WHITE PAPER

Failure or Success for Next-Generation

Mobile Commerce
E-tailers Need New Ways to Accelerate Immersive Websites Before the Holidays

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TABLE OF CONTENTS

Executive Summary
Page 3

The Rise of Immersive

E-Commerce Sites
Page 5

Example: How Bonfaire

Delivers a Rapidly Immersive
Mobile Experience
Page 5

Recipe for Failure: Slow

Mobile Buying Experiences
Page 6

One Second Can Cost

You 7 Percent of Sales
Page 6

On Mobile, Its Even

More Problematic
Page 7

Speed or Quality: A Devils

Bargain for Publishers
Page 8

Neither Visual Downgrades

nor Slow Immersive
Experiences Will Succeed
Page 8

Speed and Quality:

Web Application Streaming for
Fast, Premium Web Experiences
Page 8

Requirements and
Network Reliability
Page 9

Conclusion
Page 10

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Executive Summary

Upgrading the Mobile

Commerce Experience:
Emergence of
Immersive Sites

Far more shoppers will make purchases with iPads

and other tablet devices over congested wireless
networks during the 2013 holiday season than ever
before. Amazingly for such a new product category,
in 2013 tablets will account for 65% of mobile
commerce. This trend has been building throughout
the year. In 2013 mobile commerce will approach
$39 billion in total sales. That is nearly triple the
amount spent in 2011.1 In addition, high-resolution
tablet displays fuel the mobile consumersappetite
for high-resolution imagery as part of their product
selection process.
Luxury brands are showing much faster growth than
the average online retailer. These brands often have
been early adopters of innovation to improve their
users online experience and increase sales. Their
websites oer lessons for other online retailers. To
entice and captivate their high-end clientele and
create a close-to-showroom experience, luxury
retailers have been shifting to more visually
compelling, higher-delity immersive websites. These
emerging
premium
sites
feature
large,
high-resolution imagery and complex technology.
They require more data and therefore take longer to
load on users devices. This has already proven to be
a recipe for failure, driving away frustrated
customers. To overcome this slow-loading
catastrophe, online retailers must take steps to
accelerate load times and improve Web
performance. This is particularly true on mobile
devices, which account for the fastest growing
segment of online retail transactions.
This white paper examines the imperatives for
next-generation immersive websites and how to
achieve better quality and website performance at
the same time. It also introduces a new technology to
eciently deliver premium, immersive web
experiences without making users wait: the Web
Application Streaming Network.

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Mobile shopping particularly on tablet devices is

having an outsize impact on the ecommerce world.
According to a study released in April 20132, this year
15% of online sales will take place via mobile devices,
up from 11% in 2012. By 2017, the percentage of
online sales on mobile will rise to 25%. Mobile
purchases and tablets in particular account for a
bigger piece of the pie, and are the fastest growing
segment of online shoppers.
US Retail Mcommerce Sales, 2011-2017
billions, % change and % of retail ecommerce
$108.56
168.9%
$92.39

$71.16
$53.41
82.0%
$24.81
$13.63

7.0%

2011

11.0%

2012

$38.84
56.5%

37.5%

33.2%

18.0%

21.0%

24.0%

2014

2015

2016

29.8%

25.0%

15.0%

2013

Retail mcommerce sales

% Change

17.5%

2017

% of retail ecommerce

Note: includes products or services ordered using the internet via mobile
devices, regardless of the method of payment or fulllment; excludes
travel and event ticket sales.
Source: eMarketer, April 2013
154273

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Lessons from Luxury M-Commerce: Tablets Coming On Strong

For the online luxury market, the fastest growing
segment is mobile and, in particular, shopping via tablet
devices. The emergence of Retina-class tablets (primarily
the Apple iPad) has further heightened the urgency for
luxury retailers to bring their A-game online.
A survey by The Luxury Institute released in May 2013
found that over the past year, 20% of wealthy
consumers reported using tablets to make a purchase.3
According to the survey this is a higher percentage than
catalog purchases (17%), telephone orders (15%), or
buying via smartphone Web access (14%).
The outsized impact of tablets is even more
consequential for luxury brands because sales in that

sub-sector of online retail are growing far faster than the

overall online retail sector. Consultancy Bain & Co. has
tracked annual increases in global online luxury sales of
25% for the past two years, even as overall sales in the
global luxury goods market have slowed.4 This is roughly
150% the total growth of global online luxury sales
overall. As Bains analysts report, Physical and digital
storefronts are accelerating their arms race for oering
more compelling engagement to wow the luxury
shopper.
In other words, luxury brands have understood the
handwriting on the wall: make radical improvements
now, or lose customers.

