For the past few years analysts and solution providers have been saying that Retailers and CPGs should consider whether or not the time was right for them to jump into m-commerce. Many tried, some failed, but many more decided that it was still time to wait and see how the space developed. In the last 2 years, tight economic times made it even harder for IT and business groups within these organizations to make an argument for the capital expense, in the absence of really hard data showing the successful adoption of these strategies, and solid ROI.
Retailers and CPGs who have made the decision to move into mobile recently have found that it was easier than they originally expected. What is different now that has made this the case? First of all, times have changed. The market has changed. Today 75% of US adults and teens have a mobile phone, and 84% of Europeans in the same demographics do as well. Technological advances have also initiated a sea change in what people do with their mobiles. Devices are capable of performing a lot more than voice functions now. SMS, a relatively early mobile feature that has been around since the mid 1980s, is now very widely adopted, with over 50% in the US and 79% of Europeans regularly sending text messages. Among younger demographics SMS is even more widely used; 54% of US teens send text messages daily. Other technological advances, such as a vast improvement in the browsing experience on newer mobiles, has also increased adoption of these technologies. Handsets like the Apple iPhone, Palm Pre and Blackberry Storm, with their bigger, color touch-screens have raised the bar for what is possible on a mobile.
The mobile device has become far more ubiquitous in our daily lives. It’s not just the uber-geek that checks their email on their mobile anymore, but does that fact automatically translate to m-commerce?
The truth is that many of the early adopters of mobile commerce took a “build it and they will come” approach when they decided to enter the market, without doing any core analysis of their own consumers. They built mobile applications without thinking about mobile’s “sweet-spot”. As Forrester says in their recent Why Mobile’s Time has Come report from July 2009:
“Some activities make sense on a mobile handset but not on a PC.”
A quick look at who has been successful and where will show that this is true. Simply throwing up a mobile optimized site was necessary, but not sufficient to grab that extra market share. The mobile has a complementary role to play in the cross-channel environment. There have been huge advances in mobile browsing in the past couple years, that have made it so that shopping on a mobile is richer, and doesn’t feel as forced as before. However the most successful mobile implementations have been ones that have taken into account how and when consumers want to use mobile applications. Mobile sites and applications that make the most sense and are more likely to be adopted by consumers are things that people need to do when they aren’t in front of a PC. Consumers are looking for apps that make their lives easier and save them time. That is why applications like geo-location (find me a gas station near me so I can fill up the car), flight times (is my flight going to be delayed), and email have been some of the applications that are the most widely adopted. These things are mobile-centric. It makes perfect sense that they would appeal to mobile consumers and be adopted.
It has taken Retailers and CPGs a little while to figure this out, but they are catching on. What this means is that it’s not necessarily the fully blown shopping experience on the mobile that will give organizations the most benefit. In many cases complementary, mobile specific features may gain you the most traction. Organizations that analyze their consumers and try to determine their mobile demographic makeup and needs will see a higher return on their investments.
That’s not to say that mobile shopping sites have no place, they certainly do, but these would not be the only mobile opportunities. Take eBay as an example. eBay first adopted a mobile solution in 2004. Its adoption was slow at first, but eBay had an advantage in that their business model lent itself well to the mobile “sweet-spot”. Due to the timed nature of eBay auctions, consumers were often away from their computers when the countdown ended. Anybody who uses eBay regularly knows that those last few minutes can often determine who will win and who will lose the auction, based on last minute bids.
Today eBay is one of the most successful m-commerce players. eBay has both a mobile optimized website and mobile applications that can be downloaded and installed on various handsets. According to Internet Retailer’s recently published Mobile Commerce Universe, eBay now has one of the highest number of Unique Monthly Visitors for m-commerce, with over 5,422,000 visits per month on the mobile site and mobile apps combined. Other successful m-commerce players also benefit from the fact that their offerings play well in the mobile space. Netflix at 2,203,000 UMVs and Ticketmaster’s 2,025,000 UMVs are a good illustration of that.
Retailers and CPGs that do an analysis of their consumers' mobile behaviors will be able to use that data to inform the decision making process around their m-commerce roadmap. SMS is much more widely adopted than mobile browsing is in the US, but the mobile optimized sites and mobile apps are richer and more appealing. Knowing what mobile demographic your consumers are in, and what kind of features your consumers want to use, will allow you to make much better decisions about what steps to take when. If you are a discount store it may make more sense to use SMS than an iPhone app. If you are a high end fashion Retailer, whose customers have a higher proportion of iPhones than the general public, you might find the iPhone app the smarter route. Just making the decision to be in the mobile space isn’t enough. As Forrester states in their Mobile Technographics report from April 2009, “Choosing tactics before objectives is practically a guarantee that ROI targets will remain out of reach.” It’s not “build it and they will come”, it’s “build the right thing, and they will come.”
So what kind of features are consumers looking for, and what kinds of applications should you be considering? Shop.org and BIGresearch’s September 2009 American Pulse Survey illustrates the type of mobile features that consumers are drawn to. This research shows that 69.9% of US respondents use a mobile device regularly, and this number jumps to 79% in the $50K+ demographic. When asked to rate which features most appealed to them, the following features were the highest rated. These were deemed to be “somewhat” or “very useful”:
On-line Specials – 29.7%
Coupons – 36.4%
In-store Events and Specials – 38.2%
In-store Product Availability – 38.8%
Consumer Ratings and Reviews – 39%
Price Information – 39.1%
Product and Price Comparison Information – 41.7%
Store Information Including Location and Hours – 41.9%
This is a pretty good indication of these features adoption potential. You can see that the features that score highly here are, for the most part, ones that play to the mobile “sweet-spot”. It’s no accident that the store location and hours are the highest rated mobile feature.
Remember that with mobile applications you can’t be everything to everyone at the same time. Survey your audience, and plan your mobile sites or applications with them in mind. Don’t be afraid to dip your toe into the mobile pond. Small, incremental applications that can make your customers lives easier or save them time, and which do so in “channel-appropriate” ways, can give you big returns.
The Cactus CommerceLive solution offers ways for you to accelerate your mobile channel adoption. To learn more about how CommerceLive can help you embrace the mobile channel, download the whitepaper.