Why Multi-Device is the Future of E-commerce [Expert Insights]

Listen to the authors present their findings (source: October 2018 JM Webinar)

Mobile devices are the first and most important touchpoint. The world’s five billion users engage with their phones 76 times a day on average, spending up to 145 minutes online and touching phones 2,617 times.

Many companies are shifting to a mobile-first sales strategy as a consequence. However, the reality is that mobile conversion rates are low and most online sales occur elsewhere: on a desktop or laptop computer.

What does that mean for mobile sales? Is online shopping more complex than previously thought? Should retailers refocus or downscale their mobile ambitions?

Our research team was fascinated by this puzzle and by the lack of study data on cross-device sales—sales where browsing or research occurs on mobile devices, and deeper product exploration and sales occur on a desktop or laptop computer.

Certainly, retailers can use the help. While Amazon gobbles up an increasing amount of wallet share with the world’s consumers, 43% of retailers surveyed in the August 2018 CMO Survey reported that mobile marketing contributed only moderately or better to overall performance. However, our team felt that it was important to widen the focus beyond mobile device conversion to explore mobile device usage on the path to purchase.

Using clickstream data from a large European online retailer, we explored why multidevice users seem to be so much more valuable than mobile users. For almost a year, we observed customer interactions across thousands of products and 30 product categories. We focused on customers who engaged in two or more sessions that belonged to the same purchase path (i.e., the customer was looking at the same product or product categories in each session, as opposed to sessions that focused on unrelated products each time). 

Our findings show that conversion rates are higher when consumers start on a mobile device and end on a less mobile device, such as a desktop or laptop computer, versus when purchase paths start on a less mobile device. Thus, user time spent exploring and evaluating a product on a smartphone is extremely valuable from a marketing standpoint even when it doesn’t lead to same-session conversion. We also found that there is a much higher conversion rate when customers explore more expensive products on mobile before making a final purchase on less mobile devices.

Notably, many customers seem to switch devices during the purchase path because they are unfamiliar with their mobile device and feel that they are mitigating risk by making the final purchase on a fixed device. As customers become more familiar with mobile devices, we expect their need to mitigate risk will decrease, leading to a reduction in the impact that switching devices has on conversions for those customers.

We also found that customer age can play a role in conversion rates when devices are switched during purchase paths. Moving from a mobile to a less mobile device has a much more significant effect on conversions in older consumers. Again, this may be related to older customers having less experience on mobile devices or taking a more cautious approach towards making purchases on mobile devices.

These findings indicate that multidevice customers may potentially be more valuable than single-device users and warrant a higher level of marketing focus. For example, leading retailer Amazon provides cross-device shopping baskets that ensure the items in customers’ mobile shopping carts appear in their shopping carts on their desktop computers. Going a step further, marketers can also track mobile devices shopping baskets and send purchase reminders when customers are likely near their computers.

Marketers should continue to enhance the mobile customer experience, even if current conversion rates are low, but focus on their part in a more complex path to purchase. Mobile devices play an invaluable role in supporting the final (and often more lucrative) conversions that occur on fixed devices. Mobile devices can also help identify moments in the path to purchase where conversion rates increase significantly, even doubling. If marketers can track their customers across different devices, they can fulfill the promise of online shopping—targeting customers, providing more effective marketing and service, and increasing conversions.

Read the full article.

From: Evert de Haan, P.K. Kannan, Peter C. Verhoef, and Thorsten Wiesel (2018), “Device Switching in Online Purchasing: Examining the Strategic Contingencies,” Journal of Marketing, 82 (September).​ 

Go to the Journal of Marketing​​​​