Mobile Ecommerce: Revenue, Usage, and Statistics
The Internet has changed the way that we consume.
Today, more than ever, buyers have the power to purchase items from virtually any retailer in the world. That’s why the ecommerce industry has been booming.
Advancements in technology are also changing how consumers behave and how they purchase products and services.
Look around you. It seems like everyone has a smartphone glued to their hands at all times.
So it’s no surprise that more than half of all Internet traffic comes from mobile devices.
But mobile users are doing much more than just using these devices to browse online. They are also using phones and tablets to buy.
In fact, 62% of people who own a smartphone have made a purchase using their device in the past six months.
Simply put, people are using mobile devices to buy.
From a business perspective, you need to recognize the latest mobile trends and adapt accordingly.
There are two main ways for consumers to make purchases from mobile devices. They can buy from mobile websites or directly from mobile applications.
Some of you may already have a mobile friendly website. But that’s just not enough.
You need to develop a mobile app to maximize your revenue opportunity.
Use the data and statistics that I’ve researched in this post to help you make an informed decision about going mobile or launching a mobile app for your ecommerce business.
Key Mobile Commerce Statistics
- 82% of Internet users in the United States have used a mobile device to shop online
- 35% of US consumers use only their mobile device to buy online
- In 2017, the US had $156 billion in mobile commerce sales
- By 2021, experts estimate that US mobile commerce sales will eclipse $420 billion
- Conversion rates from mobile apps are three times higher than mobile sites
- Mobile shoppers spend twice as much money as other customers
- 53% of smartphone users buy from company-specific apps
- 42% of smartphone users plan to do more shopping from their mobile devices in the coming year
Mobile Commerce Usage and Revenue
Mobile commerce is on the rise.
It’s been growing and will continue to grow at a rapid rate in the coming years. Take a look at this graph to see what I’m talking about.
What portion of your company’s sales comes from mobile devices?
If you haven’t been targeting mobile users, the first thing you need to do is make sure that you have a mobile-friendly website.
This will make a huge difference in your mobile conversion rates. In fact, a mobile-friendly site makes it 67% more likely that a customer will buy a product or service online.
On the flip side, if a website is not friendly from mobile devices, there is a 61% higher chance that the customer will leave and go to another website.
For those of you who don’t currently have a site that has been optimized for mobile devices, I’m willing to bet that you’re struggling to drive mobile commerce sales. People are going to buy from your competitors instead.
Don’t get me wrong, I’m not saying this to discourage you. It’s not too late to implement a mobile-friendly design.
In addition to the layout, your mobile site also needs to load fast to be effective.
According to research from Google, the bounce rates on mobile sites increase to 32% as page loading times go from one second to three seconds.
The probability of a bounce increases by 90% if that loading time reaches five seconds and 106% from one second to six seconds.
If you’re not sure how well your existing site performs on mobile devices, simply take advantage of a free mobile-friendly test tool.
Mobile App Usage
Mobile websites aren’t the only way for consumers to buy from their mobile devices.
As I said before, mobile apps are the other method. Today, this has become absolutely necessary for all businesses.
That’s because the majority of mobile time is spent using apps.
On average, people spend 3 hours and 40 minutes using their mobile devices each day. Just 10% of that time is spent on a mobile web browser.
So if you’re relying on a mobile site alone to drive revenue for your business, you’re missing out on a huge opportunity.
The reality is that mobile users prefer apps over a mobile browser. The data is clear.
51% of people open a mobile app up to ten times each day.
25% of people open a single app between 11 and 20 times each day. An additional 16% of mobile users open the same app 21 to 50 times daily.
As you can see from these numbers, not only are consumers spending the majority of their mobile time on apps, but they are opening those apps numerous times throughout the day.
So if you can launch an app and get people to download it, the chances of them opening it more than once during the day is high.
With each open, it also increases the chances of the user making a purchase.
I know what some of you are thinking. Sure, people are opening mobile apps dozens of times throughout the day, but what kind of apps are they opening? Are they really going to buy products from these apps?
