Study: Mobile E-Commerce Sales Projected To Reach $50B By End Of 2014

In its latest round of reports, Custora claims mobile ecommerce revenue is set to reach $50 billion by the end of this year, up nearly $8 billion since last year, and an astounding $48 billion since 2010.

Analyzing ecommerce data from more than 100 retailers, 70 million consumers and $10 billion in transactions, Custora found mobile traffic to ecommerce sites has increased from three-percent to nearly 37 percent in the last four years, while mobile ecommerce revenue climbed from $2.2 billion in 2010 to $42.8 billion last year.

Custora’s numbers prove mobile devices continue to take a larger share of desktop ecommerce traffic, with mobile phones seeing more than a 20 percent increase in the last four years, and tablets more than doubling their share of ecommerce site visits since 2012.

At 32.9 percent, Custora found direct traffic to be the primary driver of mobile phone ecommerce purchases. Email marketing drove 26.7 percent of mobile phone ecommerce orders, and organic search accounted for 16 percent. Less than one percent of mobile phone ecommerce orders were attached to social.

While paid search represented 13.35 percent of ecommerce orders on phones, it was the highest driver of purchases on tablets at 24.8 percent.

The study showed desktops still dominate in terms of conversion rates, with desktop conversion rates at 4.3 percent and mobile at 1.4 percent between January 2013 through March of this year.

From the report:

Mobile phone conversion and AOV (average order value) are both markedly lower compared to desktop computers. This might stem from “showrooming”, app browsing, and shoppers’ preference to buy high ticket items at the comfort of their bigger desktop screens.

Evaluating specific mobile brand usage, Custora discovered the iPhone, while still in the lead, is experiencing a downward trend in ecommerce activity. The number of ecommerce orders made on iPhones decreased from 75.1 percent to 53.6 percent during the last two years.

The number of ecommerce orders made on Samsung phones is moving in the opposite direction, jumping from 6.9 percent to 30.5 percent during the same time period.

For tablets, iPads own a significant share of ecommerce orders at 79.9 percent, while Samsung tablets accounted for 12.4 percent, and Amazon Kindle Fires showed up with 4.1 percent market share.

Even as mobile numbers grow, Custora reports the CLV (customer lifetime value) of online shoppers who buy exclusively from their mobile phones is 22 percent lower than shoppers who buy exclusively from their desktop.

Custora says the value of a mobile online shopper is lower than a desktop shopper because their average order value is lower. The report surveyed online shoppers and found many were more likely to make a purchase from their mobile device after they had established trust with the retailer via a desktop purchase.

“Many of the shoppers we interviewed feel more comfortable making the first purchase with a retailer on a desktop computer,” claimed the report, “Once trust has been established after the first successful transaction, they are more willing to make repeat purchases on a mobile device.”

The study found only 12 percent of consumers were performing cross-device shopping as of Q1 2014, but that number is climbing. In 2012, only 4 percent of online shoppers had made ecommerce orders on more than one device.