2015 Mobile Consumer Survey

1. 2015 Mobile Consumer Survey Presented by The On-Demand Economy

2. 2 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org ABOUT THIS REPORT The On-Demand Economy is a group of executives dedicated to the advancement of the commerce based solutions that make day to day life simpler and more efficient. We serve as an unbiased platform where stakeholders can interact with industry leaders, collaborate with like-minded businesses, address collective issues, and access research. This group and its participants are helping to shape one of the defining trends of this decade - evolving consumer experiences and expectations in a mobile-first world. Powered by the on-demand fanatics at Button and our friends

3. 3 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org 17 QUESTIONS 1,348 PEOPLE10 DAYS ABOUT THIS REPORT Mobile businesses are rapidly changing industries, cities, and the expectations of consumers. In order to better understand these evolving consumer preferences and behaviors, we sampled US mobile smartphone owners across different operating systems, cities, age groups, and genders in May 2015. The distribution of survey participants was carefully constructed in collaboration with Survata to capture as close to a census representative sample as possible of mobile consumers in some of the most technologically forward cities in the US.

4. 4 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org ABOUT THIS REPORT Distribution of Survey Respondents 3% 47% 50% iPhone Andoid Other 22% 21% 36% 21% 18-24 25-34 35-44 45+ 56% 44%Male Female 5%6% 7% 11% 20% 26% 25% NY SF LA CHI BOS MIA DC Operating Systems Age LocationGender

5. 5 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org • Mobile app developers are competing aggressively for installs, but the battle for users doesn’t stop there - only 1/4 of the apps installed on a smartphone are used each week (slide 8) • Unpaid marketing channels are the most common means of discovery (slide 9) • Smartphone owners are still hungry for great new apps (slide 10) • Although not a primary means of discovery, mobile advertising is still an effective tool for promoting app awareness and installs (slide 11) • Awareness levels of new on-demand services are still relatively low with the exception of Uber (slide 12) • Penetration rates of different mobile commerce services differ by age, gender and location given the various value propositions and consumers needs (slide 13 & 14) • We are in the midst of the next evolution in digital commerce: web -> mobile web -> apps (slide 15) KEY TAKEAWAYS Survey Highlights

6. 6 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org • iOS users demonstrate higher purchasing activity than Android users (slide 16) • Every consumer vertical needs to have a mobile strategy (slide 17) • Offering a promotion / credit is an attractive value proposition to get a user to make their ﬁrst purchase through a mobile app (slide 18) • Appealing to the optimal mobile consumers is challenging as promotions / credits may get a ﬁrst purchase, but do not necessarily change long term purchasing behavior or customer loyalty (slide 19) • On-demand services are just beginning to hit their stride, and the market opportunity is massive (slide 20) KEY TAKEAWAYS Survey Highlights

7. 7 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org • On-demand services will continue to grow at unprecedented rates as awareness improves and more consumers adopt mobile commerce for their daily needs • New businesses will address niche markets in “mature” MSAs where demand is concentrated and mobile purchasing behaviors are well engrained • Aided by the playbook of Uber and Airbnb, new on-demand sectors should reach scale rapidly • Consolidation will accelerate as competition grows • Collaboration between complementary, non-competitive businesses will become commonplace • Legacy providers will attempt to “partner with” or “acquire” more innovative on-demand companies • The user interface will be the next battleground as companies solve for the current technical (great user experiences) and logistical (infrastructure and scale) challenges KEY TAKEAWAYS The Future of The On-Demand Economy

8. 8 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Consumers use only 1/4 of the number of apps on their phone each week MOBILE APP ENGAGEMENT Distribution of Apps Installed Distribution of Apps Used per Week Smartphone owners have dozens of apps, but use only a select few of the apps they have installed on a weekly basis (n=1,348) (n=1,348) 6% 9% 27% 43% 15% <15 15-29 30-44 45-59 60+ 5% 9% 32% 41% 13% <5 5-9 10-14 15-19 20+ Distribution of Apps Installed and Used per Week

9. 9 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Unpaid marketing channels are still the most common means of app discovery 4%5% 13%13% 30% 35% Unpaid channels account for almost 65% of the responses when consumers were asked about their primary means of discovering new apps MOBILE APP DISCOVERY App Store / Google Play Recommendation from a friend Facebook Non-digital advertising Mobile ads Twitter Unpaid Marketing Paid Marketing Distribution of Responses by the Primary Means of Discovering New Apps

10. 10 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org The demand for new apps remains very high as over 50% of respondents felt that they were missing out on great new services 40% 47% 60% 53% Are missing out on new apps Are not missing out on new apps 37% 49% 63% 51% 44% 57% 56% 43% 54%48% 46%52% The eagerness for great new apps is even more pronounced in young men (<35 years old) Women Men Women Men Women Men Women Men (n=280) 18-24 (n=477) 25-34 (n=288) 35-44 (n=298) 45+ Distribution of Responses to Whether Consumers Felt Like They Were Missing out on Great New Apps MOBILE APP DISCOVERY

