The Apple Myth, And Why Size Matters For Mobile Conversions

At NRF’s Big Show 2014, I presented some new data that changes the way we think about smartphones and online conversions.

It’s well documented that Apple iOS devices account for the lion’s share of mobile conversions. In December 2013, 85% of mobile conversions were on Apple devices, with less than 10% on Android. IPads alone accounted for 72% of mobile conversions, showing that tablets are increasingly being used for e-Commerce purchases in place of desktops. But while the “Apple demographic” is well understood, what is less understood is how the mobile commerce (m-Commerce) landscape is changing, towards smartphones with large screens, and specifically Android high-end smartphones.

Only six months ago, in June 2013, m-Commerce equated to 13% of e-Commerce conversions by volume. By December, mobile conversions had grown by 46%. But interestingly, much of the growth stemmed from the rapid rise in phone conversions, from a quarter of mobile conversions six months ago, to almost one third in December.

{loadposition TSHBAIAA022014} Given that the number of smartphones exceeds tablets many times over, this shows how rapidly m-Commerce is going to grow — specifically via smartphones.  

Gartner is forecasting that there may be as many as one billion Android devices sold in 2014, so while Apple may dominate mobile commerce today, understanding more about Android mobile purchasing is really important as it is the future of mobile due to the sheer number of devices in the market.

In July, SeeWhy published data revealing how Apple devices are used by a different type of user: A younger, more affluent and more educated demographic that is more conscious of style and brand than price. This research still holds true, but we now know that it is incomplete because it fails to account for the range of devices that make up the Android market. While Apple is essentially one phone and one tablet device (with small variations), the Android market is made up of a massive range of devices from different manufacturers with widely varying price points and capabilities.

For example, you can buy an LG 840G Android phone for as little as $30. It has a 3.2” screen and basic smartphone functionality. This is a very different device from a Samsung Galaxy 4, now available for $250 with a massive 5” screen size, and critically, a very different type of buyer at opposite end of the economic spectrum.

Using small screens to enter billing and shipping details, passwords and credit card numbers accurately is a challenge that defeats most consumers. So it’s no surprise that the Galaxy has a shopping cart conversion rate almost three times higher than that of the LG (9.2% compared with 3.2%).

In fact, the Galaxy has a significantly higher conversion rate than the iPhone (9.2% compared with 6.5%). How is this possible? Conventional wisdom suggests that the iPhone demographic should surely convert higher.

This shows that while the user experience on iPhone, coupled with upmarket users, results in a high proportion of these users shopping online on their phones, it’s only part of the story. High-end Android devices convert better than iPhone, with Galaxy users spending more time browsing, converting more frequently and spending more on average than their iPhone equivalents.

The illustration above shows different devices with their shopping cart conversion rates in December 2013. The data is based on a sample of more than 4,000 e-Commerce sites and more than 150 million web events. What this shows is that the screen size may have as much to do with the conversion rate as anything and that we cannot treat all types of Android devices equally.

What does this mean for e-Commerce teams?

1. High-end customers buy Android, too. We’ve all gotten used to the idea that iOS devices are used by wealthy, style-conscious shoppers who shop frequently on their mobile devices, spend more and consequently represent the bulk of m-Commerce revenues. While this is true, we need to recognize that as consumers increasingly use their phones for data primarily, and voice secondarily, screen size will become the dominant factor that affects whether a given visitor will buy at that moment on that device, irrespective of operating system. 

2. Don’t optimize for Apple exclusively. Current data shows e-Commerce teams that 85% of mobile revenues are coming from iOS devices, so while it’s very important to ensure that Apple device users have a great user experience, the rate of growth of Android, and the higher conversion rate of high-end Android devices shows that e-Commerce teams should not exclusively focus on Apple optimizations. Android is going to be really, really important due to the rapid growth of smartphone conversions and the dominant share of Android devices.

3. Checkout optimizations are critical. Smartphones suffer from smaller screens, which make checkout processes really hard. Some e-Commerce companies are seeing more than 40% of their conversions coming from mobile devices. This is no accident — they have made it easy to log into existing accounts, store payment details and provide alternative payments, all of which eliminate the need to enter address and card details.

Greater usability on mobile is key, especially in the checkout process.  Apple may have the advantage today in terms of generating the majority of ecommerce revenues, but the rapid growth of the Android market suggests that high-end Android devices are going to be a significant source of revenue in the future. Maybe we’re seeing the emergence of the “affluent smartphone demographic,” made up of consumers who have high-end devices with big screens and shop extensively online using them, irrespective of operating system.

Charles Nicholls is Chief Strategy Officer of SeeWhy, provider of online shopping cart recovery solutions. He also is Chair of The SeeWhy Conversion Academy.