OCTOBER 2013

eMarketer

Mobile Commerce Roundup

US retail mcommerce sales growth has been dramatic over the past few years, albeit from a small base. But sales of products and services made to digital buyers using mobile phones and tablets will reach nearly $41 billion this year, or 16.0% of total retail ecommerce sales. eMarketer has curated a roundup of key trends, statistics and information relevant to retailers who can no longer ignore the mobile lives of digital shoppers.

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Mobile Commerce Roundup

Mobile Commerce Roundup Overview

OCTOBER 2013

US retail mcommerce sales will reach nearly $41 billion this year, up a dramatic 68.2% over 2012 levels and that represents a drop in growth rates since 2011 and 2012. Continued robust double-digit growth will lead to more than $113 billion in retail mcommerce sales in the US by 2017, eMarketer estimates. Mcommerce already accounts for a sizeable share of retail ecommerce sales in the country, at a projected 16.0% this year, up from 11.0% in 2012. By 2016, one-quarter of all retail ecommerce sales will be conducted on mobile devices, including mobile phones and tablets. Rising sales are being propelled by a growing population of mobile buyers, which will number 79.5 million strong this year. That means more than half of all digital buyers will make a purchase on a mobile device this year, up from less than one in four in 2011. By 2017, the vast majority of digital buyers will be purchasing via mobile devices. Purchasing via tablet has already become even more popular than smartphone-based mcommerce: Nearly nine in 10 mobile buyers this year will buy something from their tablet, compared to about two-thirds who will buy via smartphone.
US Retail Mcommerce Sales, 2011-2017 billions, % change and % of retail ecommerce sales
$113.57 171.7% $96.81 $75.00 82.6% $41.68 $24.78 $13.57 7.0% 2011 11.0% 2012 16.0% 2013 19.0% 2014 22.0% 2015 68.2% 36.1% 32.2% 29.1% 25.0% 2016 26.0% 17.3% 2017 $56.72

Retail mcommerce sales % change % of retail ecommerce sales Note: includes products or services ordered using the internet via mobile devices, regardless of the method of payment or fulllment; excludes travel and event ticket sales; includes sales on tablets Source: eMarketer, Sep 2013
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US Mobile Buyers, by Device, 2011-2017

2011 2012 2013 2014 2015 2016 2017 Mobile buyers (millions) % of digital buyers Buyers on smartphone (millions) % of mobile buyers % of digital buyers Buyers on tablet (millions) % of tablet users % of mobile buyers % of digital buyers 34.0 57.0 79.5 98.9 115.0 129.0 140.8

23.7% 38.2% 51.1% 61.1% 68.6% 74.1% 78.3% 26.2 41.3 52.3 63.5 74.0 83.2 91.0

% of smartphone users 29.0% 35.0% 38.5% 41.0% 43.0% 44.5% 45.5% 77.2% 72.3% 65.8% 64.2% 64.4% 64.5% 64.6% 18.3% 27.6% 33.6% 39.2% 44.1% 47.8% 50.6% 15.4 49.8 71.1 83.7 93.7 104.4 109.7

50.0% 58.0% 63.0% 68.0% 72.0% 77.0% 78.0% 45.4% 87.3% 89.4% 84.7% 81.5% 80.9% 77.9%

10.8% 33.3% 45.7% 51.8% 55.9% 60.0% 61.0% Note: ages 14+; mobile device users who have used their mobile device to make at least one purchase via web browser or mobile app during the calendar year Source: eMarketer, Sep 2013
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Mobile Commerce Roundup

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Mobile Devices to Boost US Holiday Ecommerce Sales Growth