Tablet Users Put Their Money Where Their Mouse Was

Not surprisingly, tablet users are more likely to make
purchases online than smartphone or even laptop users.
In fact, online purchase rates for tablet users are
between 33% and 66% higher than non-tablet user, as
reported by Forrester Research.5 E-commerce CEOs
echo this fact. According to Fab.com CEO Jason
Goldberg, more than 40% of Fab.coms iPad customers
make their rst purchase within three months of joining,
versus less than 10% of non-iPad customers. iPad
shoppers also spend more.6 So by his calculation, while
those buying with iPads are now about 15% of total
purchasers, they are forecast to generate 25% of sales
over the next two years.

Retina Display Boosts the Importance

of Tablets for Luxury Brands
The introduction of the high-resolution Retina display on iPads is
changing the game for mobile retail. For the rst time, mobile
device owners can see granular pixel detail in online images. This
heightened visibility pushes e-tailers to replace old images with
newer, high-resolution images that cater to the tablet crowd
seeking a lean-back browsing experience.
This disproportionately impacts the online luxury retail market.
Auent shoppers are far more likely to own a powerful mobile
device. An April 2013 survey by the Luxury Institute of US Internet
users ages 21 and older with gross incomes above $150,000 found
that more than 8 in 10 owned a smart phone, while 56% reported
owning a tablet.1
These penetration rates are well above those for the overall US
population on smartphones or tablets. This likely explains why
the propensity to buy with a tablet is even more pronounced
among luxury goods shoppers, with tablet users roughly four
times more likely to make a purchase than smartphone users,
according to auent consumer behavior research consultant
Bob Shullman of the Shullman Research Center .1

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The Rise of Immersive E-Commerce Sites

To meet the needs and desires of this discerning group
of auent online customers, a new generation of
immersive sites is emerging. These sites deliver
premium online experiences with large, high-resolution
images and high-quality editorial content. Immersive
sites aim to synthesize an experience that combines the
ease of browsing through a glossy fashion magazine,
and the visual richness of a physical showroom, with the
ability to visually dive into the smallest detail of a
product-and easily switch to exploration of other
products.
To accomplish this, immersive premium sites typically
deploy a set of complex engagement features such as
multiple large images of a single item, 360-degree views
of items, and granular zoom capability. These allow

shoppers to inspect in ne detail nearly any handbag,

shoe, or haute couture jewelry almost as if they are
holding the item in their hands.
The rationale behind immersive sites is well established
and well proven. Larger, higher-quality images draw
higher click-through rates (CTRs), improve website
stickiness, and boost conversions to purchases. A
study by a research team at EBay Labs found7 that
listings on the online auction and shopping site which
adhered to basic guidelines for image quality (display of
image against a white background, and use of
higher-resolution images) enjoyed higher CTRs. Other
case studies8 have found online retailers experience
double-digit to triple-digit increases in conversions after
increasing the size and quality of original images.

Example: How Moda Operandi Delivers a Rapidly Immersive

Mobile Experience
A leader in the premium, immersive site category is
online luxury retailer Moda Operandi, which curates a
catalogue of up-and-coming designers of accessories
and allows subscribers to buy these items before they
hit the catwalks of Milan, New York or Paris. The site
seeks to bridge the gap between fashion-hungry
consumers eager to get exclusive access to hard-to-nd
items and designers who need a reliable, high-margin
channel. Mode Operandi is growing at a triple-digit clip
one of the faster-growing luxury retail sites at present.
To provide Moda Operandis discerning users with a
near-showroom experience, the company uses
professional photographers to take high-quality images,
which are then posted on the site at sizes averaging 1.5
megabytes each. This is ve to seven times larger than
the largest image sizes used most retail websites today
and several times larger than the images used on the

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average luxury retail site. Rather than use a single large

image to show each item and a number of smaller
thumbnails to show alternative views, Moda Operandi
places on each page a half-dozen of these very large

