Mobile industry to create $3.1 bn sales opportunity by 2022: Facebook-KPMG report
Technology is changing how consumers shop/buy. Today, consumers demand utmost speed & simplicity, as they buy and could abandon their purchase journeys at the slightest discomfort. This consumer drop-off from the purchase journey is referred to as 'friction'. Facebook announced the release of its “Zero Friction Future” program with multiple industry research whitepapers put together by KPMG, which will aim to define, understand and solve friction in purchase journeys to unlock new avenues for business growth. The whitepapers are based on primary research and insights survey conducted by Nielsen.
The first report titled 'Eliminating Friction in Smartphone Path to Purchase', highlights that friction accounts for approximately two-thirds of consumer dropouts while buying smartphones and media friction contributes to approximately one thirds of the dropouts. The study also noted that mobile influence will continue to dominate the smartphone purchase journeys as ~7 in 10 smartphone purchases will be mobile influenced by 2022. Mobile heavy journeys today are shorter, thereby making it a cost effective option for marketers. Additionally, friction faced by consumers can be reduced with the higher use of mobile in the media mix and this can create ~USD 3.1 bn worth of potential revenue for smartphone brands by 2022.
India is currently the second largest smartphone market, globally, and is expected to reach 1.4 billion unique mobile subscribers by 2022. The Indian smartphone industry is witnessing a competitive surge and hence it has become imperative for brands to understand why consumers dropout at any stage of the purchase journey and tap them at the right moment, in the right way.
The study further revealed that nearly half of the consumers use mobile in their smartphone purchase journey. Currently, mobile influences 58% of smartphone purchase decisions, amounting to ~USD 8.5bn worth of sales and it is expected to grow ~1.8X to reach 73% and influence ~USD 15.6 bn worth of sales by 2022. Facebook's influence in the journey is at two -thirds of the mobile influence. Currently, Facebook influences 33% of purchase decisions amounting to $4.8B worth of sales and it is expected to grow 2X to reach 44% and influence $9.5B worth of sales by 2022.
Speaking on the launch of the program, Sandeep Bhushan, Director, Facebook India and South Asia, remarked “Consumers journeys are quite complex today. Mobile plays a key role at every step in their customer's purchase cycle while researching for information and buying. But we have seen not all businesses are prepared to meet consumer expectations, which leads to consumers dropping at different stages of the purchase , deemed as friction , which often result in abandonment of purchase journey - implying loss of revenues for them. It is seen in the research that in journeys which are mobile-heavy are shorter by 14% as compared to traditional offline journeys. Mobile reduces the probability of consumers from bouncing off the journey by enabling faster and seamless conversion. With the launch of “ Zero Friction Future” program, we want to help businesses adopt relevant mobile marketing strategies to offer seamless purchase experiences, to help them win consumers and increasing sales.”
As per the findings of the report, media related friction accounts for 34% of consumer dropouts in the smartphone market. Additionally, top friction areas for different demographic cohorts vary and hence marketers need to customize their marketing strategy accordingly.
Some key consumer friction points include:
- Women seek more explicit communication, while men demand more relevant information. Storytelling, FAQs, and sequential advertisements are the quick solutions brands can take on.
- 35+ are more likely to abandon purchase, as sensitivity to friction increases with age. Brands should try and build more trust with older age group by targeting brands/products most suited to their needs, and should assist younger population with technical queries through chat services and assisted sales.
- SEC B faces more friction compared to SEC A and drop out due to lack of offers and information in their path to purchase. Businesses here can reduce friction by proactively communicating bundled deals, price drops and exchange offers, motivating consumers to make a purchase.