Mcommerce to increase its share of total ecommerce retail sales
Mobile devices account for a rapidly growing share of US retail ecommerce sales, and are expected to contribute to strong ecommerce sales growth this holiday season, according to eMarketers latest estimates.
eMarketer projects that retail ecommerce holiday sales in the US will rise about 15% again this year, matching last years gains. In total, US retail ecommerce sales for the holiday seasondefined as November and Decemberare expected to reach $61.8 billion, up from $53.7 billion last year. Mcommerce is expected to play an important part in overall digital holiday retail spending. This year, mobile devices will account for a larger-than-expected share of total US retail ecommerce sales, according to the newly revised forecast. eMarketer expects that mobiles share will reach 16% in 2013, up from our previous prediction of a 15% mcommerce share this year. The revision comes as data sets from multiple research sources showed mcommerce as a percent of retail ecommerce sales reached record highs earlier this year. In addition, large retailers, such as Best Buy and Home Depot, continue to invest heavily in smartphones and tablets, building out their mobile app and website offerings, and increasing spending on digital advertising in an effort to drive more conversions across devices and compete with companies with strong mobile infrastructure like Amazon and eBay. In total, eMarketer predicts retail mcommerce sales will reach $41.68 billion this year, and by 2017, retail sales made on mobile devices will climb to well over $100 billion. eMarketer believes mobile devices contribute to overall commerce sales growth in two ways, both as a driver of total sales, as more consumers make purchases on their smartphones and tablets, and, increasingly, as a shopping research tool, driving consumers into stores or back to desktops where they complete transactions.
US Retail Ecommerce Holiday Season Sales, 2011-2013 billions and % change
$61.8 $53.7 $46.6

16.8% 2011

15.2% 2012 % change

15.1% 2013

Retail ecommerce holiday season sales

Note: eMarketer benchmarks its retail ecommerce sales gures against US Department of Commerce data, for which the last full year measured was 2012; includes products or services ordered using the internet, regardless of the method of payment or fulllment; excludes travel and event tickets; sales are for Nov and Dec of each year Source: eMarketer, Sep 2013
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US Retail Mcommerce Sales, 2011-2017 billions, % change and % of retail ecommerce sales
$113.57 171.7% $96.81 $75.00 82.6% $41.68 $24.78 $13.57 7.0% 2011 11.0% 2012 16.0% 2013 19.0% 2014 22.0% 2015 68.2% 36.1% 32.2% 29.1% 25.0% 2016 26.0% 17.3% 2017 $56.72

Retail mcommerce sales % change % of retail ecommerce sales Note: includes products or services ordered using the internet via mobile devices, regardless of the method of payment or fulllment; excludes travel and event ticket sales; includes sales on tablets Source: eMarketer, Sep 2013
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Mobile Devices to Boost US Holiday Ecommerce Sales Growth (continued)

Tablets are particularly significant for mcommerce sales growth. As more consumers have embraced these devices for lean-back browsing of potential purchases, retailers have made greater efforts to make sure their tablet retail sites and apps are particularly rich and responsive. This year, eMarketer predicts, tablet retail mcommerce sales will hit $26.05 billion, or 62.5% of US retail mcommerce sales overall. Thats up from last year, when tablets took a 56.2% share of mcommerce retail sales. That will leave smartphones with a 35.0% share of mcommerce sales, a percentage that will continue shrinking throughout the forecast period as sales on tablets maintain far higher growth rates. In 2017, smartphones will account for 27.0% of retail mcommerce sales, eMarketer predicts. But actual sales dollars spent on purchases made via smartphones will continue growing at healthy double-digit rates. This year, retail sales made on smartphones will total $14.59 billion, and that figure will more than double to $30.66 billion by 2017. For the full-year 2013, total US retail ecommerce sales are expected to reach $262.3 billion, growing by 16.4% during the year. eMarketer predicts growth in the fourth quarter will reach 15.5% over the same period last year. Thats compared to Q4 2012, when the US Department of Commerce reported a retail ecommerce gain of 15.73%. eMarketer bases its retail ecommerce, mcommerce and holiday sales figures on analysis of data from its benchmark source, the US Department of Commerce, estimates from other research firms, historical trends, reported and estimated revenues from major online retailers, consumer online buying trends, indicators of macro-level economic conditions and eMarketer interviews with executives at retailers, brands, ecommerce vendors and other industry leaders. In this case, eMarketer evaluated more than 300 datapoints collected from over 60 research sourcesanalyzing methodology, definitions and historical accuracy of each before building its model for US retail ecommerce, mcommerce and holiday sales.
US Retail Mcommerce Sales, by Device, 2011-2017 billions and % change
2011 Tablet % change Smartphone % change 2012 2013 87.0% 47.1% $1.04 10.6% 68.2% 2014 43.3% 24.4% $1.25 19.8% 36.1% 2015 2016 2017 19.3% 13.1% $1.70 3.5% 17.3% $5.43 $13.93 $26.05 $37.32 $51.00 $68.06 $81.20 352.8% 156.5% $7.47 119.8% 32.8% $0.94 38.8% 82.6% 36.7% 33.5% 24.0% 20.5% $1.50 $1.65 20.2% 9.7% $9.91 $14.59 $18.15 $22.50 $27.11 $30.66