In fact, shopping apps have the highest growth rate in terms of year-over-year sessions.
Just look at how these types of apps compared to the other apps on the list.
What’s even more impressive is where shopping apps rank compared to the average year-over-year sessions of all categories.
The usage of mobile shopping apps is 48% higher than average. This is a great opportunity for any business that sells products and services online.
Mobile App Revenue
So how much money is actually being made with mobile apps?
As an expert in this industry, people often ask me if there is really enough of an opportunity for smaller businesses to generate revenue with mobile apps.
There is plenty of money to go around.
Average mobile app revenue per user
In order to have a successful app, you need to get downloads.
As long as you’re able to get people to install your app on their mobile devices, those downloads will ultimately translate to dollars. The more users you have, the more money you’ll make.
Exactly how much money are we talking about here?
Let’s take a look at the benchmarks for different industries and types of apps.
At first glance, these numbers may not seem that high to you. But once you start doing some math, you’ll realize that how much money can be made.
For example, let’s say you have a shopping app for your retail business.
In a three month stretch, the average revenue per organic user is $20.63, based on the benchmarks in the graph above.
Again, on the surface, $20 doesn’t seem like much. But think about that number when you scale it. If you have 100,000 downloads, that translates to more than $2 million in revenue per quarter.
At that rate, you’ll get $8 million in revenue annually.
Those are modest estimates.
Remember, we’re just using data from the average benchmarks. If your app can outperform the averages, you’ll make even more money. Those figures could easily double or triple.
Plus, that figure was for 100,000 downloads. Just wait until you get to more than one million installs for your mobile app.
Global mobile app revenue
Mobile app usage and revenue shouldn’t just be limited to the United States, although lots of the data we looked at so far focused on American consumption.
But I wanted to give you a better idea of where mobile app revenue stands on a global scale.
Mobile app usage is rising in popularity worldwide, which is translating to revenue growth all over the world.
From 2016 to 2017, there was a 35% increase in gross app revenue. That’s a massive number, especially when we’re talking about billions of dollars here.
I’m not expecting that growth rate to slow down at any time in the near future, and neither are other experts.
In fact, it’s predicted that we’ll reach $189 billion in app revenue worldwide by 2020.
Why is this important for you?
Well, even if you’re only focusing on US markets today, you might consider targeting mobile users in other countries in the future. It’s encouraging to know that there is definitely an opportunity for you to be successful penetrating new markets across the globe.
Mobile App vs. Mobile Site
OK, so we talked about the importance of having a mobile-friendly website earlier. I’ve also shown you how much money is being made with mobile apps.
So which one is more important for your business? It’s time to compare the two.
In short, you need both to be successful. But with that said, having a mobile app is definitely more important and necessary to drive the most revenue.
That’s because 78% of people would rather access a store from an app compared to a mobile website. These are the top reasons why consumers prefer mobile apps.
As you can see, consumers say that apps are more convenient and faster than mobile websites.
Plus, their settings and stored. Not only is this easier for the customer, but it also increases the chances for them to buy. But we’ll talk about that in greater detail shortly.
Here’s something else to keep in mind. Customers who buy from an app spent two times more than customers who shop from mobile sites and desktop devices.
Furthermore, consumers also spend three to four times longer browsing on mobile apps than they do from desktop and mobile sites.
There is a trend here. The longer they spend browsing, the greater chance they have of buying, and spending more money.
Mobile app users will be your most loyal customers.
That’s because they are twice as likely to return to your store within 30 days, compared to people who buy from a mobile site.
This relates back to why customers prefer mobile apps over mobile sites. They get benefits and rewards for using the app, which helps personalize their experience.
You can enhance your business mobile app by implementing a customer loyalty program through that platform.
Understanding your conversion rates is a key component to running a successful ecommerce business.
How many people are navigating to your website each day? What percentage of those visitors are converting?
If those numbers are too low, you’ll have to identify what’s wrong with your conversion funnel.
The same concepts can be applied to customers accessing your store from mobile devices, whether it be from a mobile site or mobile app.
