Why iPad is Still the King of E-Commerce

A shiny new iPad Air 2 was announced today: The thinnest ever, with improved cameras and display, and integrated Touch ID and Apple Pay. The iPad tablet product category is not without its troubles though: With slowing sales and shrinking market share, the iPad’s relevance has been recently called into question. But there’s one area where the iPad still the undisputed king, and this area means a lot to both retailers and to the economy as a whole: Online shopping.

 

Why Tablets hold the key to e-commerce success

 

The confluence of these three macro trends show that tablet shopping is more important than ever:

 

1) Shopping is moving online. US Retail is a big market to take over, estimated at $4.5 trillion in 2013 according to the US Department of Commerce. E-commerce is slowly but surely making a dent, growing its share from 4.4% in 2010 to 6% in the first half of 2014.

 

Custora has been closely tracking US e-commerce for over a year through our free online dashboard, The Custora E-Commerce Pulse. US Retail has been experiencing slow, single digit growth in the past four years – growing 4.2% in 2013 and 3.5% in the first half of 2014. Compare that to e-commerce, with growth rates in mid- to high-teens in the past four years: 16.5% in 2013, 15.5% in the first half of 2014. Considering these growth trends, it is easy to see that e-commerce is poised to continue taking share from brick & mortar retail.

 

2) The rise of mobile e-commerce. Mobile e-commerce (online shopping done on mobile phones and tablet devices) has been exploding in the past four years. US mobile e-commerce is now a $40 billion market, up from $2 billion in 2010. More than a third of visits to online stores now come from mobile devices, up from just 3% in 2010.

 

3) Consumers browse on phones, but buy on tablets. Almost a quarter (23.1%) of all online orders were made on mobile devices – tablets and phones – as of March 2014. These were not evenly split: 13.8% were tablet orders, and only 9.3% were phone orders. There are many reasons why conversion rates on mobile phones are lower, but one thing is clear: For retailers, tablet users mean business.

 

Now that we established the importance of tablet users to e-commerce and retail in general, let’s look at how the iPad fares within the e-commerce tablet world. Hint: Pretty well.

 

4 out of 5 tablet orders are made on an iPad

tablet e-commerce orders by device

For e-commerce orders made on tablets, iPad accounts for the biggest share by far, with 81.6% as of September 2014. Share of orders made on Samsung tablets increased substantially in the past year and a half: from 1.9% in January 2012 to 8.1% as of September 2014. Amazon has also quickly become a player, as purchases made on Kindle Fire tablets account for 3.1% of all tablet orders.
Despite the growth of non-Apple tablet shopping in the past two years, in 2014 the iPad has been regaining share: Growing from 79.9% in March to 81.6% in September.

 

iPad shoppers spend more

Not only do iPad shoppers buy more often, they also buy more: In the past two years (2013 – Q3’2014), iPad shoppers spent more per each transaction. Average Order Value (AOV) on iPad devices was 11% higher than AOV on Android devices. The gap has been widening with Android tablet AOV decreasing in the past two years, and iPad AOV increasing.

 

What’s next?

With the recently announced Apple Pay (rolling out next week) and its implications for online retailers, and the just-announced iPad TouchID integration, the iPad is well positioned to continue holding the premier spot for mobile online shopping. We’ll continue to track mobile e-commerce and the tablet battle for supremacy on The Custora E-Commerce Pulse. Sign up to receive updates when we publish new stats and research reports.

 

More Mobile

This post is an update to the Custora E-Commerce Pulse Mobile Report, released in July. The full 12-page report includes an analysis of mobile commerce growth in the past 4 years, the marketing channels driving mobile transactions, cross-device shopping behavior, and more.

Download the full report here:

4 Key Trends That will Shape Holiday E-Commerce this Year

While I was pumpkin-picking and cider-drinking this past weekend, my thoughts naturally turned to holiday e-commerce shopping. Fall is the time of year when retail marketers are putting the last ornaments on their holiday marketing plan, while the rest of the world turns to imbibing pumpkin spice latte the greatest trick capitalism ever pulled.

And so in the spirit of fall and holiday e-commerce prep, we took a look at holiday insights gleaned from The Custora E-Commerce Pulse: Custora’s free dashboard for US e-commerce stats, based on data analysis from over 100 retailers, 70 million anonymized shoppers, and $10B in transaction data. This post highlights some of the most interesting holiday shopping trends, and implications for e-commerce marketers.

All e-commerce holiday stats below (unless otherwise specified) are from the The Custora Holiday 2013 Recap Report and The Custora Holiday Snapshot (click the links to download the full reports).

Stay up to date with holiday e-commerce stats: The Custora E-Commerce Pulse, a free dashboard for US e-commerce stats, will track and report on holiday shopping trends during the 2014 holiday season. Sign up to the Pulse to get notified when we release new holiday updates and reports.

 

4 Key Trends for the 2014 Holiday E-Commerce Shopping Season

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What Apple Pay and the iPhone 6 mean for Online Retailers

Among a bevy of announcements, Apple today announced Apple Pay: A new mobile payment service for retailers, both online and store-based. Apple Pay launches with an impressive roster of online retailers, purpose built apps, and “real life” merchants including Target, Whole Foods, McDonalds, Panera Bread, Nike, Starwood, Groupon, and Uber.

The new iPhone 6, available September 17, is going to be the first device embedding Apple Pay, allowing customers to pay with their phones online and in store. Payment will be done through the Touch ID interface – using one’s finger. The new Apple Watch, available early next year, will also feature Apple Pay.

 

 

In this post we dive into some of the background and strategies which may have contributed to Apple’s decision to develop Apple Pay, as well as the implications for online retailers.

 

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Why the (rumored) Apple digital wallet will change Apple’s e-commerce trajectory

Tomorrow Apple is rumored to announce the iPhone 6, along with the long-awaited iWearable thing (our money’s on it not being called a watch). In this post however, we’ll focus on another rumored big announcement: A digital wallet, or a new “mobile payment system”.
According to the rumors, the iPhone 6 is going to be the first device embedding Apple’s new payment system, allowing customers to pay with their phones online and in physical stores like CVS and Walgreens. The rumors also report on a partnership between Apple and major banks and credit card companies, with significantly lower credit card processing fees for Apple compared to rivals like PayPal.

 

Here’s what the new digital wallet means for Apple as an e-commerce player.

 

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The Best Month to Acquire New Customers is Not What You Think

It is unquestionable that the holiday season reigns the peaks of retail activity. In November and December, shoppers research and buy presents for family and friends, while taking advantage of numerous deals and sales, both online and in brick and mortar stores. Most retailers, consequently, assume the biggest spike in new customer acquisition occurs during this time frame, the two months of holidays galore — and they would be correct. But, with this rise in customer acquisition that spikes in the final months of the year, retailers ought to consider the lifetime value of these buyers — meaning the total spend of the customer over his or her entire relationship with the store. Inevitably, these customers tend to lean towards what the industry likes to call “one and done” buyers. In it for the discounted prices and out when deals are gone.
A spike in new customer acquisition that comes with poor retention and modest lifetime value? Time to rethink. Despite the jump in customers storming through your door in November and December, the best month to acquire new customers is, in fact, October.

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