Other mobile $0.68 devices % change Total % change 69.8% 171.7%

$13.57 $24.78 $41.68 $56.72 $75.00 $96.81 $113.57 32.2% 29.1%

Note: includes products or services ordered using the internet via mobile devices, regardless of the method of payment or fulllment; excludes travel and event ticket sales Source: eMarketer, Sep 2013
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US Retail Ecommerce Sales, Q1-Q4 2013 billions and % change vs. same quarter of prior year
$83.2

$58.1

$60.2

$60.7

16.3% Q1 2013

18.4% Q2 2013

16.0% Q3 2013*

15.5% Q4 2013*

Retail ecommerce sales % change vs. same quarter of prior year Note: eMarketer benchmarks its retail ecommerce sales gures against US Department of Commerce data, for which the last quarter measured was Q2 2013; includes products or services ordered using the internet, regardless of the method of payment or fulllment; excludes travel and event tickets; *eMarketer estimate Source: eMarketer, Sep 2013
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Mobile Commerce Roundup

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US Mobile Payments to Top $1 Billion in 2013

Limited adoption by consumers and merchants
Despite slower growth than previously expected, proximity mobile payments will top $1 billion in the US this year, according to new figures from eMarketer, before expanding rapidly to reach an estimated $58 billion by 2017.
eMarketer defines mobile payments as transactions for goods or services made by scanning, tapping, swiping or checking in with a mobile phone at the point of sale. Often characterized as a proximity or contactless payment, mobile payments occur real time in the real world, and are functionally different than mobile commercethe purchase of digital or physical goods on a mobile device. Driven by consumers buying items like daily coffee via closed-loop payment systems, as well as an increase in bigger-ticket purchases made via smartphones, mobile payment transactions more than tripled from 2011 to 2012 in the US, eMarketer estimates, reaching $539 million last year.
US Proximity Mobile Payment Transaction Value, 2011-2017 billions and % change
273.8% 225.6% 173.0% $58.42

in

$26.45 148.6% 93.4% $0.17 2011 $0.54 2012 $1.04 2013 $2.59 2014 2015 2016 2017 120.8% $9.69

in

Still, the market is growing slower than previously expected, Proximity mobile payment transaction value % change as evidenced by eMarketers scaled-back estimates of user Note: point-of-sale transactions made by using a mobile device as a payment method; includes scanning, tapping, swiping or checking in with a adoption and transaction value from initial projections in mobile device at the point of sale to complete transaction; excludes purchases of digital goods on mobile devices, purchases made remotely on October 2012. Delays and adoption issues facing numerous mobile devices that are delivered later on, and transactions made via tablets mobile wallet initiatives, as well as a congested landscape of Source: eMarketer, July 2013 159492 www.eMarketer.com competing technologies, materially affect eMarketers outlook on mobile payment transaction values, which will not top $20 billion until 2016. The previous forecast predicted mobile payments would top $20 billion by 2015. Additionally, low-value purchases will still comprise the majority of transactions in 2013, causing a dip in the growth rate. These estimates are based on the following key assumptions and variables: In the near term, light users experimenting with low-dollar purchases will dominate the mobile payment audience; a smaller segment of heavy users who habitually buy their daily coffee, for example, with a mobile payment system will increase over the forecast period. The significant jump in total and per-user spending over the forecast period will be driven by consumers adopting mobile payments for a wider array of products and services constituting an equally broad gamut of price points. eMarketer views this diversification as critical to driving habitual consumption, which is crucial for moving mobile payments into the mainstream.
US Proximity Mobile Payment Forecast, 2011-2017
2011 Proximity 2.7 mobile payment users (millions) % change % of 3.0% smartphone users % of mobile phone users 1.2% 2012 7.1 2013 10.9 2014 17.0 2015 29.3 2016 41.2 2017 54.1

