M-commerce will soon be on par with desktop sales, but competition is heating up.

The rise to prominence of mobile commerce has been long predicted, but retailers need to do more than just optimise their desktop websites if they want to capitalise on the growing share of mobile transactions in e-commerce.

That’s the word from performance marketing company Criteo, who released a report into the state of m-commerce last week which revealed that Australian mobile sales increased by 27 per cent year-on-year in Q2 2016.

That brings the total share of mobile transactions to more than 40 per cent of the total e-commerce pie – a reality that Criteo’s ANZ commercial director, Pressy Sankaran, says represents a tipping point.

“We’ve been seeing for years the advent of mobile shopping and steady rise of m-commerce,” Sankaran told Inside Retail Weekly.

“As the technology continues to advance and more retailers become savvier with their tactics … the next few years will see the gap between mobile and desktop close dramatically,” he continued.

However, according to Criteo, there’s a considerable difference between m-commerce leaders and everyone else. Australia’s top mobile retailers attracted more in app sales than web browser sales for the first time in 2016, converting 90 per cent more product viewers than emerging players.

Sankaran says that retailers looking to make the most of mobile transactions will ultimately have to invest in seamless mobile experiences that are best achieved with mobile applications, rather than merely optimizing their desktop websites for mobile.

“Retailers need to create a truly seamless mobile and cross-device experience, and be prepared to engage with users no matter where they are along the path to purchase,” Sankaran explained.

The report found that mobile applications convert three-times more product viewers than mobile optimized websites – outperforming even desktop conversion rates.

Additionally, Criteo claim that mobile applications retain twice as many users as optimized websites, with consumers spending $29 more on applications than on mobile sites and $27 more than on desktop in 2016.

The research reverberates the findings of an earlier 2015 report into Australian m-commerce released by digital marketing company Episerver, who also found that apparel was the category of choice for mobile shoppers searching for speed and convenience.

“Mobile apps are simply better for m-commerce as they can bring more to play in app and often in a richer sense,” Episerver’s executive sales director, APAC, Natalia Gamarra, told Inside Retail Weekly.

“Personalization here is also key, so that once downloaded and so authenticated the mobile app can offer a more one-to-one level of engagement, and introduce other elements such as push notifications, geo and weather data as well as behavioural prediction,” she added.

Mobile games drive engagement

Some retailers have gone beyond just developing commerce applications for mobile. Boost Juice Bars has developed a mobile game to complement their primary boost application that their head of digital, Christian Mc Gilloway says is driving unprecedented levels of brand engagement.

“Using traditional above the line media you get like 30 seconds of engagement, but we were getting 173 minutes per-player associating with the brand over an eight week period,” Mc Gilloway told Inside Retail Weekly.

The game, called Free The Fruit, was designed primarily as a fun time-killer that people actually want to play, rather than just an educational brand development platform.

“We could have gone out and made an app that talked about the benefits of the juices, health and exercise – but we didn’t.

“You aren’t trying to educate the customer, you are just telling the customer ‘hey here’s something fun, play with it and if you play with it a lot then you’ll get rewarded’,” Mc Gilloway explained.

“It is quite scary for companies and brands to play in this space because the ROI from it seems quite hard to establish, but if you do it well and you do it right then as long as it’s true to your brand values it will work.”

Boost, who won an Innovation Excellence Award for the game at the National Retail Association’s 2016 retail awards last week, are currently preparing to roll-out an update for their main commerce app that will allow customers to scan their credit card.

“[M-commerce] should be a growing part of any business, you’d be crazy not to. Just look at the likes of Domino’s, they’re constantly growing in this field. I think you have to,” Mc Gilloway said.

“Companies have to evolve otherwise they’ll die.”

That evolution is coming, according to Sankaran, who says that although m-commerce leaders are currently ahead of the pack, competition is heating up.

“Expect the gap to shrink. Some retailers are only just emerging into the market of mobile shopping applications, but as the market shifts more and more to a mobile centric economy, the market will become more crowded,” he said.

“The ultimate goal for retailers is to create a seamless process in the customer journey. This means using new cross platform technologies to ultimately build a more satisfying experience for customers.

“Brands that can deliver this feature-rich environment and create a unified, consistent and relevant experience for shoppers regardless of device will succeed in driving retention and conversion rates,” Sankaran said.

Augmented shopping

With the pressure on retailers to standout amongst the m-commerce crowd, Sankaran says emerging technologies like augmented reality are becoming increasingly attractive to retailers looking to stand out.

Consumers are also already using their mobiles while they shop, according to Episerver’s report, which found that 50 per cent of Australian consumers list “on high street” as one of their top three locations for using their mobile devices.

With so many shoppers already using their smartphones while they shop and Wi-Fi access becoming prevalent in shopping centres across Australia, Gamarra says there is an opportunity for retailers to optimize their m-commerce presence in a way that complements their in-store offering.

“AR is on the rise as is the use of advanced machine-learning algorithms to predict next best experiences.

“A consumer in store can be offered a particular promotion or discount via the app based on their buying history and pattern, or be served a loyalty voucher or points in app immediately following a purchase using omnichannel analysis of the POS activity,” Gamarra explained.

“Augmented reality and user generated content from other federated apps like Instagram can also be used to bring shopping experiences to life in app such as virtual outfits and how something might look within your living room.”

But Mc Gilloway cautions against using augmented reality merely for the sake of appearing relevant, pointing out that it needs to be a fit for a retailer’s individual brand.

“A lot of companies have to be careful. They want to jump on AR because they’ve seen Pokémon GO … but you can’t just jump on things because they’re the cool thing in the moment,” Mc Gilloway said.

“They should do it if it works well. If you can scan a boost cup and it gives you product information then that’s great, but if you are just doing it for the sake of looking cool then your customers will see that.

“They can smell it a mile off, and it will seem like you are just trying to be cool.”