Sunday, August 19, 2012

Video + Tablets: The Mobile Catalyst for E-Commerce

Darcy Travlos,

In the US alone, there are 120 M smartphones and almost 60 M tablets accessing the Internet, and the adoption is growing by leaps and bounds.  IDC says that worldwide smartphone shipments will grow from 494M last year to 1.6B in 2016.  And, NPD says that tablet shipments will increase to 416M by 2017.
Shipments of the iPad and rival tablets will outshine those of notebooks in a few years.
Combined, the installed base is enormous, ubiquitous and engaging with their owners.  Investors, marketers, and companies want to know how to tap into these mobile devices and make money.  It is an opportunity and has proven to be a double-edged sword as well.  Facebook stock has been clobbered since its IPO largely on greater use of its site on mobile devices with less ability to deliver ads.

People love to watch videos on mobile devices.  Cisco reports that for the first time, video accounts for over half of all internet traffic on mobile devices, thanks to improved devices and bandwidth. And within four years, mobile devices will access over 70% of the video on the Internet.  Tablets appear to be the preferred device.  ComScore found that tablets users were three times as likely to watch a video than were smartphone users, and 10% of tablet users watch a video every day.

And, people prefer to shop on tablets more than on smartphones.  Monetate reported that in the first quarter of this year, traffic to e-commerce sites on tablets exceeded that from smartphones.   Tablet owners are a coveted audience:  38% of tablet owners have an annual household income in excess of $100K.  This translates into a higher average order value per transaction on a tablet (almost $125) compared to the PC (about $100) or smartphone (just over $75).

Video on mobile devices, particularly tablets, is shaping up to be a catalyst for e-commerce.  Comscore reports that e-commerce visitors who watch a video are 64% more likely to make a purchase than those that don’t.  In April 2012, 16.5 percent of mobile phone subscribers used a tablet, representing an increase of 11.8 percentage points in the past year. Growth in market penetration was even more apparent among the smartphone population with nearly 1 in 4 using a tablet device in April, an increase of 13.9 percentage points in the past year. A lower 10.4 percent of feature phone owners use a tablet, suggesting that smartphone ownership is highly predictive of tablet adoption in the current market.

Tablet Users Among Mobile Audiences
3 month avg. ending Apr. 2012 vs. Apr. 2011 
Total U.S. Mobile Subscribers (Smartphone & Non-Smartphone), Ages 13+ 
Source: comScore MobiLens
% of Audience that Uses Tablet
Apr-11Apr-12Point Change
Total Mobile (Feature Phone & Smartphone)4.7%16.5%11.8
Smartphone Only9.7%23.6%13.9
Feature Phone Only2.3%10.4%8.1
Invodo’s customers also can document that experience.  Golfsmith found a 64% increase in conversion rate for those products that had videos compared to those that did not.

A final interesting fact:  Of the retail videos accessed on a mobile device, over 70% of them are accessed by iOS (Apple) devices.

See more at "Video + Tablets: The Mobile Catalyst for E-Commerce (Watch out Amazon!)"

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