160.7% 53.6% 6.0% 3.1% 8.0% 4.7%

56.7% 11.0% 7.3%

71.9% 17.0% 12.4%

40.7% 22.0% 17.2%

31.3% 27.0% 22.3%

Proximity $166 mobile payment transaction value (millions) % change -

$539 $1,043 $2,592

$9,688 $26,452 $58,415

225.6% 93.4% 148.6%

273.8%

173.0%

120.8%

$61.00 $76.20 $95.95 $152.24 $331.09 $642.35 $1,080.65 Average spend per user

Note: ages 14+; includes point-of-sale transactions made by using mobile devices as a payment method; excludes transactions made via tablet Source: eMarketer, July 2013
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US Mobile Payments to Top $1 Billion in 2013 (continued)

Increased activity among these regular users is contingent on the assumption that more mainstream merchants will accept mobile payments of some kind. For example, near field communication (NFC) adoption remains a wild card. On the one hand, NFC-enabled hardware continues to proliferate. On the other hand, US mobile payment platforms reliant on NFC have, so far, failed to gain traction among consumers and merchants, even as other methods and technologies have picked up steam. The failure of large-scale mobile payment schemes to take root in 2012 put many merchants and consumers in a wait and see mode, resulting in lowered estimates. Consumers will also need to find the experience of using a mobile payment platform sufficiently convenient and valuable enough to encourage repeat use. Integration of proximity payments with other mobile commerce activities will contribute to increased consumer awareness and use, encouraging uptake, while concerns about security and smartphone battery life will gradually ebb as consumers grow more familiar with the different systems available. Absent these conditions, the market may not develop as predicted in the model. While the number of transactions and users have increased, a fragmented mobile wallet landscape could stifle the path to more rapid adoption. In contrast, if hardware and infrastructure impediments are resolved in a shorter timeframe, and adoption clusters around specific mobile wallets or payment mechanisms, allowing large-scale mobile wallets to make inroads with consumers and merchants, the proximity payments opportunity could accelerate at a faster rate. Numerous forecasts tracked by eMarketer attempt to quantify the global mobile payments opportunity, although estimates vary widely based on the scope of how each research firm defines what constitutes a mobile payment, as well differing methodologies and assumptions of what will drive market growth. Players in the mobile payments value chain currently operate at a country-specific level due to local regulations and infrastructure considerations, meaning that regional perspectives can be more insightful than a global aggregate view. Most researchers expect global mobile payments will reach transaction volume in the hundreds of billions of dollars by 2017. Despite these generally optimistic projections, discrepancies in scope, as well as downward revisions of past forecasts, underscore just how much the market is still in its early stages. eMarketers estimates are based on an analysis of the market presence of major mobile payment players; estimates from other research firms; and consumer smartphone, mobile payment adoption and retail spending trends. In this case, eMarketer evaluated more than a hundred data points from over 30 research sourcesanalyzing the methodology, definitions and historical accuracy of each before incorporating them into our own model.
Comparative Estimates: Mobile Payment Transaction Volume Worldwide, 2011-2017 billions
2011 Gartner, June 2013 Yankee Group**, April 2013 Gartner, May 2012 NPD In-Stat*, March 2012 2012 2013 2014 2015 2016 2017 $721.0 $163.0 $235.0

$60.7 $126.2 $230.3 $371.0 $531.2 $71.0 $617.0 $9.9 $998.5 $366.7 -

$105.9 $171.5 $1.1 -

IE Market Research, $47.2 Feb 2012 Informa Telecoms & Media**, Sep 2011 Yankee Group**, Sep 2012 Juniper Research, Aug 2012 $2.4 -

$1,300.0

Note: *NFC/barcodes only; **NFC only Source: various, as noted, 2011 & 2012
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Affluent Shoppers Make Mobile an Essential Stop in the Purchase Funnel

