Mobile Holiday Shopping Report Card

2015 is here. The holidays are over, and resolutions have already been made (and a few probably broken by now, too). And, the kids are back in school after the holiday break. So, in the spirit of school being back in session, we thought it might be fun to create a report card all about about how mobile commerce performed over the 2014 holiday season. 

Overall, it was certainly a good season for e-commerce – online shopping racked up ~$53.3 billion in sales which was 15 percent more than the 2013 season. While not all of those dollars came from mobile – indeed the majority of consumers still return to the desktop when it is time to buy – the 2014 holiday season sort of cinched the deal. Mobile is changing just  about everything about the commerce experience – from where people shop, when they shop, what they expect and how they approach the entire buying process. 

All that said, it isn’t perfect. Our review found that mobile performs well on some levels when it comes to payments and commerce and even overachieves on some. In others, though, there’s clearly need for improvement.

So, how did it do last holiday season? We have the PYMNTS report card right here…

“E” Is For Excellent: Mobile Is Performing Well 

We saw a number of very powerful indications that mobile was successfully reaching consumers and meaningfully effecting their shopping habits. Most of the industry-wide numbers indicate that mobile prevalence across the board is on the upswing. For instance, Amazon reported that 60 percent of their shoppers used their mobile devices to make purchases on the Amazon site, up from 50 percent last year.  More impressive perhaps, Amazon’s smartphone app also saw twice as many users as it did in 2013.

And Amazon wasn’t alone in noting big increases. PayPal saw its mobile volume increase too. As in a lot (~ 44 percent). Now while not the 91 percent increase it saw in 2013, it was still a rather staggering result since the 41 percent growth was on a much larger base.

On the whole though, mobile-enabled volume was up 16 percent in 2014 and represented 22 percent of all online sales.  Mobile actually did somewhat better on “special” shopping days – on Black Friday, for example, mobile was responsible for 27 percent of all online sales.

Mobile’s real strength during the 2014 holiday season, however, was in driving traffic to web sites of retailers.  On both Thanksgiving and Christmas  (two days when consumers are highly likely to go shopping online because physical locations are closed) mobile — for the first time — drove the majority of web traffic in 2014.  Walmart, which had record breaking days on both Black Friday, Cyber Monday and Green Saturday in terms of pageviews, reported that 70 percent of its web traffic came from mobile during the holiday season, a significant increase from 2013.

But driving web site traffic and influencing online spending habits isn’t the only thing that mobile delivered. Mobile is also changing holiday spending patterns, in particular the ones that see deals clustered around certain days.

Soren Mills, chief marketing officer at Newegg Inc., an online electronics retailer, told Bloomberg that people are “realizing it’s a season of shopping that is no longer limited to one or two days. People are turning it from a day-long occasion to a month long occasion.”

That month long occasion is becoming increasingly global.  According to  PayPal’s Head of Global Consumer Initiatives, Pablo Rodriguez  worldwide, PayPal’s total mobile volume was up 52 percent during the holiday shopping season’s “kick-off” weekend.  Mobile also delivered big for PayPal globally on Cyber Monday, too, with a 39 percent uptick in transaction volume. He further noted in his interview with MPD CEO Karen Webster, that mobile is making online shopping possible cross-border increasingly prevalent, and PayPal and services like it, can act as a trusted middleman so that merchants and consumers who don’t otherwise “know” each other can be made comfortable transacting, now that technology has made that possible.

All in, according to Rodriguez, the real story in 2014 about year is about mobile is how it is able to touch every aspect of how consumers shop.

“It was fascinating for me to see the photos of shoppers this year in the brick-and-mortar stores whose carts were filled,” Rodriguez said. “I think there’s still the importance of ‘the get’ for those who want to go out in stores and explore. But even those consumers are still using their mobile devices to compare prices and to even shop for items online while waiting in line to pay.” 

“S” Is For Satisfactory: Mobile Is Performing, But Still Has Room To Improve

Mobile payment statistics can be confusing and conflicting. And there still aren’t a lot of consumers who can actually use a phone to pay for something in a physical store. And that’s where there is room for improvement.  

A National Retail Federation survey showed just over half of respondents surveyed said they would use a mobile payment option for in-store purchases. But there aren’t a whole lot of places for consumers to use those phones for payment – and/or a lot of phones for them to use.

Apple Pay is the new mobile payments kid on the block with lots of consumers interest but lots of room to grow in terms of merchant adoption. And for merchants to care they have to see lots of consumers clamoring to use it. We’re just not there yet – in store, the plastic card is just hard to beat.

“It is clear that people are interested in mobile payments but it doesn’t mean they’re going to abandon their cards,” said Thiago Olson, CEO of Stratos. “Our research shows that while American smartphone users would like to use their smartphones to pay for gifts at department stores, they are less likely to want to use the same system to pay at a hotel, upscale restaurant, or a bar.”

“A” is for Apple: Online sales via Apple devices outperformed those on Android devices by a factor of ~3.

IBM research showed that 27 percent of online sales occurred on iOS devices, which was more than three-times more than the 8 percent Android devices accounted for. Now, of course that is correlated heavily to the more affluent nature of the Apple base versus the Android user base, but an interesting and noteworthy stat.

“Demographics of Apple users play a big part… but Apple got the user experiences right… It’s easier for people to navigate and buy on iOS,” said Jay Henderson, director of IBM Smarter Commerce. “People are browsing and buying more on mobile.”

On Thanksgiving Day, Apple iOS device owners accounted for 21.9 percent of online sales, compared with just 5.77 percent on Android-powered devices, according to IBM’s data.