2017 was yet another successful year for the rise of digital commerce, unsurprisingly with high growth in the mobile sector. We saw the year come to a strong close with record numbers during the holiday season, making days with $1 billion+ in sales the norm. On Cyber Monday, the mobile industry saw 40% year-over-year growth, hitting a record high of $2 billion in sales completed on a smartphone and desktop surpassed $3 billion. So what does this mean as we say goodbye to Q1 and get settled into 2018? Comscore released their State of the U.S. Online Retail Economy to help inform us.

The State of Mobile Commerce

Q4 of 2017 surpassed $131 billion in retail digital commerce, that's 20% year-over-year growth. And total digital commerce had grown to account for nearly 1 in 5 discretionary dollars spent by consumers. When it comes to mobile specifically, it now accounts for a much more meaningful share of total digital commerce dollars, with Q4 2017 share reaching a period high 24%. In terms of discretionary spending, mobile commerce growth significantly outpaced e-Commerce & brick and mortar in Q4 growth.

Brands are taking note, doing their best to stand out and innovate in the mobile-first commerce world users are demanding. From Macy's in-store mobile checkout to Dunkin's Google Assistant mobile ordering, brands are getting more creative day after day to amass their share of the mobile commerce pie.

"We are focused on leveraging the most innovative, relevant technologies to make accessing our mobile ordering platform as easy as possible. Our new integration with the Google Assistant is yet another exciting example of our commitment to enhancing speed, convenience and our overall brand experience for our loyal guests."
Sherrill Kaplan, Vice President of Digital Innovation at Dunkin' Brands

And they're not alone. Retailers recognize the significant growth of mobile commerce and are applying innovative strategies to both digital and physical experiences.

It's Amazing to be Amazon

One can never be certain as user's get more sophisticated each day, but Comscore's data points to a few trends taking over. It seems like Amazon has it figured out as they are where users spend the most time and money. The Amazon app is a clear winner with nearly 100M unique visitors, followed (not so closely) by Walmart (37M) and Wish (31M).

What has Amazon mastered that other brands can learn from? Well for starters, Amazon has officially become the starting place— consumers visit Amazon at the very beginning of their buyer's journey when they're still discovering potential purchases.

  • 68% visited Amazon in the 7 days leading up to their transaction
  • 41% of the time, Amazon was the 1st retail site visited in the 7 days leading up to their retail purchase
  • 28% visited Amazon in the same session as their retail purchase [from another brand]

Consumers spend more time on Amazon than they do on the remaining top 10 retailers combined. This is thanks to their abundance of inventory (for almost every price point), search optimizations, and an expected good user experience. There's hope for other retailers, it's just going to demand a focus on mobile optimizations.

Mobile is Still a Challenge

Despite the significant opportunity and innovation progress, mobile is still a difficult challenge for brands to tackle since we're not all Amazon (and even they don't have mobile totally figured out). In fact, we can see that there is still a significant gap between time spent and dollars spent on mobile, showcasing a true conversion issue.

Despite the growth in mobile, many of the long-time barriers to transacting on mobile devices are still evident. Buyer flows on mobile are long (on average, it takes 150 taps to make a purchase) and often break— sending users to the app store when they already have the app installed or to the homepage when they clicked on a product, not to mention smaller screens aren't optimal for entering personal data. Pairing technical hurdles with merchant competition and pricing considerations (shipping is noted as costing "too much"), we can easily see why conversion rates are hurting across the board on mobile.

The top 10 retailers have a majority of digital audience visiting on mobile, so it's critical to keep mobile at the forefront of all business strategies. There are a variety of tactics that the industry has seen work— Comscore notes that free shipping continues to be an important factor for consumers shopping. Providing purchase incentives and cashback rewards has helped some of Button's mobile partners find success in capturing users during moments of mobile purchase intent. Creating a positive user experience is imperative as users are more likely to return and repeat a positive purchase experience— with Button powered mobile flows, there's a 27% increase in time spent post-purchase.

Fixing mobile conversion is at the heart of Button's mission. By enabling partnerships between Publishers and Merchants with a user-first, mobile-only approach, we've seen conversion rates skyrocket, helping fix this monetary gap. As we grow and develop our business strategies in 2018, ask yourself— what are you doing to optimize for mobile conversion and capture your share of the $1.4 trillion (and growing) mobile commerce industry?

Like what you read? Download Button and App Annie's 2017 Index: The Mobile Consumer for even more mobile insights.