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images. Users can zoom in on items to observe stitch

patterns and fabric density as well as specic aspects of
cut and curve, from virtually any angle.
Moda Operandi provides the same high image quality and
user experience to its customers on desktop, laptop, tablet
and smartphone form-factors. This is rare in an industry
where companies often maintain three completely
dierent web applications to accommodate the three
main display size groups. With 50% of its trac coming
from mobile devices and over 30% coming from iPads
both percentages that continue to grow Moda Operandi
must deliver a premium experience to mobile users. We
really look to perfect a high-end, high-touch luxury feel
where our members can come and get immersed and
drawn into the products and the collections. Thats why for
us imagery and responsiveness of the site are so
important. We put a lot of eort into technology that

makes page transitions very smooth and very, very quick,

says Moda Operandi CTO Keiron McCammon.
As a result of its ability to maintain superior web
application performance while delivering a premium user
experience, Moda Operandi enjoys conversion rates 25%
to 50% above those commonly found among luxury
e-commerce sites. Many other luxury retail sites are
trending towards larger images and more of them for
each product as well as granular zoom capabilities.
Innovative sites continue to add transactional capabilities
and establish direct relationships with their customers for
direct commerce as well as driving them to showrooms.
These brands increasingly have to maintain performance
through spikes in trac and web usage resulting from
customer promotions or new collection launches keyed to
seasons and shows.

Recipe for Failure: Slow

Mobile Buying Experiences

One Second Can Cost

You 7 Percent of Sales

Showcasing high-end products or any product, for that

matter with compelling, high-resolution images comes
with a cost. While immersive site improvements drive
usage, stickiness and purchases, these enhancements
also super-size website and web applications. Larger
images, 360-degree viewing, personalization features
and dynamic construction of web sites targeted to
individual users can boost the load factor the amount
of data contained in a web application by 50% or more.
Logically, this increases the amount of time it takes for a
user to access the website, to see the improved images
and functionality load on a page, and to begin interacting
and purchasing.

According to 2013 research by web performance

measurement company Compuware , every one-second
delay in page load time results in 11% fewer page views
as well as a 7% decline in conversions. After an
unsatisfactory web experience, Compuware found, 88%
of people are less likely to return to a website, 78% went
instead to a competitors site, and 42% discussed their
bad experience with friends or in forums online. Aside
from reducing user engagement and conversions, slow
sites suered reduced search engine rankings after
Google began to include page load times in its ranking
criteria. The accompanying chart, from a presentation by
Walmart Labs , shows the impact of page load on
conversions taken from real customer data at
Walmart.com. Walmart Labs found that customers who
converted on their website experienced page load times
of 3.22 seconds while non-converting visitors
experience page load times of 6.02 seconds. After
Walmart optimized its sites to improve page load times,
the Operations team

When early generation immersive sites suered from

slow application load times, users were forced to wait,
and they were frustrated. This not only reduced return
trac, but also damaged the bottom line and brand
reputation.

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recorded that every 100ms improvement led to a 1%

increase in incremental revenue and every 1 second
improvement led to a 2% boost in conversion rates.
Various remedies are available to improve
performance. Until now these remedies have not
oered a signicant improvement in page load and site
performance for mobile users. By deploying web
performance improvement technologies, brands such
as Rolls Royce, Prada and BMW succeeded in reducing
load times and time-to-click for access over wired
broadband networks.

Conversion Rate Vs. Load Time

Population (%)

0-1

1-2

2-3

3-4

4-5

5-6

6-7

7-8

Conversion Rate (%)

8-9

9-10 10-11 11-12 12-13 13-14 14-15 >15

Load Time (Seconds)

On Mobile, Its Even More Problematic

However, the performance of immersive sites on wireless
devices the fastest growing segment of the online luxury
retail marketplace is generally inferior, and often painfully
so. Download speeds over wireless and mobile networks
remain far less predictable than over wired networks. All
types of mobile networks, when accessed from public
domains, regularly clog.
Think of access from the WiFi network at a coee shop
during the morning hours or a 4G network in a crowded city
downtown during rush hour. This high variability and
sluggishness creates a challenge for web performance
engineers, who must optimize a high - quality site for a the
full range of potential network conditions.
Regardless, mobile users expect their web experience to be
just as fast as they experience on a desktop. A study by
Equation Research11 found that over 70% of all mobile
users expect sites to load quickly, up from 58% two years
earlier. First impressions also matter. The study found that
nearly half of all mobile users are unlikely to return to a
website that was dicult to access from their phone and
57% are not likely to recommend the site to a friend.
Customers using mobile devices will punish brands that fail
to deliver superior web experiences, by shopping and
browsing elsewhere. Over the past decade, user

