May 27, 2010 01:55 PM
2009 was a breakout year for mobile commerce. Dozens more retailers threw their hats in the ring, by December bringing the total number of merchants in m-commerce to around 120. Since then it's been a steady clip of six a month for a total today of 150.And in late 2009, eBay Inc. became the first merchant to break out sales for its mobile channel: $600 million for the year, which, if the channel were an e-retailer unto itself, would place it at No. 34 in the Internet Retailer Top 500 Guide. Jaws dropped and m-commerce was given higher priority.
Among the retailers deciding that the time for mobile was now were several in the Top 500 Guide. In fact, in 2009 there was a whopping 56% growth in the number of Top 500 e-retailers with mobile commerce sites, up to 53 from 34 in 2008, according to research from the 2010 Internet Retailer Top 500 Guide. There are in total 76 Top 500 e-retailers in m-commerce, including 23 that offer apps that work on specific smartphones but not mobile sites that any web-enabled phone can access.
"2009 delivered dozens more retailers into mobile commerce, and the net effect of the increase in the number of mobile-optimized retail sites was consumers becoming much more comfortable using mobile user interfaces and making purchases on their mobile devices," says Kevin Ranford, director of web marketing at 1-800-Flowers.com Inc., which launched its m-commerce site, 1800Flowers.mobi, five years ago and has since launched mobile apps and a text message program. "Consumer adoption is here, shoppers are transacting via mobile en masse, and all boats are rising."
The newly published Top 500 Guide research demonstrates there is some consensus on the features and functions most important for an m-commerce site. But, because the form factor of the mobile phone imposes limits on how much a mobile site can offer, some retailers are omitting popular features in order to focus on the elements most crucial to their strategies. The research also shows there is room for improvement in mobile site performance, leaving open the possibility of a bad first impression, dangerous in the mobile realm.
Additionally, the research shows that mobile is being adopted by very large and rather small online retailers, with fewer in the middle making mobile a priority. Among the Top 500 retailers getting into mobile, most are big. Of the 53 with mobile sites, 33 are in the top 100 and 48 in the top 300.
But quite a few retailers that didn't meet the $10 million threshold for making this year's Top 500 list are moving into mobile commerce. In fact, half of the 150 retailers with mobile sites or apps are not big enough to make it into the Top 500 Guide.
Regardless of size, Top 500 retailers with mobile sites clearly believe that certain features and functions from the e-commerce world should be present in m-commerce. Among those retailers 92.9% display product images on their mobile sites, 82.1% showcase featured products, 80.4% offer keyword search and 76.8% let consumers make a purchase.
Other features and functions do not have such broad adoption. 50.0% of Top 500 retailers with m-commerce sites offer image zoom; 46.4% have a store locator; and 37.5% feature customer reviews.
When retailers leave out common functions, there's a reason. Take keyword search, which enables customers to get to a product of their choosing quickly from a prominent mobile site search box on the home page.
Some retailers have focused on featuring their most popular products on their mobile sites in place of site search. Take the case of 1-800-Flowers.com, which is No. 40 in the Top 500 Guide and uses m-commerce technology from Digby. The merchant doesn't currently offer keyword search because, it says, it knows based on extensive customer data what customers like mostÑa dozen red roses, for exampleÑand can funnel them quickly to checkout with little data input or the requirement to review search results.
"It's on our roadmap," Ranford says of keyword search, "but there's been a lot of other cool functionality like managing the loyalty points program that we believe is more valuable and subsequently gave higher priorityÑmobile lends itself to repeat purchasers, and thus to highly loyal customers who are into the loyalty plan. There's so many great projects you can do with mobile that you have to pick your targets and get them done so you can move on to the next thing."
But most retailers will want to include a search box on their mobile sites, says Mark Beccue, senior analyst, consumer mobility, at research and consulting firm ABI Research.
"Keyword search is really important in mobile commerce," he says. "Mobile web sites do not offer the full user experience you will get online, and they never will. What you want in mobile is to streamline things as much as possible, require the least amount of clicks as possible to get consumers to what they need."
Time to buy
Once a shopper has found a product, it's time to buy, right? Not on 23.2% of the m-commerce sites of Top 500 e-retailers. This might seem like a glaring omission by some, but it depends on what a merchant is trying to accomplish in the mobile channel.