Discounts get affluent mobile shoppers to buy
The wealthy consumer is highly likely to own a smartphone or tablet, and the devices are becoming critical shopping tools for these high-income individuals. In April 2013, the Luxury Institute surveyed US internet users ages 21 and older with gross incomes above $150,000 and found that more than eight in 10 owned a smartphone, while 56% reported owning a tablet. These penetration rates are well above those for the overall US population on smartphones or tablets.
As affluent consumers become increasingly comfortable with their smart mobile devices, they are turning to them throughout the purchase process. The Luxury Institute found that the most common smartphone mcommerce activity was looking up store information. After this came product research and comparison shopping. On tablets, consumers were most likely to look up product images and read user reviews and recommendations. This points to the increasing importance for luxury retailers to make sure they have an attractive, interactive tablet showcase for their products, as tablets serve as lean-back devices, which consumers often use to get to know potential purchases. When it came to making actual purchases, the store still won out as the most common place to make a purchase among affluent consumers, cited by 78% of respondents. Purchasing via the desktop web was right behind, however, cited by 77%. Women were 6 percentage points more likely than men to make a purchase through this means, while men showed a greater proclivity to buy on mobile. Mobile websites on tablets were the place where the greatest percentage of shoppers made mobile purchases, at one out of five affluent consumers. Another 11% used a tablet app to make a purchase. Fourteen percent of affluent consumers used the mobile web on a nontablet device to buy and 12% used a mobile app. And even if affluent shoppers have plenty of cash at their disposal, that doesnt mean a deal wont help them convert. On tablets, special deals or price discounts were the No. 1 reason respondents would purchase via these devices, with 43% indicating that would sway them. On smartphones, special deals tied with ease of use, at 45%, as top reasons to complete a purchase on the device.
Mcommerce Activities of US Afuent Smartphone vs. Tablet Users, April 2013 % of respondents in each group
Smartphone Tablet (n=634) (n=889) Search for store information (times, directions, etc.) Look up product details while on-the-go Compare prices while shopping in-store View product images Receive special deals or discounts Compare prices while on-the-go Look up product details while shopping in-store Read user reviews and recommendations Check the status of an order Check availability at other retailers Opt-in to receive marketing messages Watch product videos 49% 33% 29% 28% 28% 27% 27% 26% 23% 20% 11% 10% 41% 18% 13% 42% 22% 15% 11% 42% 36% 24% 10% 21%

Note: ages 21+ with a minimum gross annual income of $150,000 Source: Luxury Institute, "Luxury Institute WealthSurvey: Multi-Channel Purchase and Behaviors," May 9, 2013
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Shopping Channels Used to Make Purchases Among US Afuent Internet Users, by Demographic, April 2013 % of respondents in each group
Gender Male Female Stores Websites using a computer Websites using a tablet Mailers or catalogs Telephone customer service rep Websites using a mobile device Mobile app Tablet app Other 78% 74% 20% 13% 17% 78% 80% 20% 22% 14% Age <50 50+ 78% 78% 78% 76% 26% 16% 13% 20% 15% 16% Income $150K- $200K+ Total $199K 83% 80% 17% 18% 15% 74% 75% 22% 17% 15% 78% 77% 20% 17% 15%

16% 14% 11% 2%

13% 10% 11% 2%

25% 20% 15% 2%

8% 7% 8% 2%

11% 9% 8% 1%

17% 14% 13% 2%

14% 12% 11% 2%

Note: n=1,205 ages 21+ with a minimum gross annual income of $150,000; in the past 12 months Source: Luxury Institute, "Luxury Institute WealthSurvey: Multi-Channel Purchase and Behaviors," May 9, 2013
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Tablets Give Beauty Brands a New Canvas

