adobe 2016 mobile retail report

ADOBE 2016 MOBILE RETAIL REPORT

Adobe 2016 Mobile Retail Report

Methodology

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Adobe Analytics

Most comprehensive and accurate report of its kind in industryBased on analysis of aggregated and anonymous data

Adobe measures 80% of all online transactions from top 100 U.S. retailers ** $7.50 of every $10 spent online with top 500 U.S. retailers go through Adobe Marketing Cloud ** Report based on analysis of 290+ billion visits from 16,000+ mobile sites and 85+ billion app launches Companion research based on survey with 1,000+ U.S. consumers

Data from Adobe Marketing Cloud:

Adobe Mobile Services

Key Insights

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1. Smartphones are the primary drivers of growth, but retailers are struggling to getconsumers to spend at levels similar to desktop.

2. While 26% of shopping carts on a desktop turn into an order, smartphone carts only see a16% success rate. This indicates differing experiences and shopping behaviors.

3. Simply having an app doesn’t cut it; the app graveyard is getting larger due toabandonment and lack of mobile optimization.

4. E-commerce continues to grow, but possible troubles ahead: retailers stand to lose up to11% of potential revenue by Christmas 2017.


Smartphones drive growth

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Despite strong growth in visits for smartphones (+33% Q2 2016 YoY), overall visits for the average retailer remains flat:• Overall traffic increased 1%• Desktops and tablet visits shrank (-6% and -

10%, respectively)

Smartphones make up some of the revenue loss seen by average retailers on desktops and tablets:• Overall revenue increased 10%• Smartphones grew by 65% YoY, while desktops

and tablets both shrank by -2%Adobe 2016 Mobile Retail Report

Consumers addicted to mobile browsing

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Smartphone traffic is cannibalizing desktop on retail websites:• Desktop traffic share decreased -6% YoY• Smartphone traffic share increased +8% YoY

Mobile traffic is likely to overtake desktop by Q1 2018 for average US shopping sites

Desktop remains the cash cow

59% of traffic, 75% of total revenue Smartphones: 32% of traffic, only 16% of revenue


Smaller screens drive smaller orders

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Yet mobile consumers are more impulsive:

Desktop AOV is $155. Smartphone AOV is $120(desktop outperforms by $35)

Smartphone revenue-per-visit is 3.6x lower than ondesktop

Purchasing still takes place on larger screens:• Desktop conversion is 2.8x higher than

smartphone, tablet is 2x higher


Mobile shoppers abandon their shopping carts

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Mobile requires more to reach an order

Only 16% of shopping carts turn into orders on amobile device

Consumers switch to desktop for ease of navigation(30%), seeing images on a bigger screen (26%) and toenter payment information (16%)

Survey shows

Metric Smartphone Tablet Desktop

Cart Conversion Rate 16% 22% 26%

Visit Conversion Rate 1.0% 2.0% 2.8%


High abandonment leads to a larger app graveyard

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Consumers are only interested in the best apps on the market The average app saw 24% growth YoY, while the

top 20% saw 104% growth in app launches

Retail sees the highest abandonment rate: 60%of apps are used less than 10 times

Consumers aren’t interested in wide spread app use: 45% of U.S. consumers use 1-2 apps to shop

online (Source: ADI Mobile Survey 2016 (US)) 15% don’t use an app at all


App experience falls behind desktop:• 38% of U.S. consumers rate small

screen as a common frustration,followed by ads (35%) and the“pinch and zoom” functionality(32%)

• Other frustrations include slowperformance and poor navigation

Millennials are more resistant to app advertising:• Millennials cite irrelevant push

notifications and non-personalizedads as common frustrations (33%and 22%, respectively)

App frustrations

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The potential cost of a mobile shift

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• If overall traffic remains stagnant and smartphones continue cannibalizing desktops and tablets, thenretail companies stand to lose 11% of potential revenue by the end of 2017


Glossary

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The terms utilized in this report are defined as follows:

• Year over Year (YoY) - compares Q2 2016 to Q2 2015• Mobile - refers to combination of smartphone and tablet activity; each are

called out separately as appropriate• Launch - refers to starting a session with an app installed on a mobile device• Visit - refers to arriving at a website via a browser