K&L Wine Merchants does not offer mobile customers the ability to make a purchase directly on its mobile site, although it redirects smartphone users from the mobile site to the standard e-commerce site. Closing sales is not the mobile site's reason for being. The site, m.KLWines.com, is designed to be a reference tool for customers wherever they may be, including at a restaurant or in a K&L bricks-and-mortar store.
Being able to have a treasure trove of information from connoisseurs when out and about bonds customers closer to the brand; having access to the same information in-store puts the power of the e-commerce site in the customer's hands, says Brian Zucker, co-owner of K&L Wine Merchants, No. 372 in the Top 500 Guide.
"A lot of people use mobile to browse," he says, "and the research we have seen and done shows people are more apt to browse and learn on the mobile site and transact over the phoneÑfor example, by a click-to-call function on the mobile site, which we haveÑor by doing it later on their PC."
But most mobile merchants want customers to be able to make a purchase without leaving the m-commerce site, and they include that functionality.
"Why miss the opportunity," says Beccue of ABI Research. "If you have the eyeballs of a customer and you're not taking advantage of that chance to sell them something, then you're missing an opportunity. You should be trying to close a sale."
A feature that helps close sales in e-commerce is customer ratings and reviews. 65% of retailers in the 2010 edition of the Internet Retailer Top 500 Guide offer customer reviews on their e-commerce sitesÑtwo-thirds is a big thumbs-up for a technology that continues to grow in popularity among retailers and consumers alike. However, only 37.5% of retailers with mobile commerce sites offer customer reviews.
Is there a fundamental difference between e-commerce shopping and m-commerce shopping that explains this difference? Not in the case of customer reviews, say Top 500 e-retailers and industry experts. It's simply a matter of prioritization in a burgeoning field that's evolving at a rapid pace.
"We really value that content and plan to push it out," says Zucker of K&L Wine, which uses m-commerce technology from Unbound Commerce tied closely to e-commerce technology from Endeca Technologies Inc. "It's important for a mobile site like ours, where we don't have the full transaction capability and instead use it as a means of displaying the inventory and giving people a means of researching products and learning all they can."
And customer reviews on an m-commerce site can help shoppers learn more while they're standing in a store, a fact more retailers are catching on to, says Brian Deagan, co-founder and CEO of Knotice Ltd., a direct digital marketing firm that includes mobile marketing in its offerings.
"Technically speaking it's simply getting the ratings and reviews information from the e-commerce site and placing it into a format and presentation that works for the different mobile form factor," Deagan says. "We've been focusing a lot of effort on mobile customer reviews this year because that's what our customers have been asking for."
Room for improvement
While customer reviews can help close a sale, one all-important factor sure to affect whether a shopper completes a purchase on an m-commerce site is performance. Regardless of the differences in connectivity, such as the obvious hard-wired versus wireless, consumers tend to have the same expectations of mobile sites as they have of e-commerce sites. They want m-commerce sites to be available and load pages speedily, and do so in a consistent manner.
5.7% of the m-commerce sites belonging to Top 500 e-retailers rated excellent in performance, as gauged by web and mobile web performance measurement firm Gomez, part of Compuware Corp. 48.6% earned a good and 45.7% fair. None of the sites rated poor.
The average mobile retail site outperforms those in other industries, coming in at around 4 seconds in response time with good consistency overall. The average mobile airline site is slower by comparison at about 4.25 seconds to download but with good consistency. The average mobile banking site takes more than 5 seconds to load with only fair consistency.
"Only a minority of retailers are delivering consistently excellent experiences. These top performers understand that mobile experiences can vary by carrier, by geography and by time of day, and they've taken important steps to streamline their mobile sites and infrastructure," says Matthew Poepsel, vice president of performance at Gomez. "The majority of mobile retail sites fall into the middle of the mobile retail pack, reflecting 'lumpy' experiences that likely underwhelm mobile shoppers on occasion. Retailers seeing inconsistent performance should examine their sites from the ground up, verifying designs are functional but lightweight and infrastructure is robust enough to meet the expectations of the demanding mobile shopper."
Retailers in m-commerce must keep a sharp eye on that demanding mobile shopper. They have to craft a shrewd strategy, and ensure they have the right blend of features and functions to help close a sale. Merchants that provide a satisfying customer experience designed especially for the mobile channel that performs well will be poised to reap rewards as consumers make a growing share of their retail purchases via the mobile phone.