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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Running to stand still?

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Mobile is continuing its upwards trajectory in terms of online traffic and sales, but are conversion rates increasing too? Emma Herrod investigates.



Mobile’s reach is apparent for all to see, and the rise of the mobile Christmas is expected to continue in 2017 when smartphones are predicted to account for half of November’s online sales in the UK. Ecommerce consultancy Salmon predicts that £10bn of the £20bn spent online will be made via mobile in this record-breaking month as shoppers reach for their phones to do their Christmas shopping.

Last year saw a strong penetration of smartphones, although desktops still accounted for around half of ecommerce traffic, according to Andy Mulcahy, Strategy and Insight Director at IMRG. But he says there are times when the different devices “come into their own”. Desktops, for instance, were the predominant online channel for sales in the week running up to Christmas 2016, while smartphones accounted for higher sales on Christmas Day, when people were supposed to be talking to their families.

“Mobile conversion rates are on an upward trend but they are still lower than desktop,” says Mulcahy. In 2016, the average conversion rate for desktops for the retail industry was 4.6%, compared with 4% for tablets and 2.3% for smartphones. This year, they are running at 4.7%, 4% and 2.4%, respectively. In 2015, the average smartphone conversion rate was just 1.8%.

Checkout abandonment on smartphones is also moving in the right direction for retailers. The Q2 2017/18 IMRG Capgemini Quarterly Benchmark Figures for May to July 2017 shows it at 36%, down from 45% at the beginning of 2016. However, as Mulcahy points out, checkout abandonment is inherent to the online shopping experience with studies showing ‘I changed my mind’ as the top reason given by shoppers for not completing the checkout process.

Checking out on mobile remains harder than on desktop, although larger smartphones did make it easier in the early days of mobile commerce for those shoppers who found it fiddly because of ‘fat fingers’.

As Anita Liu Harvey, Vice President, Strategy and Innovation at Barclaycard , explains, payments is one area in which there have been improvements in recent years but more are needed to make it easier by mobile. “It’s not so easy to pay on mobile at the moment so unless the retailer has one-touch payments, such as one-touch PayPal or ApplePay, the seamless experience is not there,” she says.

Retailers, though, have spent a lot of time optimising their sites for mobile shoppers, or taking a mobile-first approach to design. Every aspect of a customer journey is optimised for small screens, fat fingers, smartphone keyboards and 4G download speeds.

What is harder to optimise for is the ease with which people can be distracted from completing a purchase on a mobile phone, since they could be out and about or interrupted by a call or a message.

REDUCING FRICTION



Among those reaping the rewards of optimising for mobile is Shop Direct, which operates digital department stores Very.co.uk , Littlewoods.com , VeryExclusive.co.uk and LittlewoodsIreland.ie. It has reported its fifth successive year of record sales and underlying profits. “Once again, Very and m-commerce were the big drivers of our growth,” says Group CEO Alex Baldock.

More than half its online sales – 53% – are now made via smartphone, a milestone it passed for the first time during its financial year to 1 July, and a 10% increase on 2016.

Interior design brand Graham & Brown has recently updated its mobile site to improve its appeal to younger, tech-savvy shoppers. One significant change it has made is to reduce the length of the product pages, hiding alternative product images from the main view but making them available by scrolling via the main image. This has increased the conversion rate by 36% and the average order value by 5%.

It has also tested altering the colour of the mobile ‘add-to-basket’ button. For UK shoppers, a simple change to green has increased AOV by 4% and the conversion rate by 2%. In the US, the company has seen even better results with AOV boosted by 42% and the conversion rate by 11%.

Simon Farthing, Global Director Strategy and Insights at Monetate , which worked on the site with Graham & Brown, comments: “Graham & Brown is an example of a popular, prominent British retailer who truly understands how even the smallest amount of testing can reap massive results.”