Shoppers most often use tablets for product research, though buying via the device is on the rise
Tablets touchscreens create opportunities for hands-on experiences for consumers, and a platform for brands to showcase products. The content that beauty consumers devour in magazinessuch as tutorials, product reviews and diagnostic quizzesare ripe for the interactive opportunities that tablets can provide.
A survey from the Online Publishers Association compared product research with product purchase by category among tablet users in March 2013. OPA found that while the percentage of those who purchased personal care and beauty products was only 17%, that number was higher than in other categories, such as food and beverage, and health, healthcare and pharmaceuticals. In addition, the gap on tablets between the percentage who researched vs. the percentage who bought was among the narrowest for the personal care and beauty category. Although the number of tablet shoppers is rapidly increasing, and mcommerce sales are also rising fast, it is important to keep the numbers in perspective. A March 2013 study from marketing companies SheSpeaks and Lippe Taylor found that just 8% of surveyed female internet users most often made purchases through a mobile device or tablet. Purchasing via tablet may be nascent, but beauty industry experts say that ecommerce is just one function offered by the device. Research via tablets is becoming more ingrained for many users, even as sales remain relatively small. We see this every time we launch a new product, said Alessio Rossi, vice president of digital marketing for ecommerce and customer relationship management (CRM) at Lancme. There is a lot of engagement, and there is a lot of [tablet] traffic that occurs online, but not as many transactions. Customers are more likely to make replenishment beauty product purchases via the tablet. Beauty consumers crave content: the how-tos, the reviews, the before-and-afters, the What is my best lipstick color? quizzes. This type of content is being consumed increasingly often on tablets. The tablet is becoming the ecommerce tool, said Caroline Grange, international digital and ebusiness director for cosmetic brand Makeup Forever. For us, its an investment in our future buyer.
Select Tablet Advertiser Categories to Which US Tablet Owners Are Most Likely to Respond, by Gender, Jan 2013 % of respondents in each group
Food/restaurants 52% 43% Apparel 40% 29% Beauty 37% 14% Leisure activities/events 32% 27% Female Male

Note: n=1,000 Source: Mojiva, "Tablets Rule: A Consumer Snapshot on Tablet Use and Tablet Advertising," April 10, 2013
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Products Researched and Purchased via Tablet According to US Tablet Users, March 2012 % of respondents
Researched Consumer electronics Restaurants/fast food Media and entertainment Retail and apparel Food and beverage Sports/recreation/hobbies Travel service Personal care and beauty Automotive (including parts) Health, healthcare and pharma Financial services, insurance, real estate Telecom, B2B/B2C services Home furnishings 37% 36% 35% 35% 30% 30% 30% 28% 25% 24% 23% 22% 21% Purchased 19% 16% 22% 21% 15% 11% 13% 17% 7% 9% 10% 9% 10%

Note: n=710 ages 8-64; in the past 6 months Source: Online Publishers Association (OPA), "A Portrait of Today's Tablet User - Wave II" conducted by Frank N. Magid Associates, June 18, 2012
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Mobile Becoming Moms Daily Shopping Companion

Clothing and beauty were top mobile shopping categories
There is no question that mobile is becoming an essential shopping tool for many US moms. According to a March 2013 survey from retail solutions company Alliance Data, more than half of surveyed mom internet users reported using their smartphone or tablet at least weekly for some aspect of shopping, whether it be research or buying. And 35% of respondents said they used their device daily for shopping purposes.
Mobiles usefulness for shopping is easy to see. Convenience and a better ability to price compare were the top reasons moms reported using their device as they moved through the purchase funnel. Clothing and beauty ranked as the top product categories for which moms shopped on their smartphones and tablets, at 56% and 47%, respectively. Households products ranked third, researched by 42% of respondents, a significant figure for CPG brands, which have already moved quickly into the mobile advertising space. Showroomingthe practice of going into stores to compare products and prices, often using mobile to shop aroundis common among moms, as well. At both electronics and bigbox retailers, half of mom mobile shoppers surveyed said they used their smartphone or tablet to look up product and price info. This was slightly less common at clothing, grocery and shoe stores, but more than one-third of respondents still had shopped at each of these locations using mobile devices.
US Mom Internet Users Who Use a Smartphone/Tablet as Part of the Shopping Process, by Frequency, March 2013 % of respondents
Don't have a mobile device 11% Never use mobile device to shop 28%

Daily 35%

Only every few months, or just a couple times a year 6%

156984

Weekly 16% Once a month 4%

Source: Alliance Data, "The Mobile Mom," April 11, 2013

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However, mobile is not the primary method US moms prefer for shopping. Only 11% of respondents said this was the shopping method they would choose, if given only one option. And according to December 2012 research from parenting app company Alt12, about two-thirds of moms said they did less than half of their shopping on mobile. But as mobile browsing becomes more common, and retailers improve their multichannel efforts, there is no question that more moms will favor smartphones and tablets for their shopping and buying.
Amount of Shopping Conducted on Smartphone or Tablet According to US Moms*, Dec 2012 % of total
3.0% All (90%-100%) 12.3% 18.6% 34.7% 31.4%

Most of (60%-90%) About half (40%-60%) Some (10%-40%)

