Rakuten: Everyone's Mobile Marketplace

To better understand the full value of mobile and cross-device customers, Rakuten Ichiba, one of Japan’s largest e-commerce sites, looked beyond short-term KPIs and focused on the lifetime value (LTV) metric. Its learnings helped boost monthly mobile visitors by 40% and mobile conversions by 9%.

GOALS

  • Attract high-value mobile customers
  • Improve cross-device experience for everyone

APPROACH

  • Explored lifetime value (LTV) metric to understand the value of mobile customers over the long term
  • Created targeted content with personalized data
  • Optimized mobile advertising

RESULTS

  • Raised monthly mobile visitors by 40% in three months
  • Increased mobile conversions by 9% in three months
  • More than 50% of revenue now comes from mobile customers

Rakuten’s outlook

Rakuten Ichiba first began providing its service on mobile devices when feature phones became popular a decade ago. The company has since been continuously improving its customer experience, viewing mobile as one of the most important contact points with its customers, especially in recent years as smartphone use has skyrocketed.

Today over half of Rakuten's customers access the site from more than one device. "Our analysis showed that multi-screen customers can be nurtured to become premium customers with high spending, so we began shifting our focus from PCs to smartphones to respond to this insight," says Naho Kono, Rakuten Ichiba’s Executive Officer of Media Planning and Business Creative and Web Design Department Manager.

With this in mind, Rakuten set out to attract more of these high-value mobile customers and improve the cross-device experience for everyone.

How its journey started

The Rakuten team realized it should invest more in mobile customer acquisition but found it hard to justify that based on key performance indicators (KPIs) alone. Looking only at mobile performance, Rakuten saw low conversion numbers and high cost-per-acquisition (CPA). It knew this wasn’t because mobile customers weren’t converting; rather, it was that they were first browsing on their mobile devices, and then buying on their computers.

Rakuten thus began to explore another metric—the lifetime value (LTV)—to understand the value of mobile customers over the longer term.

What Rakuten learned about mobile shoppers

  • Multi-channel matters. Rakuten found that its highest-spending customers were often those who connected through all three digital channels: desktop website, mobile website, and mobile app. Moreover, many of those customers now connect with mobile first.
  • Mobile shoppers expect a personal experience. A mobile device is more personal than a desktop is. Shoppers expect to receive information that is tailored just for them, from the products they're offered to the ads they see.
  • Mobile behaviors evolve quickly. Companies must be nimble and quick to respond to ever-changing mobile consumers’ habits. "We check various indicators on a daily basis to track how consumers are responding to our advertisements," says Kono. "Depending on the results, we might request a change in budget, even in the middle of a term."

Changes and solutions

  • Strengthen the long-term focus. Rakuten discovered that short-term KPIs didn't reflect the full value of mobile and multi-channel shoppers. Today, it uses a lifetime value-based ROI that measures all of the ways mobile can affect a sale, from driving an immediate purchase to influencing later sales. It now estimates LTV on the product level up to three years in advance, resetting its KPI accordingly.
  • Optimize content with personalized data. Mobile customers tend to visit sites more frequently than desktop customers do. Rakuten learned that for best results, these customers need unique mobile content that is updated frequently and personalized to reflect their interests. The company began to analyze data about the gender, age, usage time, access history, and purchase trends for each device. It reviewed each segment's impact on ROI, and then A/B tested its ad creative content and optimized.
  • Optimize advertising. Rakuten optimized its investment in mobile ads. The company raised bids for mobile customers who had recently visited the Rakuten Ichiba website but hadn’t yet made a purchase. It also raised bids for keywords frequently used by new customers and created new mobile-specific ads to reach those potential customers.

Results and future plans

Rakuten's initiatives have grown its business significantly. In just three months, it raised the number of monthly mobile visitors by 40% while also increasing mobile conversions by 9%.

“The mobile future looks bright,” says Kono. “At Rakuten, we always care about improving and expanding our business, so we value measures that lead directly to results,” she says. “We will continue to focus on creating a better experience for mobile and omni-channel shoppers because more than 50% of our revenue now comes from mobile customers.”

At Rakuten, we always care about improving and expanding our business, so we value measures that lead directly to results. We will continue to focus on creating a better experience for mobile and omni-channel shoppers because more than 50% of our revenue now comes from mobile customers. Naho Kono, Rakuten Ichiba’s Executive Officer of Media Planning and Business Creative and Web Design Department Manager

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