Its not you, its mobile.

Most retailers aren’t complaining because online sales continue to rise, but if you look at the trend you’ll see that conversion is down over the last 3 years.

OnlineSales_07-12

As they’ve watched their conversion rates decline many retailers wonder if they’re falling behind the industry. As part of our review of holiday shopping trends I looked at conversion rates across more than 500 retailers and found that the trend is affecting the whole industry. Even for top retailers (75th percentile) conversion has fallen from 6.94% to 3.56% since 2009.

Conversion_USRetail_Q407-Q412

So what’s with conversion rates? It can be argued that we’re seeing the effect of increased competition and that conversion rates will naturally fall as people spend more time shopping online—more shopping equals more visits per purchase. However, increased mobile visits is the primary factor at play here, and in particular visits from smartphones, not tablets. As we pointed out last January, visitors using a smartphone are much less likely to convert than their counterparts on tablets or on desktops/laptops. In this sense, tablets are more often used like traditional computers than like smartphones. Shoppers seem to prefer to use smartphones to browse, price check, and find store locations, while tablets, with larger, high resolution screens are ideal for final product review and purchase. As mobile drives more and more incremental traffic, retailers should expect overall conversion rates to fall. Incremental is the key here. Even at lower conversion rates, incremental traffic means more revenue.

ConversionAndSharebyDeviceType_USRetail_Dec'12

As the lines between tablet, surface, and laptop continue to blur, retailers should start looking more at clues about the circumstances in which the visitor is using each device. For example, comparing traffic from wifi vs. cell vs. wired devices should tell a lot. When a tablet is used via cell signal you might expect more smartphone-like use cases, but when wifi is in use, the tablet is likely to be taking the place of a traditional computer. I plan to look into differences in conversion by wireless connection type. Follow me @tyrwhite for an upcoming post on the subject and let me know what related trends you’ve seen.

Many retailers are starting to use unified customer IDs to fairly measure the added value of mobile optimization by focusing on visitor conversion rather than visit conversion. Michael @Halbrook and team can tell you more about that and other techniques to provide the best multi-screen experience.

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