None or very little (0%-9%) Note: n=1,362; *internet or mobile phone users Source: Alt12, Jan 9, 2013
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Majority of US Mobile Consumers Use Devices to Comparison Shop

Shopping-specific apps see heavy use
Mobile commerce is grabbing an ever-growing slice of the overall ecommerce pie. eMarketer estimates that 15% of all US online retail sales in 2013 will be made on a mobile device, an increase from 11% in 2012.
Those projections correspond with an April 2013 survey of US mobile internet users conducted by AYTM Market Research that demonstrates just how common mcommerce has become for mobile internet users. According to the poll, 55% of respondents had ever made a purchase on their mobile device, although only 9% did so with great frequency. Researching products and prices on mobile was an even more popular shopping activity. In fact, 72% of respondents said they had used their phone to research product prices or seek a better deal online, with 22% saying they did so often. Apps, in particular, appear to be playing an important role in leading shoppers down the path to purchase. Just more than one-third of respondents said they had downloaded an app specific to a particular store, making it the most popular type of shopping app used by consumers. That was followed by local store/shopping locator apps (26%), general coupon apps (25.5%) and daily deal apps (22.5%). Figuring prominently in the mcommerce landscape are tablets, the ownership of which correlate strongly to digital purchases. eMarketer estimates that 63% of US tablet users will make a purchase on the device this year, with that percentage growing to 78% by 2017.
US Internet Users Who Use Their Mobile Devices to Purchase Products Online, April 2013 % of respondents
Yes, often 9% Yes, sometimes 27%

Never 45% Rarely 19%

Source: AYTM Market Research as cited in company blog, May 1, 2013

156705 www.eMarketer.com

Types of Shopping Apps that US Internet Users Have Downloaded on Their Mobile Devices, April 2013 % of respondents
Shopping apps for particular stores Local store/shopping locator General coupon apps Daily deals apps 9.5% 22.5% Other shopping apps 26.0% 25.5% 34.0%

Source: AYTM Market Research as cited in company blog, May 1, 2013

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College Students Deal Hunt on Mobile

Mobile plays a role in more of everyday life for college students
College students have a voracious appetite for mobile apps that help them socialize and communicate. And a November 2012 online survey of 689 US college students conducted by Study Breaks and Campus2Careers finds that they are also committed mobile deal hunters.
Nine out of 10 respondents reported using their phones to scour for deals, coupons and specials; just 10% said they never did so. Moreover, 20% of surveyed college students were self-professed mobile deal addicts, saying they always checked their phones for the latest dealsanother 31% checked their phones for deals often. In other words, over half of college students, 51%, were committed mobile deal aficionados. As one might expect, the large numbers of students looking for purchases with phones in hand translates to large numbers of students making purchases through their phones. The study found that 70% of sampled college students made mobile purchases, and 52% did so at least once a month. But the fact that students are focused on shopping and buying via mobile doesnt mean theyre neglecting their social lives. When asked to name their most frequent mobile activity, other than talking or texting, fully 25% of respondents said accessing Facebook, while another 14% cited rival social network Twitter. Email was a close second overall, with 23% citing it as their No. 1 mobile task. Taken together, 62% considered some form of digital communication to be their top mobile priority. The only other categories to crack double digits were music (11%) and other (12%). Additionally, college students are using mobile phones increasingly for classwork, a sign that the devices really have penetrated nearly every aspect of student life. Over half of respondents said they used their mobile phone for schoolrelated tasks every day.
Frequency with Which US College Student Mobile Phone Owners Use Their Mobile Device to Find Deals, Nov 2012 % of total
Never 10% Rarely 14%

Always 20%

Sometimes 25%

Often 31%

Note: ages 18+; coupons, deals, drink specials, etc. Source: Study Breaks and Campus2Careers, Feb 14, 2013
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Most Frequent Mobile Activity Among US College Student Mobile Phone Owners, Nov 2012 % of respondents
Facebook Email Twitter Music Maps Search Games Other 5% 5% 4% 12% 11% 14% 25% 23%

Note: ages 18+; other than talking or texting; numbers may not add up to 100% due to rounding Source: Study Breaks and Campus2Careers, Feb 14, 2013
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How Mobile Affects the Path to Purchase for adidas

