The Mobile Economy Is Thriving - Are You?
We are now well into 2017 and we thought we would take stock of the state of the Mobile Economy, which we define as the sum of all socioeconomic impacts mobile communications and services have on consumers, businesses and nations. Our research shows that the Mobile Economy is thriving and will continue to grow.
Our advice for enterprises? Success in Mobile requires a deep focus on offering convenient and valuable user experiences. Too many mobile websites and apps fail to engage and retain their target users.
What is the impact of the Mobile Economy in its broadest sense?
Contribution to World GDP
According to a 2017 report by the GSMA, the Mobile contribution to GDP was $3.3 trillion in 2016 and was expected to grow to $4.2 trillion in 2020, equivalent to a c.7% average annual growth rate.
Contribution to the UN’s Sustainable Development Goals (SDGs)
Mobile technology plays a critical role in fulfilling the ambitions of universal internet access. According to the same 2017 report by the GSMA, the number of individuals accessing the internet over mobile devices has doubled over the past five years to 3.6 billion, and will rise to 4.7 billion (60% of the global population) by 2020.
Mobile tools and applications can address a wide range of socioeconomic challenges contributing to increased productivity and poverty eradication. Here are examples of mobile-enabled services that, collectively, have a tremendous socioeconomic impact in the developing world:
access to good education
emergency communications systems, in case of natural or man-made disasters
digital agricultural marketplaces improving price outcomes for farmers
What is the impact of the Mobile Economy on businesses?
As remote working and “bring your own device” policies become mainstream, the need for digital solutions that enable a mobile workforce is clearly growing. Research and Markets estimated that the demand for enterprise mobile apps is already valued at $48bn in 2016 and could double by 2021. Among the largest industry sectors are Banking, Financial Services, and Insurance.
Mobile is about to surpass desktop as consumers’ favourite e-commerce platform according to research from marketing technology company Criteo in its 2016 State of Mobile Commerce Report. This is particularly true in Japan and in the UK, where retailers now sell more on mobile devices than on desktop.
Mobile apps were also found to be the most efficient channel for retailers:
driving a larger percentage of shoppers down the purchase funnel and converting at 3x the rate of mobile web and 1.5x the rate of desktop
driving an average order value 27% higher than desktop
App Annie estimated that app store revenues*, the sale of digital goods and services occurring through Google Play and the iOS App Store, grew by 40% in 2016. Games continue to dominate app store revenues representing 75% and 90% of all digital goods and services sold on the iOS App Store and Google Play, respectively.
* Excludes the sale of physical goods such as any product bought on the Amazon Shopping app and the sale of physical services e.g. an Uber ride paid through the Uber app. Includes app download fees (e.g. paying £2.39 to download a Guitar Learning app) and/or any in-app purchase of digital goods and services (e.g. buying a new Netflix subscription on the Netflix app).
The biggest mobile game launch of 2016 belonged to Nintendo, with Pokemon GO generating over $950 million in consumer spend across iOS and Android by the end of 2016 according to App Annie. Pokemon GO was the first real global success for a game leveraging Augmented Reality.
Many more mobile gaming hits can be expected in the near future as Augmented Reality and Virtual Reality technologies improve and become more affordable, with the likes of Facebook and Apple making huge R&D investments.
Mobile now represents 65% of digital media time (comScore). Accordingly, advertisers are spending an ever larger share of their budget on mobile platforms, at the expense of TV, printed newspapers and other traditional media. Total spending on mobile advertising in Britain surpassed the desktop in the first half of 2016 according to the PwC and IAB UK digital ad spend study, with mobile ad spend at £802m and desktop spend at £762m.
Have you reached your full Mobile potential?
Many enterprises are still sitting on the fence and not investing as much as they should in Mobile. For instance, just 23% of Top 500 retailers in the UK had a transactional app in 2016 according to a survey by internetretailing.net
Even when businesses do invest in Mobile, success is far from guaranteed. It’s not just about making a website mobile responsive or launching yet another mobile app. Enterprises really need to understand the target audience for their mobile products and deliver convenient and valuable user experience:
Mobile users have high expectations and low tolerance to poor user experience: 61% of users are unlikely to return to a mobile site they had trouble accessing and 40% will visit a competitor’s site instead according to Google
It is difficult to keep mobile users engaged: according to Localytics 20% of apps are never used more than once and only 39% of apps are used over 10 times
Chelsea Apps has been helping businesses reach their mobile potential since 2010. We are excited to be working in such a fast-moving industry and enjoy the many challenges and opportunities that this brings. Please get in touch if you would like to know more about how we can work with you as a one-stop digital partner; from Think, Shape and Build services to Support, and Optimisation.