If you want to understand how the iPad is changing the ways people shop, take a look at fast-growing online retailer Fab.com. Their CEO Jason Goldberg reported that they expect each new iPad user to bring in twice the revenue of non-iPad users. Moreover, Goldberg said that a sale results 6.5% of the time after a user opens the Fab iPad app, an impressive rate.
Fab is not an outlier, as many other retailers are seeing big growth in sales on the iPad. Comcore just announced an ‘inflection point’ for mobile commerce with one third of visitors to the top 50 retailer websites coming exclusively from mobile, while tablets index 50% higher than smartphones for browsing apparel and home furnishings categories. Last holiday season, IBM reported that the iPad made up nearly 10% of online purchases of retail products. Meanwhile Adobe has reported that shoppers are three times more likely to make a purchase when shopping with a tablet.
After the iPad’s launch three years ago, some of the first retail companies to take advantage of this new shopping platform were flash sale sites like Rue La La and Haute Look. These companies realized early on the importance of mobile devices, due to the nature of their business: time-sensitive emailed deals that motivated shoppers to buy immediately using the device in hand. These companies soon learned that Apple’s iOS made up to 90% of their mobile installed base, so as iPad ownership grew, these mobile-savvy companies quickly responded by building iPad-optimized websites and apps.
Why do Apple iOS owners buy more than Android and other phone owners? First of all, there are demographic reasons. Apple devices are more expensive and their owners generally have greater amounts of disposable income. Another factor is that Apple owners are often interested in product design, which lends itself toward purchases of high-ticket items in apparel and home furnishings. Furthermore, the more intuitive user interface of Apple devices can make it easier for non-technical people to navigate through the shopping and purchase process.
Let’s examine why the iPad produces so many more sales than the iPhone. One obvious reason is that the large and densely pixeled screen allows for a deeper examination of products such as enhancing product photos. Second, location matters, since most iPad purchases happen at home: there is something comfortable about the experience of swiping a screen while leaning back on a sofa or chair. In fact, the touch screen’s tactile feel may be the closest thing that technology can offer to touching actual products in a store. While the precise causes for the iPad’s shopping success are still being deciphered, the numbers make it clear that neither the PC nor the phone can compete.
In terms of what retailers are doing today, iPad innovation has just gotten started. Many of the current iPad apps have a conventional e-commerce web-style design focused on search and category browsing. For the largest retailers with catalogs of hundreds of thousands of items (think Amazon or eBay) this may make sense, but more specialized retailers are discovering creative ways to engage their customers while shopping [delete “while shopping” since obvious]. Some apps use 3D imagery that allow the user to rotate the product and view from any angle. Others are integrating video clips of the product being worn or used by models. There are iPad apps that allow users to photograph themselves and see an overlay of the product on top of their own image. The camera can also help users with color and pattern matching: a user can photograph an item in their home and view matching items that are for sale.
A side benefit for retailers who offer shopping on iPad is the ability to learn detailed information about how consumers shop. When users touches the screen to zoom in on a photo, they are leaving a record of precisely what aspect of the product they found most interesting (a handbag versus a shirt, for example). This data can be used to provide immediate personalization of the shopping experience and can also be rolled up into historical ‘big data’ sets for backend business optimization of everything from pricing to inventory management to product selection.
What’s the takeaway for the retail industry if iPad users are converting into shoppers at three times the rate of other users? By optimizing their iPad strategy, the largest retailers may soon see a jump in hundreds of millions of dollars in revenue.