Kerri Smith
Director of Mobility
iProspect

eMarketer: How do your mobile goals differ from your desktop goals? Smith: The goals for mobile are pretty similar to desktop in terms of proving out a direct response, an ROI [return on investment] or looking for traffic and engagement advantages. But we do have some clients that are specifically leveraging [mobile] to drive consumers to the store. The main goal for most of our brands, which are in the performance and ecommerce categories, is that they want to drive revenues and return. The bigger difference is in how we are evaluating the performance of these. eMarketer: To what degree are your clients invested in mobile search engine optimization (SEO) and search engine marketing (SEM)? Smith: Ninety-five percent of our brands that are running desktop pay-per-click (PPC) with us are also running mobile PPC with us. [For most of them] its basically a company directive in that they need to be there and understand the space. If theyre doing work with iProspect, its going to mean that there will be mobile optimizations. The majority of our brands are invested at least somewhat in mobile. Some brands may be minimally invested around 10%. For others, were seeing that mobile is taking up 30%-plus of their budget, based on the results that theyre seeing and driving from the channel. eMarketer: What impact will Googles AdWords enhancements have on mobile SEM? Smith: The changes will be massive. Its almost as if Google is punishing advertisers that were advanced enough to really understand the idiosyncrasies of the different devices. A lot of what Google is stating as their reasons for making this change is to make it simpler for advertisers. I actually think it works against a lot of what they had been promoting for the past two years in that theyve been promoting a specific experience because it is differentthe needs of those consumers are different, the devices are different.

adidas and iProspect, its digital agency, initiated a mobile campaign in fall 2012 to measure device impact on in-store conversions, resulting in a 683% incremental lift in revenues. Kerri Smith, iProspects director of mobility, spoke with eMarketers Danielle Drolet about the adidas effort and iProspects overall mobile search strategy when working with brands, including implementation of Googles new AdWords enhanced campaigns.
eMarketer: What formula are you using to see how mobile is driving in-store conversions? Kerri Smith: With mobile, there are a lot of direct responses that indicate a specific level of intent and/or give the advertiser an ability to influence that consumer at different stages. In traditional desktop, direct response typically means a conversion. With mobile, we have to pay attention to the responses, including store locator clicks, click-to-call or downloading an application. All of those indicate a certain level of intent from our consumers and may influence and affect their ultimate decision to purchase. It is similar in theory and concept to Googles idea of the full value of mobile, the big difference being in how we are applying these different concepts to different brands, as well as the amount of credit were willing to give them. For us, its not so much trying to claim that these responses are conversions because we understand that theyre not. Its more about understanding the role theyre playing in that consumers path to purchase. And what ability we have to not only evaluate those but also influence them.

The goals for mobile are pretty similar to desktop in terms of proving out a direct response, an ROI or looking for traffic and engagement advantages.

Mobile Commerce Roundup

Copyright 2013 eMarketer, Inc. All rights reserved. 12

How Mobile Affects the Path to Purchase for Adidas (continued)

Its almost as if Google is punishing advertisers that were advanced enough to really understand the idiosyncrasies of the different devices.
With enhanced campaigns, theyre taking away the control that we have to create unique experiences for those consumers. Not only will we be less able to see where the performance is coming from and to optimize our budget to be efficient as an advertiser, but it will hurt the consumer as well. Essentially, youre telling the advertiser that theres nothing special or unique that they have to do for those users. Its almost like advocating against creating a mobile-specific site or really working to leverage the channel the best way that you can. eMarketer: What are your clients biggest concerns? And what are you doing to ease their fears? Smith: The majority of our brands are really not happy about the changes. They are mostly nervous that their cost-per-clicks are going to go up dramatically. Right now, in preparation for the June migration date, weve got several test brands in beta across multiple verticals so that we can help brand marketers understand campaign structure, as well as bid, ad copy and landing page strategies. The concept of redefining direct response is extremely important, especially in the next couple of months, as enhanced campaigns take away our visibility in understanding campaigns. We want to make sure that we can optimize that experience and evaluate it in a way that is holisticto understand the impact to the brands bottom line vs. that one-to-one media spend to drive revenues.

Mobile Commerce Roundup

Copyright 2013 eMarketer, Inc. All rights reserved. 13

Personalize experiences. Connect interactions. Drive results.

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