More and more shoppers are interested in Progressive Web Apps for mCommerce. Clients are asking about the return on investment. In this article, I will show you an estimated ROI for PWA.
Global shoppers struggle with a huge discrepancy between time spent on mobile devices and mobile conversion rates. Despite the higher engagement on mobile, users more often buy on the desktop. The so-called “mobile gap” can be as high as 49%. To fill in this gap, retailers should run conversion rate optimization in their eCommerce; this includes improvement of TTI and overall speed of the webpage, providing consistent UX on all touchpoints, and taking full advantage of smartphone features. Many of these can be easily improved with Progressive Web Apps.
ROI positive in 4 months
From all the PWA case studies we’ve seen, the average conversion rate increase for mobile users was 36%. For a retailer making $5m from mobile annually, the revenue from a PWA will bring an additional $1.8m a year. Even with a conservative margin of 25%, this means $450K of additional pure profit after a year.
Building your PWA from scratch can optimistically take you about 12 months of 2 developers’ time, which means 3400 wh. If you pay about $140 per development hour, this is more or less what you earn thanks to the PWA in the first year.
On the other hand, instead of developing a PWA in-house, you can use a pre-built mobile-first commerce platform (eg. Storefont Cloud). The cost of the platform, which is already developed, is $100K annually for a $5m mobile revenue threshold. Even if we add the costs of setup, integrations, etc. (an additional $50K) you end up at $150K for the first year.
So after around 4 months, your investment in PWA is paid for from the margin.
If you are very conservative and use a 20% increase in conversion and a 20% margin, you will get $1m additional revenue and $200K pure profit. ROI positive after 9 months.
You can evaluate your mobile metrics with the Revenue Calculator.
Take the mobile-first approach or lose
“We expect more than 3 billion online eCommerce transactions to happen this year so these are many opportunities we have to really wow the customer and remove any friction.” – Conor McGann, Mobile UX Specialist (GMS). Google
Mobile users are key customers for eCommerce, and selling platforms should be adjusted to meet their expectations with a mobile-first approach in a short time. Businesses ignoring mobile users’ needs will lose severely. If you don’t implement a PWA for 6 months, you will lose between $100 and 225K of pure profit in lost opportunities.
Published November 13, 2018