As the debate between the conversion potential of mobile Web sites versus applications continues, a new report by Criteo revealed that retailers with sophisticated app presences saw up to 54 percent of their transactions generated in-app, up seven percent from last year.

Criteo’s H1 2016 State of Mobile Commerce Report confirmed the link between high spending and sophisticated retail apps, suggesting that brands seeking to fuel mobile sales should allocate more of their budgets to app development. The report also found that apps convert three times as many customers as mobile Web, highlighting their potency in the omnichannel marketplace.

“The biggest takeaways for retailers are that smartphones are now the dominant mobile device everywhere in the world, and mobile apps are grabbing an ever-growing share of online purchases,” said Gilles Giudicelli, head of research at Criteo. “Consumers are browsing and buying on smartphones and apps more than ever — leaving desktop shopping in the dust — and retailers need to focus their efforts there to continue to drive conversions.

“This trend is likely to redefine the fault lines of the ecommerce landscape in favor of retailers that have the capacity to invest significant resources in providing their customers with a great purchasing experience on a smartphone.”

Mobile overtakes desktop
Mobile devices continue to grab larger shares of the ecommerce market, at the expense of desktop purchasing. To succeed in a truly omnichannel economy, retailers must ensure that their apps and mobile sites are up-to-date and easily navigable with no checkout-related issues.

Per Criteo, in the first half of 2016, top U.S. retailers saw their mobile sales grow 30 percent year-over-year, culminating in 52 percent of all ecommerce transactions.

Additionally, for all U.S. marketers, mobile’s share of ecommerce transactions jumped by 17 percent year-over-year.

Fashion and luxury retailers saw the biggest increase of ecommerce transactions stemming from smartphones – up 17 percent from last year, to 40 percent this year.

Sporting goods and mass-market categories also experienced significant upticks in mobile sales, with increases of 23 percent and 19 percent, respectively.

One major factor in this growing shift is consumers’ rapidly rising mobile app adoption and usage. According to Criteo’s report, apps offer two times the retention power for new users than mobile Web.

Retailers with sophisticated apps saw up to 54 percent of all mobile transactions occur in-app. Sophisticated capabilities include instant loading, offline content, home screen presence, personalization and push notifications.

The average order value of an in-app purchase now surpasses that of a desktop and mobile Web purchase, lending more credence to the notion that all major retailers should invest heavily into their apps.

Pointing to the correlation between conducting research on a mobile device and receiving product inspiration from a brand, a recent study from Google found that 92 percent of consumers who did research on their smartphones also made a purchase within the same day (see story).

Additionally, mobile apps convert three times more product viewers than their mobile Web counterparts.

However, this does not mean that retailers should give up on their mobile Web sites entirely.

“Although apps have a proven track record of converting consumers — and grabbing an ever-increasing share of online purchases as a result — the mobile Web remains extremely important for all retailers, large and small,” Mr. Giudicelli said. “In Criteo’s latest Fashion Flash Report, we point out that almost half of smartphone buyers are exclusive to mobile Web: deprioritizing your purchasing experience on the mobile Web would mean possibly alienating half of your potential customers.

“Also, apps are not for everyone,” he said. “Since there is limited space on a smartphone’s home screen, there is a tendency to save that valuable real estate for those apps that are used most frequently.

“Finally, apps (and mobile commerce in general) are a winner-takes-all game. Leaders reap a disproportionate share of the benefits of having an app. If you’re a challenger in your market, there’s an increased chance that your mobile Web site will be one of your key assets to grab market share from your competitors.”

Ringing in holiday sales
As the 2016 holiday season swiftly approaches, retailers must ensure their mobile maturity remains high in order to maximize smartphone-led sales. This means optimizing mobile sites and apps as well as implementing product recommendations into all offerings should be at the top of brands’ to-do lists.

Retailers looking for an upper hand on mobile this holiday season may also want to boost their efforts to drive installs in September, when acquisition costs are at their lowest while install-to-purchase rates are still high, according to a report from Liftoff (see story).

“This holiday season, more purchases than ever will be done via mobile,” Mr. Giudicelli said. “In particular, we expect 2016 Black Friday to beat records in terms of mobile sales.

“For retailers, this means great opportunities, but it also means great challenges, because retailers have to deliver on their promises – and errors can be costly,” he said. “If your mobile Web site or app loads too slowly, makes purchasing too complicated, or fails to help users find what they’re looking for, you may lose these valuable prospects forever.

“This holiday season, focus on building mature mobile sites and apps that consumers can easily navigate to browse and purchase products — making the path to purchase as smooth and seamless as possible.”