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expectations on page load times have dropped dramatically

from four seconds as an acceptable standard to three
seconds a number which has likely been decreased as
speeds of home broadband networks have jumped.
While the majority of online shopping still happens on
laptops and desktop computers over standard wired
broadband connections, mobile shopping is quickly catching
up. The adoption of smartphones has been several orders of
magnitude faster than the adoption of PCs and laptops. The
adoption of tablets, still nascent and led by Apples iPad, has
been even faster than the adoption of smartphones. By
2013, retail transactions executed over mobile devices
should eclipse $13 billion in the U.S. alone, according to
Forrester.
Another game changing inuence is Googles announcement
in the spring of 2013 that it would begin to factor mobile
website response times into search rankings. The volume of
mobile search queries is growing much faster than the
volume of search queries over laptops or desktops. So
e-commerce sites that fail to deliver fast response times to
mobile users risk getting buried in the search results, even
though they have done everything else right to rank high in
organic rankings. And, as Shullman notes in his report,
auent users do not like to wait for pages to load and they
wont jump to page 15 to nd your brand.

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Speed or Quality: A Devils

Bargain for Publishers
To date, online retailers with rich or complex websites
have relied on legacy technologies such as content
delivery networks (CDNs) to improve page load times.
The fundamental acceleration technique with CDNs is
to cache frequently used components, such as mages,
and store them close to the user. However, these
technologies were designed to solve 10-year-old
problems of latency when the core of the Internet was
slower and less reliable. Today, the core is far faster
and more robust. Delivering large cached images over
variable and often slow last-mile wireless connections
from the tower or the WiFi router to the device still
results in long wait times that can infuriate and annoy
users. CDNs were not designed to solve this problem
and cannot provide performance improvements over
WiFi without a signicant downside.

Neither Visual Downgrades

nor Slow Immersive
Experiences Will Succeed
To minimize the time a user waits until they can interact
with a luxury site, many brands have resigned
themselves to a visual downgrade of their mobile or
tablet sites by using lower-quality images, removing rich
graphics and slimming down engagement techniques.
To avoid this fate, some super-premium site owners
have resorted to using adaptive image optimization.
This technology allows publishers to optimize image
quality for users depending on network conditions and
send mobile device owners lower quality images when
their network connections are slow.
Unfortunately, lower quality images result in diminished
user experiences, lower clicks, reduced time onsite, and
lower conversion rates. The damage extends to the
actual brands; people with a less satisfactory online
experience are less likely to visit a physical store or
recommend the site to a friend. The damage caused by
poor quality images is magnied on Retina-class
devices with high-quality displays.

Speed and Quality: Web Application Streaming

for Fast, Premium Web Experiences
A new technology invented by Instart Logic, Web
Application Streaming, allows online retailers to avoid
having to choose between fast load times and
premium web experiences. A growing number of
luxury site publishers have deployed the Web
Application Streaming Network.
Taking lessons from the client-server architectures
pioneered for video streaming (Adobe, Real Networks),
Instart Logic establishes a client-server relationship
between end users devices and the delivery network. It

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does this by injecting a lightweight (25KB) JavaScript

hypervisor (called the NanoVisor) into the browser on
the end users device and connecting it to the
AppSequencer, Instart Logics intelligent streaming
engine in the cloud.
The NanoVisor collects information on how web
applications are loading and sends it to the
AppSequencer, which then builds a prioritization
prole for each page on a retailers website. The
AppSequencer divides up web assets into smaller

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fragments, including images, HTML, and Flash les.

