A shiny new iPad Air 2 was announced today: The thinnest ever, with improved cameras and display, and integrated Touch ID and Apple Pay. The iPad tablet product category is not without its troubles though: With slowing sales and shrinking market share, the iPad’s relevance has been recently called into question. But there’s one area where the iPad still the undisputed king, and this area means a lot to both retailers and to the economy as a whole: Online shopping.
Why Tablets hold the key to e-commerce success
The confluence of these three macro trends show that tablet shopping is more important than ever:
1) Shopping is moving online. US Retail is a big market to take over, estimated at $4.5 trillion in 2013 according to the US Department of Commerce. E-commerce is slowly but surely making a dent, growing its share from 4.4% in 2010 to 6% in the first half of 2014.
Custora has been closely tracking US e-commerce for over a year through our free online dashboard, The Custora E-Commerce Pulse. US Retail has been experiencing slow, single digit growth in the past four years - growing 4.2% in 2013 and 3.5% in the first half of 2014. Compare that to e-commerce, with growth rates in mid- to high-teens in the past four years: 16.5% in 2013, 15.5% in the first half of 2014. Considering these growth trends, it is easy to see that e-commerce is poised to continue taking share from brick & mortar retail.
2) The rise of mobile e-commerce. Mobile e-commerce (online shopping done on mobile phones and tablet devices) has been exploding in the past four years. US mobile e-commerce is now a $40 billion market, up from $2 billion in 2010. More than a third of visits to online stores now come from mobile devices, up from just 3% in 2010.
3) Consumers browse on phones, but buy on tablets. Almost a quarter (23.1%) of all online orders were made on mobile devices - tablets and phones - as of March 2014. These were not evenly split: 13.8% were tablet orders, and only 9.3% were phone orders. There are many reasons why conversion rates on mobile phones are lower, but one thing is clear: For retailers, tablet users mean business.
Now that we established the importance of tablet users to e-commerce and retail in general, let’s look at how the iPad fares within the e-commerce tablet world. Hint: Pretty well.
4 out of 5 tablet orders are made on an iPad
For e-commerce orders made on tablets, iPad accounts for the biggest share by far, with 81.6% as of September 2014. Share of orders made on Samsung tablets increased substantially in the past year and a half: from 1.9% in January 2012 to 8.1% as of September 2014. Amazon has also quickly become a player, as purchases made on Kindle Fire tablets account for 3.1% of all tablet orders.
Despite the growth of non-Apple tablet shopping in the past two years, in 2014 the iPad has been regaining share: Growing from 79.9% in March to 81.6% in September.
iPad shoppers spend more
Not only do iPad shoppers buy more often, they also buy more: In the past two years (2013 - Q3’2014), iPad shoppers spent more per each transaction. Average Order Value (AOV) on iPad devices was 11% higher than AOV on Android devices. The gap has been widening with Android tablet AOV decreasing in the past two years, and iPad AOV increasing.
With the recently announced Apple Pay (rolling out next week) and its implications for online retailers, and the just-announced iPad TouchID integration, the iPad is well positioned to continue holding the premier spot for mobile online shopping. We’ll continue to track mobile e-commerce and the tablet battle for supremacy on The Custora E-Commerce Pulse. Sign up to receive updates when we publish new stats and research reports.
This post is an update to the Custora E-Commerce Pulse Mobile Report, released in July. The full 12-page report includes an analysis of mobile commerce growth in the past 4 years, the marketing channels driving mobile transactions, cross-device shopping behavior, and more.
Download the full report here: