Mobile commerce is easily outpacing other retail channels as the fastest-growing and with only one way to go: up.
Dave Sikora, CEO of Digby and one of the leading mobile commerce experts, explains why retailers must have skin in the mobile game – and quickly. His analysis, which would confirm Forrester Research’s forecast of an estimated $8 billion in mobile commerce transactions this year, prove how consumers expect even more from their Web- and application-enabled smartphones and tablets.
“Long gone are the days where mobile was just a channel to purchase last-minute gifts and on-the-go items,” Mr. Sikora said from Digby’s Austin, TX, headquarters.
“Now, retailers are seeing consumers purchase products such as chocolate and flowers all the way up to expensive jewelry, full furniture sets and luxury clothing,” he said.
“Consumer mindsets and expectations are that they should now be able to purchase anything on a mobile device that they can on the computer or in a store.”
In this interview, Mr. Sikora discusses mobile commerce trends, the holidays, what consumers are buying on mobile and their expectations, and why retailers must act fast to embrace the brightest spot in retail. Please read on.
What seems to be the dominant trend this year in mobile commerce?
We see three major trends across the 40 retail brands we support through the Digby Mobile Platform and from the overall retail and mobile industry.
First, consumers are embracing mobile commerce as transactions grow exponentially, but they are also using mobile to search and browse and then click on “Find a retail store.”
Across the Digby Mobile Platform, we see mobile transactions in the millions that range from gifting to large purchases including luxury goods, jewelry, apparel and furniture.
What’s even more interesting is that for every one mobile transaction, the store locator is used 63 times, showcasing that mobile can have a significant influence on driving customers to the retailer’s store so they can touch and see the product in person before they buy.
This is a huge opportunity for retailers to help drive traffic to their stores.
Next, retailers now recognize that mobile can have a strategic impact across all channels, especially in their stores where 90 percent of sales occur.
The beauty of mobile is that retailers are leveraging it across all channels, including catalogs and in-store through the use of their retail branded rich app, increasing sales and customer loyalty and driving consumer analytics to learn more about in-store buying behavior.
More and more consumers are using their smartphones and the retailer’s rich app as a shopping companion, scanning QR codes within catalogs or checking in to a store location to see promotions and receive discounts.
In addition, consumers are scanning UPC and QR codes to access more detailed product information including ratings and reviews and video demonstrations, and participate in store exit surveys that can earn shoppers loyalty club points.
Retailers can now send highly relevant messages and offers through their branded rich app directly to their customers based on their location to geo-fences around geographic or store locations.
Finally, retailers who used a tactical approach like trans-coding or screen scraping their ecommerce site to enable a mobile Web site are quickly realizing its limitations and are moving to an enterprise grade platform strategy to deliver the richest mobile experiences across all channels.
We see many retailers who initially went with a trans-coded solution realize that they were boxed in and could not deliver the unique cross-channel experiences.
Retailers also are looking for an enterprise grade mobile platform solution that is designed specifically for the deep mobile use cases that is PCI Level 1 Certified, and that offers SLAs and 24×7 support.
Are retailers investing more in mobile apps or the mobile Web?
The answer is both.
Most retailers start with a mobile-optimized Web site to reach the masses and then develop a rich app for the iPhone, Android or BlackBerry for their most loyal customers and to enhance their in-store experience.
Retailers understand that it is through the mobile Web that consumers will initially interact with their brand from a mobile device.
Mobile Web allows customers to benefit from a fast, easy-to-use interface for browsing, searching and buying while on the go.
The retailer can then engage and transform the customer from occasional visitor to loyal customer by having them download the mobile app for faster, more frequent and higher value experiences whether they’re in the store or on the move.
As mobile moves more and more towards enabling a great in-store experience, look for rich apps to become the focal point as the retailer’s own mobile app becomes the new loyalty card and engagement touch-point for the consumer while in the store.
Apple and Android take a cut of mobile commerce sales and also hang on to customer data. Will that drive more retailers to mobile sites where they don’t have to share revenue and slender profit margins with app stores?
Apple’s and Android’s emphasis to date around this topic are more focused on digital goods versus physical good retailers.
