Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items
  • Less than two weeks ago, Mary Meeker released her 2018 internet trends report, the “most highly anticipated slide deck in Silicon Valley” (Recode)
  • Ecommerce revenue continues to surge, up 16% YoY in the U.S., but the real money is made in places like social media and online subscriptions
  • Mobile is the breakout star of ecommerce; shopping has become the fastest-growing activity consumers do on their smartphones 

When you talk ecommerce and quantifying ecommerce trends, you’d better prepare for sweeping charts that do all they can to illustrate the rapid rise of this space.

The 2018 Mary Meeker Report did precisely that.

Ecommerce's rise shows no signs of slowing, says the 2018 Mary Meeker Report

Total ecommerce sales approach $500 billion per year in the U.S., up 16% year-over-year (left), ecommerce as a percentage of total retail sales up 13% year-over-year (right)

Ecommerce, for the best minds and finest tacticians of global retail, is the business to be in. But it’s what’s in these numbers – the trends, insights, and what to do with them all – that counts.

Just in case you didn’t have time to work through all 294 slides of the full presentation, which can be accessed online, here are …

Three trends, ten slides, and 15 actionable takeaways from the Mary Meeker Report’s data on ecommerce.
  1. Mobile Shopping Explodes
  2. Social Directly & Indirectly Drives Sales
  3. Ecommerce Subscriptions Keep on Giving

1. Mobile Shopping Explodes

Last year was the first in history where global smartphone unit shipments did not grow. Saturation is near.

The most significant development here is that the average selling price of smartphones continues to decrease. So, while thousand-dollar iPhones aren’t the norm, the world is becoming more and more defined by the smartphone, the tool through which users in lesser-developed nations are now using to spend as much time on the mobile web as the rest of the planet.

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

It should be music to an ecommerce retailer’s ears. New tech, like simpler mobile payment systems, is making mobile commerce the smartphone activity.

Of all the things we do on our phones, the fastest-growing segment in 2017 was shopping, up 54% year-over-year.

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Also of note is the evolving process of product finding and product ordering. Amazon now dominates as the first step in consumer search:

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

However, that doesn’t mean — just because someone starts on one channel (e.g., a marketplace or search engine) — that they by default order it from that channel:

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Given that the majority of all searches — whether on Google, Amazon, or other — now take place on mobile, the multi-channel nature of ecommerce makes mobile optimizing all the more vital.

In fact, businesses can do real scale with mobile as their backbone, whether they sell direct-to-consumer or wholesale.

Merchology, which sells custom corporate branded apparel and goods, pored over its customer data to tailor its mobile storefront to supercharge conversion rates and kick sales to another level.

A year after its mobile-leaning redesign, Merchology reported a:

  • 40% jump in mobile conversion rate
  • 340% year-over-year boost in revenue per mobile device

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Action Items for Mobile Ecommerce

  1. Prioritize mobile load speed over desktop
  2. Optimize mobile and desktop conversions separately
  3. Minimize steps (e.g., clicks and screens) to purchase
  4. Implement mobile-first payment gateways
  5. Create mobile product pages with limited content

Social Directly & Indirectly Drives Sales

As social media networks continue to become chief among the ways people interact, so too, does their ability to drivers commerce – ecommerce, sure, but also retail, online-to-offline, and multi-channel marketing that leverages mobile for a host of social touchpoints across the buying process.

It’s all personal now. Tailored product recommendations, targeted ads, all right there in your Facebook or Instagram feed. That’s what you get as dollars pour into the platforms; Facebook’s ad revenue, according to Meeker’s report, was up to $80 million in 2017, a 23% jump year-over-year.

There’s little denying the windfalls. Facebook still towers over its competition when it comes to driving sales … but all social networks are making an impact.

By one poll of American shoppers, 55% said they had purchased a product online after discovering it through one social media outlet or another.

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Click-through rates are rising:

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

So are site visits as referred through social media:

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Social media is no longer a vanity for your business, a way merely to keep score by hollow follower counts or empty engagements.

Pura Vida Bracelets uses social media as perhaps the most vital arm of its multi-channel strategy. Through its micro-influencer referral program — which mixes social, onsite, and email — Pura Vida has learned how to:

  • Increase sales from referral reps by 300% year-over-year
  • Lift average order value 11% compared to non-referral orders
  • Lower customer acquisition costs by a factor of seven

Action Items for Social Ecommerce

  1. Create exclusive deals and contest for separate channels
  2. Experiment with social selling (e.g., Instagram product tagging)
  3. Leverage Instagram for brand awareness and product discovery
  4. Focus on direct-response advertising and retargeting via Facebook
  5. Track multi-touch attribution with Google Analytics or Facebook Journeys

3. Ecommerce Subscriptions Keep on Giving

In 2008, zero of Spotify’s users were paid-subscribers. By 2017, 45% of people who stream music through the service now pay for their tunes.

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

And Spotify is far from alone:

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

What does that have to do with ecommerce?

Subscription ecommerce is the golden goose of online sales: a gift that keeps on giving.

Acquiring customers is not only hard work. It’s expensive. So once you have your shoppers in-house, keeping steady revenue through a subscription offering is a needle-mover for many companies.

Take TULA, for example. The seller of probiotic skincare products offered no subscription services as recently as May 2017. And then it found ReCharge, a Shopify Plus Technology Partner that drives repeat sales. It was a natural fit for TULA’s customers, many of whom rely on its products for their everyday skincare routine.

Mary Meeker Report Ecommerce (2018): Three Trends & 15 Action Items

Less than a year after it began its subscription service, nearly 20% of TULA’s ecommerce revenue began to arrive via auto-renewed transactions.

For more on leveraging subscriptions in ecommerce, take a look at two of our recent articles here at Shopify Plus:

Action Items for Subscription Ecommerce

  1. Experiment with “freemium-to-paid” using low-cost products
  2. Incentivize online actions — like reviews and sharing — with rewards
  3. Upsell to subscriptions post-purchase through email and messaging apps
  4. Personalize subscription offers by AOV, recency, and cart value
  5. Delight customers with exclusively curated box subscriptions

Where the Mary Meeker Report and Ecommerce Collide

Where ecommerce is heading is clear: (1) heavy on mobile’s ever-evolving capabilities, (2) serious on social media’s new life as an ecommerce driver, and (3) diligent on subscriptions, which turn today’s customer into tomorrow’s as well.

The full 2018 Mary Meeker report can be found here.

About the Author

Jason Buckland is a content marketing manager at Shopify Plus. His feature writing has appeared in the New York Times, Sports Illustrated, ESPN, Playboy, Time, the Toronto Star, and elsewhere.