The higher a company’s revenue, the more likely it is to value, maintain and protect its mobile business, according to new research led by Kount.
In its Mobile Payments and Fraud Survey: 2018 Report, Kount shared findings gathered from a survey of nearly 600 companies, approximately 24 percent of which sell apparel and accessories. Greater than 84 percent of these fashion merchants offer a mobile app or mobile website, and more than 58 percent of these businesses indicate that smartphones and tablets comprise a very important commerce channel.
Different behaviors and attitudes emerge when comparing high- versus low-revenue businesses. Eighty-seven percent of all companies that generate $250 million or more in annual revenue operate a mobile channel of some sort. The data paints a much different picture for merchants with lower revenue; among those generating revenue under $10 million, two-thirds (66 percent) offer a mobile app or site, and 11 percent have no plans whatsoever to go mobile. By contrast, not a single high-revenue firm said support for mobile commerce wasn’t important.
Clearly, merchants that earn more in revenue consider mobile a significant factor in their overall strategy. Since 2015, the percentage of firms generating more than 50 percent of their total revenue from mobile has jumped from 3 percent to about 20 percent, and in two years one-third expect to draw half of their revenue from mobile apps and sites. When looking exclusively at sellers of fashion merchandise and accessories, 22 percent derive 50 percent or more of their revenue via mobile outlets and 59 percent believe it will drive more than half their revenue in two years’ time.
The app versus mobile website question remains a serious consideration for online commerce companies. Just slightly more than half (52 percent) offer a mobile-optimized website, lagging behind the 60 percent that offer a mobile application. Again, a greater share expressed intentions to develop an app or boost support for an existing one, 45 percent versus the 37 percent with similar plans for a mobile website, the report found. Since it launched this report in 2013, this is the first time in Kount’s research that more merchants offer apps than sites built for mobile.
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Apps are evolving into multifaceted tools, and the data also shows that firms are becoming more thoughtful in multiplying the use cases for their mobile applications. One quarter of the apps on offer can assist consumers with in-store shopping activities, a jump from 13 percent last year. In addition, a growing number of companies support payments originating from a smartphone; 8 percent more now accept NFC and other mobile-specific payments at the brick-and-mortar point of sale than the 29 percent that did in 2017.
Once again, higher-revenue merchants overindexed the pack where support for mobile wallets, like Google Pay, Samsung Pay and Apple Pay, are concerned. Forty percent of those earning more than $100 million annually accept these forms of payments, ahead of the 30 percent of all merchants and the 23 percent of firms in the under-$100 million category.
Though most businesses appreciate that mobile commerce drives substantial value, they struggle to balance a great user experience with robust fraud protections and other bottom-line issues, according to the report. However, more companies cited maintaining mobile’s ease of use as their biggest challenge, ahead of ensuring security, for example. With consumers spending a growing amount of time on the mobile devices and in apps—and a notable intolerance for slow-loading experiences—it’s no wonder merchants are focused on delivering the best possible mobile channel.
As mobile commerce has expanded, so, too, has merchants’ ability to measure and monitor this channel, though there’s opportunity for even greater improvement. Just less than half (46 percent) of businesses can determine when traffic originates from a mobile device, up from 16 percent when Kount first inaugurated the report five years ago. Again, high-revenue firms are more likely than their lower-earning peers to have this capability, 88 percent to 62 percent.
On the other hand, more than 58 percent of all surveyed merchants confessed they didn’t know their mobile abandonment rate, perhaps because their businesses don’t monitor this particular metric. Of those that track this data point, more than 42 percent said their abandonment on mobile is less than 20 percent, and for more than 32 percent, transactions are left unfinished by between 20 percent to 40 percent of consumers.
Online fraud is rising as a whole, and mobile is no exception. Despite this reality and most (more than 57 percent) noting a rise in attempted fraud, the number of merchants that believe smartphones and tablets need their own fraud-fighting tools has steadily declined since the first year Kount conducted this research. Among companies selling apparel and accessories online, 73 percent use CVV (card verification value) and 45 percent rely on address verification checks, two of the more unreliable fraud-prevention tools, Kount said.
Of note, biometrics caught on last year, likely as more biometrics-equipped mobile devices came to market. However, just 1 percent use of surveyed firms are using this anti-fraud tool this year, down from 7.6% in 2017. From 2016 to 2017, SMS/texting plummeted in usage for fraud-related concerns, from 15.5% to 6.7%, but rebounded to 11.8%, perhaps a nod to the popularity of direct personal messaging.
Finally, the research shows that merchants with high order values are more likely to verify a customer’s identity before finalizing the transaction than peers whose baskets are worth less.