Look at the difference between a mobile browser and mobile app.
Users view nearly four times as many products from an app and add items to their cart at roughly double the date compared to mobile websites.
Conversions are 130% higher on apps.
Why? Apps are just easier and more convenient to use.
Shopping cart abandonment rates
With higher conversion rates, mobile apps also have lower shopping cart abandonment rates than both desktop websites and mobile browsers.
Just look at these numbers to illustrate my point.
As you can see, mobile sites have the highest abandonment rates of the three options.
The reason why cart abandonment rates are lower for mobile apps is the same reason why their conversion rates are higher. Mobile apps simplify the checkout process.
When a customer wants to buy something from a mobile website, it takes much longer.
After they add an item to their cart, they have to input all of their information. I’m referring to things like:
- phone number
- email address
- shipping address
- billing address
- credit card number
That’s a lot of information to type with your thumbs on a four-inch screen. Even if someone wants to go through this process, there is a chance that they make a mistake and have to start over.
But all of this information is stored on mobile apps, so there’s less friction.
Mobile app users have the ability to check out in just a few clicks.
Plus, if they leave something in their shopping cart, you have a better opportunity of getting that user to ultimately convert. In addition to sending cart abandonment emails, you can reach mobile users with push notifications reminding them about items left in their cart.
You won’t have this option from mobile browsers.
Average order value
So far we’ve established that mobile app users convert at higher rates than people browsing on mobile sites and have lower shopping cart abandonment rates.
Now let’s compare how much money people spend on different platforms.
Mobile apps have an average order value that’s 10% higher than mobile websites.
So if you want customers that convert at high rates and spend more money, you’ll definitely want to use a mobile app to your advantage.
This is a winning formula to drive business growth.
Mobile Commerce Sales by Device
Not all mobile devices are created equally.
Consumers have different usage statistics and spending habits based on the type of the device that they’re using.
Let’s compare some of the different devices to show you what I’m talking about. You can use this information to target your customers accordingly based on what they’re using.
Smartphone vs. tablet
First, let’s talk about the two different types of mobile devices.
Smartphone users use their devices differently than tablet users. When it comes to mobile commerce shares, smartphones perform better.
As you can see from this graph, smartphones generate more sales than tablets.
It’s been a trend for the past three years, and it’s continuing to trend in that direction in the future.
But that doesn’t mean you shouldn’t keep tablet users in mind when you’re designing your mobile app. Tablets still account for a quarter of total mobile commerce sales.
You have to be sure that your UX is great for every device.
So make sure you understand why screen size and screen resolution is important. Then you can plan and design your app accordingly.
Android vs. iOS
Apple and Android users behave differently as well.
Most businesses don’t realize it, but the spending habits of these two groups of people are very different. Just look at the average amount spent per transaction from each operating system.
Apple users spend nearly triple the amount of Android users.
This is something to keep in mind when you’re deciding if you want to launch your app on iOS or Android first. There are more Android users globally, but Apple users spend more money.
With this in mind, you won’t need to worry about which platform to build for first if you develop a hybrid app or progressive web app. This gives you the opportunity to launch on both the Apple App Store and Google Play Store simultaneously.
We just covered lots of data, so give yourself a moment to let it sink in.
What exactly does all of this mean?
In short, your business needs to focus on mobile users.
Having a mobile-friendly website is important, but if you want to generate the most revenue and maximize your potential, you’ll need to develop a mobile app.
Customers prefer mobile apps. That’s where they are spending the most money.
Refer back to all the data we covered comparing the conversion rates, cart abandonment rates, and average order values between mobile apps and mobile websites.
Apps outperformed mobile sites in every category.
Now that you’ve recognized the need for a mobile app, it’s time to get started. This can seem a bit intimidating if you’ve never done this before, but it doesn’t need to be.
For those of you who need help building a custom mobile app for your business, we can help you out. Just contact us, and we’ll help you increase your mobile commerce sales with an app.
What percentage of your company’s ecommerce revenue comes from mobile devices?