Mobile spending is growing — and fast. In the U.S. alone, over $203 billion in sales will happen on smartphones, according to eMarketer. That number is expected to double by 2022.
“This is the fastest growing category of consumer spending the world has ever seen — and we’re building our businesses on top of this,” said Button’s co-founder and CEO Michael Jaconi at Button’s TAP Summit last month. “So if you don’t think there’s an opportunity to reinvent and create anew, then you’re wrong. There’s never been momentum like this.”
But the growth in mobile commerce isn’t just one trend. It’s a series of smaller trends, each of which builds on the last. Here are three of the big changes that Jaconi recommends following most closely.
The DTC explosion continues
There’s been a sharp rise in the number of big, successful direct-to-consumer companies over the past few years. The likes of Casper, Allbirds, and Glossier borrow from a shared playbook: By skipping out on traditional retail channels and leaning heavily on platforms like Instagram and Facebook to acquire customers, these companies have managed to keep costs low while keeping sales high.
On the platform side, one big beneficiary of the growth in the space is Shopify, whose market capitalization overtook that of eBay’s earlier this year. That’s a mobile story as well: Nearly 70% of Shopify merchants’ sales come from mobile devices. Expect that number to continue to grow in the future.
To see the future, look to China
When it comes to mobile, China remains a leading indicator of where the rest of the world will be in a few years.
Unlike in the West, where the digital economy was born in the PC era, China’s digital economy was born on mobile devices. Mobile is a big part of everything — particularly commerce. That’s clear from the numbers: Over 75% of online shopping in China will happen in mobile devices next year, according to Boston Consulting Group. In comparison, if that share of online shopping happened on mobile in the U.S. today, it would represent a $440 billion opportunity.
Shopping comes to social
When Facebook, a company that gets nearly all of its revenue from advertising, starts building an affiliate marketing business, the rest of the industry should take notice. That moment came this March when Facebook rolled out Instagram Checkout, a feature that lets users purchase products without leaving the Instagram app. Facebook pockets a percentage of each transaction, meaning that as brands’ sales grow, so does Facebook’s revenue.
Jaconi argued that, with the move, Facebook is “saying that the world needs to change. And if they’re saying that, then it should be heard loud and clear by everyone in this room.”
What does all of this mean for performance marketing?
These big trends all support Button’s core thesis that the future of mobile will be built on commerce, not advertising. Button is building that future on two fronts: One way is through bringing more sophistication and efficiency to performance marketing, which is the mission behind Audiences, which we announced this month.
Building this commerce-driven future also means relentlessly improving on the user experience. This is a major area of opportunity for the industry, and one where Button is focusing.
“To make actions, or transactions, or commerce strategies work and compete with ads, we have to make the [mobile shopping] experience as seamless as possible. “[We want people to get] from ‘I want’ to ‘I have’ in as few taps as possible,” Jaconi said.
Check out our Audiences announcement post to see how Button is making performance marketing more dynamic and more personal.