Once this partitioning is completed, it streams the
fragments out in order of priority to allow users to
in-teract with a web page as quickly as possible. The end
result is that after just a subset of data has
down-loaded, the browser can display and allow rst
interaction with the web experience. The rest of the
data then comes in the background, delivering the full
experience only moments later.
For an immersive e-commerce site, the Web Application
Streaming Network works in the following manner.
From the rst visitors to the site, Instart Logics network
learns about their usage of the website.
As the AppSequencer gains intelligence about what the

e-tailers servers are loading and in what order, the Web

Application Streaming Network prioritizes asset
delivery.
The network identies large images to be delivered on a
page and shopping cart, and divides them all into
smaller fragments. It prioritizes the information to allow
for key components of a page to display and become
clickable with only a partial delivery of data. After this
initial display, the network continues streaming the data
so that while the user views it, the image quality quickly
improves to full resolution. At the same time, in the
background, the network streams in components of the
other images on the page in order of prioritization.
These two processes happen so quickly that users
barely perceive the two stages.

Typical Results for a Rapidly

Immersive Website

Requirements and
Network Reliability

This level of prioritization allows Instart Logic to cut load

times for e-commerce web applications by 30% to 40% on
a typical immersive site, and improve web performance by
almost 2x on initial page and image loads. In fact,
publishers of immersive online retail and travel sites
regularly enjoy immediate improvements in page load
times of one second to two seconds. As their product
assortments expand or a site oers more personalized,
dynamic content to end users, Instart Logic helps by
delivering faster load times of this type of content.

Instart Logics web application streaming does not

require website publishers to modify any code, nor do
end users download any plug-ins or extra software.
Site publishers can deploy the Web Application
Streaming Network with a simple change of DNS
settings to redirect trac through the Instart Logic
cloud service. The Web Application Streaming Network
works across all standards-compliant HTML5 browsers,
including Google Chrome, Mozilla Firefox, Apple Safari,
and Microsoft Internet Explorer. Instart Logics network
is deployed globally across more than 30 locations
covering all the major Internet peering points.

It is worth noting that dynamic content can be streamed

but cannot be cached, because personalization requires
that each page be built on the y with assets pulled from
the origin server specically tting the prole of an
individual end user. Caching of frequently-used page
elements can help marginally, but not to the degree that
web application streaming will.

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The network is built with no single points of failure and

multiple levels of redundancy at every layer, from racks
to cabinets to redundant load balancers to power
supplies to ISP connectivity. To date, Instart Logic has
delivered uptime of 99.9999% and has not
experienced a single signicant outage. Instart Logic is
designed to be a drop-in replacement and signicant
improvement over CDNs.

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Conclusion
Online retailers have a sharp point at their backs,
pushing them to improve website quality, to upgrade
visually, and be faster as their customer base shifts to
mobile access. Instart Logics Web Application
Streaming Network constitutes a superior way to
deliver their high-delity and rapid immersive sites to
all e-commerce customers, particularly to users of
mobile devices, and most especially to users of
high-value tablets.
E-commerce sites will fall behind unless they radically
improve both quality and speed, especially for mobile
customers. Early attempts to boost quality failed and
actually alienated customers, as speed lagged. A
growing number of retailers have solved this tradeo

with a new technology that replaces the traditional

CDN: Web Application Streaming.
The accelerated, rich experience enabled by web
application streaming avoids the slowdowns
experienced by early publishers of visually upgraded
websites, and is proven to boost user retention and
conversation rates. There is a bevy of optimization
techniques
available
to
website
publishers.
Notwithstanding all those, replacing the traditional
CDN with web application streaming is potentially the
key to signicantly faster, immersive website
performance and success with the next generation
of mobile commerce.

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http://www.emarketer.com/Article/Smartphones-Tablets-Drive-Faster-Growth-Ecommerce-Sales/1009835
http://www.emarketer.com/Article/Smartphones-Tablets-Drive-Faster-Growth-Ecommerce-Sales/1009835
http://luxuryinstitute.com/blog/?p=2448
http://www.ipmark.com/pdf/lujo_2012.pdf
http://online.wsj.com/article/SB10001424052970204010604576597151983657300.html
http://betashop.com/post/19400841070/fab-custora-calculate-the-lifetime-value-of-an-ipad
http://wwwconference.org/www2011/proceeding/companion/p45.pdf
http://econsultancy.com/us/blog/62391-do-bigger-images-mean-improved-conversion-rates-three-case-studies
http://www.compuware.com/content/dam/compuware/apm/assets/whitepapers/WP_Web_Load_Testing_is_Good_Business.pdf
http://www.webperformancetoday.com/2012/02/
http://www.gomez.com/wp-content/downloads/19986_WhatMobileUsersWant_Wp.pdf

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