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Mobile Commerce Has Arrived as a Sales and Marketing Force

Mobile commerce (m-commerce) continues to grow by leaps and bounds.  According to comScore research from June 2013, consumers are now spending more time on online retailer sites using mobile devices than they do via laptops and desktop computers.  Perhaps more surprisingly, tablets are outpacing smartphones, 55% to 45%, as the platform of choice for m-commerce sales, at least among the 43 retailers that supplied sales data for the Internet Retailer 2014 Mobile 500 report.

Internet Retailer’s summary report also contained a number of interesting tidbits about individual m-commerce results:

  • The top two mobile retailers, Apple and Amazon, were projected to earn almost 40% of the $41.8 billion in U.S. revenues generated by m-commerce last year.
  • Apple’s m-commerce earnings were expected to grow 25% to $8.4 billion in 2013 (in fact, Apple reached $10 billion in sales via its App Store alone last year), while Amazon’s earnings were projected to double to $8 billion.
  • JackThreads.com, a members-only apparel retailer ranked 88th in the Mobile 500, earns 89% of its mobile revenue through purchases made on smartphones.  Its 2013 mobile sales were on pace to increase 357% over 2012 numbers.
  • Mobile sales for Market America, a product brokerage firm ranked 250th on the list, were projected to grow an amazing 571%  last year.

This is obviously good news for these companies, but what does the growth of mobile commerce mean for retailers in general?

First of all, it’s a very clear sign that every retailer should have a mobile strategy in place by now. That strategy should include presenting customers with an optimal user experience, leveraging their mobile usage to draw them to brick-and-mortar stores, and implementing mobile marketing tactics that support the retailer’s sales efforts.

According to a recent study, 30% of e-commerce web traffic and 15% of online orders in 2013 came via mobile devices, which now encompass a myriad of products, including Androids, iPhones, Kindles, tablets, and others. Retailers therefore need to think long-term when developing mobile solutions to ensure that their platforms will work for both current and future devices.  These design decisions should include identifying and employing best-in-class responsive and adaptive web designs; facilitating flexible content and rich media delivery to minimize the consequences of widely varying mobile connection speeds; and implementing a comprehensive testing strategy that includes multi-device/cross-browser testing. These key points are normally overlooked and can increase the costs of support and/or technical computing operations (TCO) if they’re not addressed early in the process.

Too many retailers have adopted a “one size fit all” mobile strategy. This isn’t the ideal approach, because smartphone and tablet users often differ in their shopping habits. Smartphone users are more likely to be on the go and therefore prefer as few clicks as possible.  Generally speaking, they also know what they want, so an emphasis on features such as search, store locator, and click-to-call is critical to optimizing their user experiences.

Tablet users, on the other hand, usually shop in slower-paced settings, and they tend to spend more time on sites and respond well to richer content and media.  They also spend more, on average, generating a higher AOV than smartphone or even PC users.  Just as importantly, tablet users are much more likely to make purchases than smartphone users are; smartphones are more commonly used as browsing devices.  Recognizing and catering to these divergent behaviors can offer retailers an opportunity to create engaging, unique shopping experiences that will set them apart from their competitors.

We also shouldn’t forget that mobile devices are now being used as tools that can drive operational efficiency in traditional brick-and-mortar stores.  By replacing traditional cash-wrap stations with mobile POS, retailers can improve long waiting times, re-allocate floor space, and provide a more personal shopping experience for their customers.  The use of tablet devices, combined with clienteling applications, has moved sales associates out from behind the counter and enhanced retailer-customer interactions.  Sales associates are now just a touch away from key insights on shoppers’ preferences and buying habits.

To truly succeed in the mobile commerce space, every online retailer will have to customize its mobile commerce strategy according to its own specific goals — which will require multi-variant testing  that focuses on the smallest details, such as whether individual users click to talk or to locate stores first, which users are willing to enable geo-location services, and more.  Successful retailers must also be ready, willing, and able to constantly engage in deep-dive analyses of the reams of data — both internal and external — that will keep coming in.

That said, it’s important to remember that even the latest data and reports are just snapshots of a young, quickly evolving marketplace.  M-commerce shopping “habits” are still in flux, and newer devices (say, mobile watches) or as-yet unknown technologies could siphon consumers away from smartphones and tablets.

Beyond that, the current picture remains fuzzy.  Take one example:  As noted earlier, Internet Retailer found that consumers prefer tablets over smartphones, 55% to 45%, during the purchase process, but comScore says that smartphones accounted for 44% of all minutes spent on retailer sites in June 2013, while tablets were used just 11% of the time.  These studies don’t invalidate each other, but the combined information raises an eyebrow or two.

And that’s not all; consider a couple of m-commerce differences between subscriber websites and traditional online retailers:

  • While RueLaLa.com (a web-only, flash-sale site that ranked #11 on Internet Retailer’s Mobile 500) attributed 40% of its sales to mobile platforms, and half of JackThread.com’s earnings came from mobile sales, online retailers in general received only 17% of their total revenue via m-commerce as of May 2013.
  • In contrast to Internet Retailer’s data from 43 e-tailers, FreeShipping.com, Clarus’s flagship subscription program that offers savings on online shipping and shopping orders at over 1,000 retail websites, reports that its members favored smartphones over tablets by a 54-46 ratio in 2013.

These datapoints reinforce the fact that there is no universally applicable m-commerce approach.  Certain tactics, such as responsive and adaptive web design, will become standard practice, but e-tailers will need to keep re-testing and re-examining every aspect of their individual m-commerce efforts to stay competitive and maintain optimal efficiency.

The best approaches to and platforms for mobile commerce have yet to be determined, but m-commerce itself is no longer “the next big thing” — it’s here, and it’s here to stay.  Online retailers that quickly embrace and continuously enhance their m-commerce capabilities will enjoy a sales and marketing avenue that can reach consumers virtually anywhere, at any time.

About Dwight Pitter

Dwight Pitter is Senior Vice President of Information Technology at Clarus Marketing Group. He has almost two decades of experience in e-commerce, business process re-engineering, and strategic planning, including leadership positions at Coach and Avon.

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