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Wednesday, 17 October, 2018, 12 : 16 PM [IST]

Reducing consumers drop-off from purchase journey to create USD 3.1 bn sales opportunity by 2022

Mobile-enabled purchase journeys are shorter than offline by 22% for credit cards, as per the findings of ‘Eliminating Friction in Smartphone Path to Purchase’ study. TravelBiz Monitor presents insights of this report.
The report ‘Eliminating Friction in Smartphone Path to Purchase’, is the 5th report in the series under the ZFF programme, released by Facebook in collaboration with Nielsen India and KPMG. The report highlights that friction accounts for approximately two-thirds of consumer dropouts while buying smartphones and media friction contributes to approximately one thirds of the dropouts. The study also noted that mobile influence will continue to dominate the smartphone purchase journeys as 7 in 10 smartphone purchases will be mobile influenced by 2022. Mobile heavy journeys today are shorter, thereby making it a cost effective option for marketers. Additionally, friction faced by consumers can be reduced with the higher use of mobile in the media mix and this can create USD 3.1 bn worth of potential revenue for smartphone brands by 2022.

India is currently the second largest smartphone market, globally, and is expected to reach 1.4 billion unique mobile subscribers by 2022. The Indian smartphone industry is witnessing a competitive surge and hence it has become imperative for brands to understand why consumers dropout at any stage of the purchase journey and tap them at the right moment, in the right way.

The study further revealed that nearly half of the consumers use mobile in their smartphone purchase journey. Currently, mobile influences 58% of smartphone purchase decisions, amounting to USD 8.5bn worth of sales and it are expected to grow 1.8X to reach 73% and influence USD 15.6 bn worth of sales by 2022. Facebook’s influence in the journey is at two -thirds of the mobile influence. Currently, Facebook influences 33% of purchase decisions amounting to USD 4.8B worth of sales and it is expected to grow 2X to reach 44% and influence USD 9.5B worth of sales by 2022.

There is an opportunity to generate USD3.1 billion by replacing less efficient offline media touch points with mobile-based advertisement approaches. This can create value for smartphone marketers by reducing their average cost of acquiring consumers (CPA) by up to 13 %. CPA of a mobile-based digital medium is today only a fraction of traditional media. Therefore, mobile-based advertising approaches offer better experience to consumers and higher economic value to marketers.

As per the report, mobile-enabled purchase journeys are shorter than offline purchases by 22% for credit cards, 17% for insurance and 8% for loan categories. It is seen in the research that in journeys which are mobile-heavy are shorter by 14% as compared to traditional offline journeys. Mobile reduces the probability of consumers from bouncing off the journey by enabling faster and seamless conversion.

As per the findings of the report, media related friction accounts for 34% of consumer dropouts in the smartphone market. Additionally, top friction areas for different demographic cohorts vary and hence marketers need to customize their marketing strategy accordingly.

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