COLOUR CHANGE



But it’s not just the large retailers that are working on their mobile offering. More than half of retailers are currently investing in a frictionless mobile experience and 40% plan to do so in the next two years, according to the ‘Impact of innovation in the mobile customer journey’ White Paper by InternetRetailing in conjunction with Ingenico . It found that 75% of retailers believe that a frictionless experience is an essential part of the commercial offering and a further 22% say that it is a nice to have. However, only 39% describe themselves as being mobile first with 57% of respondents saying their main focus is a responsive website for both desktop and mobile. One respondent comments: “You must be fit for purpose for a smartphone user – UX, services, speed – or choose to kill your business.”

As interiors company Graham & Brown discovered, green seems to be most effective colour for the ‘add to basket’ button at the moment. A study by IMRG has found this to be common on the mobile sites of the best-performing retailers. The button also needs to be large and on its own line, explains Mulcahy. The IMRG’s customer funnel study also suggests:



    • Keeping the checkout process to 3-4 pages, with unfolding data input boxes on a clean, white background;



    • Placing a floating, itemised basket on the site so the customer can see their items as they scroll.



    • Observations from the worst performing retailers show the following should be avoided:



    • A poor mobile experience relative to desktop;



    • Asking for unnecessary information;



    • Displaying cramped text or small buttons.




Speed, too, is an issue with mobile performance. According to Google research, retailers have, on average, the slowest mobile sites of the 11 industries measured – with a load speed chugging in at 10.29 seconds. Some 53% of visits are abandoned if a mobile site takes three seconds or more to load and, if mobile users are kept waiting just 1-5 seconds too long, the probability of them bouncing spikes by 90%. Add just another second, and that figures rises to 106%.

With one in three online purchases being made via mobile, that means many sales are being lost needlessly, says Google.

SPEED TO PLEASE



“As one of the most mature ecommerce markets, the fact that the UK lags behind in terms of mobile speeds is a serious issue for brands, advertisers and publishers alike,” says Raja Saggi, Head of SMB Marketing at Google UK and IE. “As most consumers are ready to abandon a site that takes over three seconds to load, the average UK speed of 8.9 seconds is a sure way to lose potential revenue. Almost a third of online shopping takes place over mobile, and we can only expect that to increase, so it’s important to address this as soon as possible. Optimising your site for mobile and addressing these speed issues can be relatively simple, and a crucial step for businesses looking to provide a good online experience.”

Electricals retailer AO.com agrees. When it sponsored TV show ‘Britain’s Got Talent’ earlier this year, it knew that its mobile site would have to cope with a significant uplift in traffic during the advert breaks, although it wouldn’t know exactly how much.“It would be peaky and very fast,” says Adam Warne, Group IT Director at AO.com.

Understanding that it would only get one chance to impress a new customer who was second screening in front of the television, Warne knew that if the website didn’t handle the traffic it we could dissuade a potential customer from returning. He explains that speeding up the mobile site was “fundamentally for the customer”, helping to build trust in the brand and reduce friction.

In the longer term, speed is also a factor in converting customers. As Jason Miller, Chief Strategist Commerce at Akamai points out, there’s a direct correlation between load times and conversion. Even one tenth of a second reduces conversion by 7% on mobile. When the delay increases to one second it plummets by 18%, he explains.

“Optimising for the customer is key,” says Warne. He recommends:



    • Have the right metrics in place. This is critical as you have to constantly disprove your own theories;



    • Optimise the right pages for your customers. Just pick a page that most of your customers see and try to influence some metrics that matter;



    • Be sensible with your resources and people. Don’t use your team for something technology can do. They are better used elsewhere;



    • Ensure you system is robust. This is vital as your customers won’t give you a second chance.




“If you do the right thing for the customer all the other good things will come as a result,” he adds.

So, conversion rates on smartphones across the retail industry are increasing, but it is taking a whole host of factors – from the customer journey and simplifying navigation and product pages, to testing for the right colour, location and size of every button and reducing friction from the checkout pages – to do it. Every percentage point in the right direction is a big win for retailers as traffic to mobile phones continues to rise. The retailers that are focusing resources and investment on mobile channels are reaping the rewards. Now, if they can just be engaging enough to stop shoppers from being distracted... ooh, what’s that I’ve just seen from the bus window?

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