11. 11 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Despite its ﬂaws, the majority of consumers continue to engage with mobile advertising MOBILE APP ADVERTISING % smartphone users who have intentionally clicked on a mobile ad for an app (n=1,348) 57%

12. 12 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Awareness of these services is still low, with the exception of Uber. Growth opportunities are abound. Uber is by far the best known on-demand service followed by GrubHub and OpenTable Uber AirbnbGrubHub FreshDirectOpenTable 85% 43%45% 43% Care.com 36% 5%25% 13% 6%16% 27% 13% Eventbrite Hotel Tonight Instacart Postmates Handy Drizly MOBILE APP DISCOVERY

13. 13 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Women are more likely to be aware of Eventbrite and Care.com Men are more likely to be aware of Hotel Tonight and Drizly 25-34 year olds are more likely to be aware of Handy and Postmates Awareness levels were also inﬂuenced by the demographic proﬁle of the respondent MOBILE APP DISCOVERY

14. 14 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Uber has extremely high awareness in LA and CHI; it is least recognized in MIA and DC Instacart was slightly better known in SF, while FreshDirect is more well known in most other markets (BOS, CHI, LA, DC, MIA and especially NYC) Seamless / Grubhub have a smaller market presence in SF and MIA, while the majority of respondents in NYC and DC were aware of the service Furthermore, the location of each respondent was another determinant of awareness levels MOBILE APP DISCOVERY

15. 15 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org While almost 50% of users have purchased through an app, adoption of apps for consumption still lags behind mobile web browser and desktop MOBILE COMMERCE % that have purchased through a computer web browser % that have purchased through a smartphone web browser % that have purchased through a mobile app that they installed 93% 68% 46% (n=1,348)(n=1,348) (n=1,348)

16. 16 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org iPhone users are more likely to have made a purchase on a mobile app 33% YES 67% NO 42% YES 58% NO 51% YES 49% NO iPhone was the only operating system in which the majority of users had made purchase through a mobile app (n=673) (n=639) (n=36) Distribution of Users who Have Purchased through a Mobile App by Operating System MOBILE COMMERCE

17. 17 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org Mobile consumers use apps to make purchases across a variety of different verticals 5%7% 23% 34% 44% 50%50%52% 56% 58% 79% Retail / Shopping Tickets / Events Food Delivery Car / Taxi Hotel Dining Airlines Health and Beauty Grocery Delivery Liquor Delivery Handyman / Cleaning (n=622) The majority of users who have purchased through an app have used them for retail and shopping, ticketing, food delivery, and transportation % of Mobile App Purchasers that Have Purchased within these Speciﬁc Categories MOBILE COMMERCE

18. 18 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org People who have not made a purchase on a mobile app would be most inclined to do so if offered a promotion or discount 18% 34%34% 37% 55% Promotion / Discount Recommended by a friend Saves Time Comparable Price Access to Premium Goods or Services (n=726) Distribution of Respondents based on the Potential Reasons They Would Consider Making Their First Purchase through a Mobile App Mobile commerce apps should be considerate of how to align their value proposition(s) to the fairly diverse demands of mobile smartphone owners MOBILE COMMERCE

19. 19 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org MOBILE COMMERCE The reason respondents chose to make a purchase through an app is also correlated with the frequency of mobile commerce activity Frequency of Mobile Commerce Activity Given the Reason for Using a Mobile App to Purchase a Good / Service Highest Frequency Average Frequency Low Frequency Received a Promotion / Credit Wanted to Purchase Something Immediately Access to Premium Goods & Services Enjoy Trying Cool New Tech Recommended by a Friend Consumers who stated that they adopted apps to purchase goods / services because they “Enjoy Trying Cool New Tech” are likely to purchase with the highest frequency while those who did so because they “Received a Promotion / Credit” are not likely to purchase very often

20. 20 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org MOBILE COMMERCE Industry Ground Transportation Dining Grocery Travel Family Care Pet Care US TAM ($B) $1,100* $660 $603 $80 $90 $55 Online Penetration Rate (%) <5% <10% <2% <20% <1% <1% Representative On- Demand Business Gross Margins (% of Rev for Representative On- Demand Businees) 20-25% 10-15% 25% 10-12% 60-80% 15% Mobile Transactions (% of Rev for Representative On- Demand Business) 100% 45% 25% 25% 40% 80% The market potential for on-demand services is enormous Sources: TechCrunch, Business Week, Bureau of Economic Analysis, National Restaurant Association, Forbes, Bill Gurley, The Detroit Bureau, Skift, PhoCusWright, American Pet Products Association, GrubHub, IESE, Rocket Financial, RetailWire, Expedia, Care.com, PandoDaily, DogVacay, Peapod, HighTable *Based on estimates by Bill Gurley and market ﬁgures on the total US Automotive industry

21. 21 The On-Demand Economy 2015 Mobile Consumer Survey @ondemandeconomy www.theondemandeconomy.org ABOUT THIS REPORT For the full 2015 Mobile Consumer Report contact us at info@theondemandeconomy.org or check out our website at www.theondemandeconomy.org. Powered by the on-demand fanatics at Button and our friends

2015 Mobile Consumer Survey

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2015 Mobile Consumer Survey

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