Mobile Is Dead — Long Live Mobile! Investing in Mobile pt. 1

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Agnieszka Twardosz
Mobile Is Dead — Long Live Mobile! Investing in Mobile pt. 1

Mobile is everywhere, but at the same time, it's not really "a thing" anymore. Which is exactly why you'd be wise to invest in it. Does it sound like we've lost our minds? It might, but keep reading, and it will all start to make sense.

Welcome to our new series on investing in mobile, where we cover some of the most important perspectives on the state of mobile, as well as numerous exciting technologies that can bring value to your customers and make your application stand out from the crowd.

To begin with, let us give you some context. After all, we owe you an explanation: how can mobile be dead and, at the same time, better than ever?

Mobile is Dead — Long Live Mobile!

For most adults, the way they first connected to the Internet was through the desktop computer. That causes many decision-makers to have a subconscious bias against mobile. However, while the computer remained the primary method of accessing the world wide web for decades, its dominance has been decreasing since 2009. Now, in 2021, mobile is more than a mere subset of the Internet. It is the Internet: the first technology that should come to mind when you think about most online activities.

The great chase

Smartphones were a game-changer. Their large screens and touch-based interfaces transformed mobile web browsing from a UX nightmare into a convenient alternative to laptops. After they entered the market, mobile put up an impressive chase – and it didn't even need a decade to catch up with computers and overtake them.

The number of smartphones sold worldwide underwent the most dynamic phase of growth between 2009 and 2016. The same happened to the market share of mobile versus desktop. In 2009, mobile was at 1.28% – nothing more than an afterthought for any website owner. However, as difficult as it may be to believe, it only took seven years for mobile to go from a plaything for tech enthusiasts to a medium that companies cannot afford to ignore. The market shares of mobile and desktop converged in the second half of 2016.

These days, mobile as a means of accessing the Internet hovers around 55% worldwide, with the figure reaching 66% in the dynamic markets of Asia and Africa. (The numbers do not include tablet usage). Although mostly composed of countries less developed than Western Europe and the US, those continents seem to have leapfrogged the era of desktop computers and are now leading the way in mobile adoption.

Our faithful companions

According to Ben Evans' calculations, nearly 95% of all people on Earth aged above 15 have a mobile phone, with 80% of them owning a smartphone. At least that was the case in May of 2019 – and we all know that the year after it was unique. According to App Annie's State of Mobile 2021 report, mobile adoption advanced by 2-3 years in 2020.

The mobile connection is now a universal experience for humans worldwide, and our smartphones spend as much time in our hands as in our pockets. In the UK, smartphones have been the most important device for accessing the Internet since 2015 for all groups except +55 years of age, with the trend continuously progressing. The current level of adoption is making it increasingly possible to scale all sorts of mobile solutions.

Even though most people stayed home much more than usual, 2020 saw the daily time spent on mobile per user increase to 4h 20 min from 3h 40 min in 2019 – an impressive 18% of year-on-year growth. Computers are not the only popular device that smartphones have overtaken, though. In 2020, Americans spent 8% more time on mobile than watching live TV each day. And what exactly do consumers do with their smartphones? 88% of their screen time, they’re in an app – nearly seven times as much as in the mobile browser.

The ongoing shift to smartphones as the primary means of entertainment has also been reflected in marketing investments, as mobile ad spent overtook desktop in 2019 and has since grown 26% year-on-year, hitting $240 billion in 2020. Will the trend continue, though, as Apple pushes back against data tracking, which is the main reason behind mobile advertising being such an attractive marketing opportunity?

It's a mobile buyer's market

With nearly everyone owning a smartphone and using it at an ever-increasing frequency, it comes as no surprise that people also find themselves pouring more and more money into their mobile devices. In 2020, Android users spent 30% more time in shopping apps than in 2019. If we exclude China, that figure rises to a 45% year-on-year growth. In the US, mobile consumers generated $74.6 billion of revenue in November and December of 2020 combined, with smartphone purchases forming a 39% share of the total revenue.

In the US, 71% of traffic on retail websites and 56% of orders come from mobile devices. The average value of a shopping cart is lower on smartphones than on computers. Still, the figure reaches an impressive $90.82 for phones and $96.75 for tablets. The global average install-to-purchase rate for shopping apps stands at 32.8%.

There are some metrics in which smartphones are yet to beat the competition. For instance, in the US, the shopper conversion rate is 2.01% for mobile phones but 2.1% for desktops and 3.32% for tablets. There are some tactics that serve to improve mobile conversion rates, such as allowing guest purchases or introducing digital wallets, but that does not change the overall tendency. As the importance of m-commerce is growing with each passing year, though, the returns on investment in mobile are very likely to keep increasing.

In the US, m-commerce more than doubled between 2015 and 2019, forming a quarter of all e-commerce. According to Insider Intelligence, by 2024, m-commerce should hit $488 billion and comprise 45% of the US's whole e-commerce market.

Attention and trust – the keys to your customers’ smartphones

We've already established that mobile is the main way people access the Internet and that m-commerce is gaining momentum. It's not all sunshine and roses, though. Every day, consumers spend hours staring at their phones and placing m-commerce orders, but who is to say they will interact with your brand and purchase your products?

Just releasing an app without a wider-reaching strategy may not be enough in a world where 50% of consumers will only consider downloading what they see as "well-known" mobile software. People predominantly use a select few favorite applications. In 2020, time spent in such apps underwent a significant increase in all age groups, which means that a considerable part of last year's general smartphone usage growth can be attributed to the big players.

All in all, it seems that if you want a slice of the mobile pie that keeps growing every year, you will need to make a significant investment. Not only in the software itself but also in getting to know your potential users and transforming your brand into a new, digitally enabled version that will entice consumers to press that "Download" button and dive deeper into the world of your products and services.

Taking the plunge the right way

Some decision-makers view the current situation as anxiety-inducing. On the one hand, ignoring mobile sounds more and more like Blockbuster refusing to buy Netflix in 2000. (When was the last time you heard about Blockbuster?) On the other, it's challenging to pull the trigger and pour funds into a new app when you're unsure how to set it apart from the competition and make sure it brings value to your business.

Fortunately, there are quite a few new technologies and social phenomena that you may use to position yourself at the forefront of the industry. Video commerce, super apps, brand-based ecosystems that engage users with more than just products – these are some of the trends that we'll discuss in the incoming articles of the Investing in Mobile series.

Coming up: why a mobile version of your website simply won't cut it. Find out why applications convert at a much higher rate than mobile websites and how you can make the user experience much more pleasant for your customers thanks to unique app features that the mobile browser does not support.

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Agnieszka Twardosz

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