For physical goods retailers, which is Digby’s focus, there is no cut of sales provided to Apple or Android. If there were, it would have a significant negative impact on the retail industry.
What kinds of categories are now more established on mobile?
Long gone are the days where mobile was just a channel to purchase last-minute gifts and on-the-go items.
Now, retailers are seeing consumers purchase products such as chocolate and flowers all the way up to expensive jewelry, full furniture sets and luxury clothing.
Consumer mindsets and expectations are that they should now be able to purchase anything on a mobile device that they can on the computer or in a store.
As long as the retailer’s mobile site and rich app provide an elegant yet easy to use experience where they can search browse and buy in as little as 60 seconds, the retailer has the opportunity to engage with their customers 24/7 from anywhere in the world.
Has the checkout process become easier?
A mobile Web site and rich apps are now designed to move the consumer from the homepage through checkout in as little as 60 seconds.
Retailers should include all checkout options they offer on their ecommerce site on their mobile site, such as credit cards and gift cards, and support both guest and account-holder checkouts so frequent shoppers can purchase with just a few clicks.
In addition, it is important for retailers to partner with a mobile commerce provider that supports PayPal Mobile Express Checkout as it enables a “one-click” checkout for shoppers.
As mobile payments continue to evolve into the retail store, it is important for retailers and the mobile provider to work together to ensure in-store checkout can be enabled with the retailer’s branded rich app.
Are you seeing a direct link between mobile advertising and mobile commerce?
Yes, we see a direct link between search engine marketing and mobile commerce.
One of the most common means of discovery for retailers on their mobile Web site is through Google search.
This is why it is important for retailers to have a mobile-optimized site with deep linking enabled so that when a specific product or promotion is marketed through search engines, emails, SMS and online and is viewed by the consumer on a smartphone, it should directly link to a mobile-optimized site or mobile page where that specific product is located to maximize the chance for consumer action to drive sales.
There’s a flurry of activity among IT giants such as IBM and Oracle, as well as established ecommerce software platforms to add or integrate with mobile commerce services. How has that shaped the market for independent mobile commerce platforms such as Digby?
There has been a significant amount of activity around mobile and retail and the larger industry players are quickly realizing that mobile is much more than an extension of an ecommerce site.
Mobile is inherently more complex based on ever-changing mobile device types, operating systems and feature sets that must fulfill the unique use cases that are only appropriate for mobile.
Many of the top ecommerce players are now realizing that 100 percent dedication is needed to stay on the forefront of mobile so they are working with Digby to leverage our deep knowledge and retail-focused mobile platform rather than try to develop one on their own.
We work with most ecommerce providers and some even resell our service such as Venda and AT&T.
We feel that mobile will move farther and farther away from the capabilities of an ecommerce site and will truly enable cross channel engagement.
What needs to happen this year to convince more retailers to launch mobile commerce operations?
There are two forces that will drive mobile commerce investment.
First, more retailers will invest in mobile as they gain a deeper understanding of their customers’ mobile shopping behavior and, secondly, they will adopt a broader strategy that integrates shopper engagement in-store.
There is value in commerce, but when paired with the ability to affect in-store conversion, mobile becomes extremely attractive from an ROI perspective, driving sales, loyalty and analytics to help learn and serve their customers better.
When we share our strategic vision of mobile to retailers, they quickly realize the time to move is now.
Your guess for mobile commerce this holiday season?
Mobile shopping, whether it is purchases made directly from the phone or mobile engagements through the smartphone to assist with purchases in the store, will be huge this holiday season.
Having a mobile-optimized Web site and rich apps for the iPhone, Android or BlackBerry are a must-have for retailers this year.
Shopping from a mobile device is quick, easy and convenient and with busy holiday schedules, consumers expect their favorite retail brands to offer a great mobile shopping experience available from their smartphones, whether they are at home, on the go or in the retail store.
With Nielsen predicting that one in two Americans will own a smartphone by the end of 2011 and 41 percent of smartphone owners already reporting making purchases from their mobile phones, there is little doubt that mobile commerce this holiday season will be huge.
Mickey Alam Khan is editor in chief of Mobile Commerce Daily and Mobile Marketer. Reach him at firstname.lastname@example.org.
This interview first appeared on Mobile Commerce Daily on August 26, 2011