. And those at the bottom, according to Criteo, tended to lag behind the leaders in even the most basic mobile strategies, like optimizing content for smartphones and tablets.  In other words, avoid mobile at your own peril. With any disruptive technology, there comes a tipping point when ignoring it becomes more costly than adopting it.  For mobile commerce, that point appears to be now.