This week has been filled with both good and bad news for mobile marketers.
On the upside, two recent monthly studies showed good that mobile shoppers are buying more from their devices.
The downside, a new staff report issued by the Federal Trade Commission (FTC) finds that many mobile apps for use in shopping “do not provide consumers with important information – such as how the apps manage payment-related disputes or handle consumer data – prior to download.”
Let’s tackle the good news first.
Shoppers continue to make in-store visits, but that number is that number is down. Retail store traffic in July dropped 6 percent from the same month last year, but the number of shoppers who entered a store as a percentage of those passing by increased to 8 percent, according to the Euclid retail benchmark,
For mobile shoppers, activity was up across the board for July (compared to the same period last year) based on the new Mobile Commerce Index by Branding Brand.
- Revenue up 98 percent
- Orders up 73 percent
- Page Views up 33 percent
- Visits up 25 percent
The Branding Brand data is based on 121 million smartphone visits globally to major retailer sites, 1.3 billion page views, 2,700 orders and revenue of $319 million. The categories included apparel, health and beauty and home goods at websites optimized for smartphones.
Branding Brand found that non-mobile revenue still dominates sales, though smartphone revenue share increased to 11 percent at $18 million. Revenue from iOS devices continues to lead, accounting for 66 percent of revenue compared to 35 percent from Android devices.
Now, the not so great news.
An FTC report titled, “What’s the Deal? An FTC Study on Mobile Shopping Apps,” explored some of the most popular apps used by consumers to comparison shop, collect and redeem deals and discounts, and pay in-store with their mobile devices.
In the new report, FTC staff surveyed a total of 121 different shopping apps across the Google Play and Apple App Stores. The survey included 47 price comparison apps, which let consumers compare prices on a particular item in real-time; 50 “deal” apps, which provide consumers with coupons or discounts; and 45 in-store purchase apps, which enable consumers to use their phones to pay for goods they purchase in physical stores. Several apps were found in more than one category.
“As mobile apps become more central to the shopping experience, it’s important that consumers have meaningful information about how those apps work before they download them,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a news release. “Consumers should not be left in the dark about their potential liability for erroneous or unauthorized charges or about the way shopping apps handle their data.”
The report also notes three major areas of potential concern for consumers.
- Companies are encouraged to develop clear policies on how consumers can resolve disputes arising from a fraudulent mobile payment or an unauthorized charge.
- FTC recommends industry-wide adoption of strong measures to ensure security throughout the mobile payment process. The report addresses ways sensitive financial information can be kept secure during the mobile payment process, such as through end-to-end encryption. The possibilities for encryption listed in the report cover everything from the authentication of data during the transaction to the secure storage of information on a mobile device.
- The report highlights the need for companies in the mobile payment sphere to practice “privacy by design,” incorporating strong privacy practices, consumer choice, and transparency into their products from the outset. Doing so, the report notes, increases the likelihood of consumer trust in the mobile payment process.
The report also notes the privacy issues arising from the consolidation of consumers’ personal information in the mobile payment process.The full FTC report can be found here.
Mobile growth will continue, but the FTC report highlights that consumers have concerns and in order to keep pace with its rapid adoption mobile marketers must address pressing privacy and transaction concerns.