Are retailers missing a trick with M-Commerce?

Both these retailers are performing incredibly well at the moment and you can’t help but make the link between their readiness to accept the diversity of channels out there for shoppers and their brilliant profits. A recent Webloyalty Online report from Verdict Research suggests that m-commerce is poised to completely transform the way in which the high street operates. Predicting, that over the next five years, more than 80% of shoppers will be using their mobiles to shop and that a shopping expedition to the high street will not be possible without a Smartphone.

Mobile Mentality

A recent survey commissioned by Tealeaf and conducted by Harris Interactive revealed that a staggering 10 million people across the UK are using mobile commerce and a Comscore report for mobile media usage in 2010 revealed that 16,620 people in the UK alone are Smartphone subscribers – that’s approximately 26%. These guys also predict that these figures are set to increase over the next 12months, with worldwide Smartphone usage increasing by 57% during 2011.

So bearing these figures in mind, the results of a recent piece of research with retail marketing and IT directors by Vanson Bourne for app developer Kony, will come as a bit of a surprise. Bizarrely only 16% had a mobile strategy in place and a further 28% had no plans to even consider one. BUT 42% of the retailers believed that mobile commerce was already having an impact on shopper behaviour. That doesn’t really stack up.  Why would a retailer recognise that m-commerce was impacting significantly on their marketplace but choose not to address the issue?

In this day and age of mass media consumption this seems rather blinkered to me – that’s a LOT of potential customers that the 28% are not even considering. So why are they not taking the bull by the horns when the evidence is there to suggest that opportunities to reach consumers with digital media and advertising are continuing to grow?

Diversity is a good thing?

Poor retailers, the path to mobile domination is not an easy one. It is fraught with significant financial investment and a series of difficult choices.

Probably the main reason for some retailer’s reluctance to take the plunge is the proliferation of devices out there on the market. David Eads, head of product marketing at Kony, said “The discrepancy between what retailers know they should do, and what they are actually doing, demonstrates how difficult it is to deliver mobile applications across the wide variety of phones, tablets, and browsers.”

To be fair, they are faced with more than 60 different browser versions across mobile handsets from over a dozen providers, and that is before you add in the app versus mobile internet question. According to Vanson Bourne retailers are divided between the benefits of apps and the mobile internet, with 45% preferring apps and 40% preferring the mobile internet. (74%) of retailers they talked to were developing their mobile strategy around the iPhone, but what about all those potential shoppers who don’t have an iPhone but have a Blackberry or an Android phone?

This is the ultimate conundrum – what do you do? Plump for a series of apps for every browser going or invest in one alienating potential customers on others? Add into the mix the fact that mobile is changing and developing constantly (think about the phenomenon of the iPad and tablets during the last 12 months) and you could very quickly end up with a black hole for money and no ROI. See the problem?

Great Expectations

This issue is further exacerbated by our expectations. As Smartphone adoption grows, we expect a faultless experience across all online channels, including mobile. We are increasingly becoming used to being able to access anything anywhere and are easily frustrated when we can’t. iPhones and iPads have contributed to these high expectations with usability that is intuitive. Most apps or mobile sites (or standard sites on mobile screen) haven’t been developed by Apple and haven’t been designed with a mobile user in mind. This can cause countless issues from difficulties browsing, searching and purchasing when a ‘mobile’ store hasn’t been designed specifically for that mobile user.

This isn’t just an issue for m-commerce; shoppers have very high expectations of ecommerce in general and are no longer differentiating between the experiences they receive on different devices.

According to Tealeaf’s research customers perceive ‘online’ as one platform – rather than m-commerce being a separate entity to e-commerce. They expect the same level of sophistication across any platform and just over half of the research’s respondents (51%) said they would expect a better experience on a mobile device than instore and 52% said they would expect a better experience than when using a desktop computer!

That’s some pretty high expectations to meet when ecommerce is only just stepping up its game let alone for m-commerce which is still in its infancy.

Frustrating and difficult m-commerce experiences on a mobile device can drive consumers away from doing business with a company entirely. The negative impact of this to retailers cannot be underestimated. Over half (66%) of online adults surveyed said they would be less likely to buy from the same company via other purchase channels if they experienced a problem conducting a transaction on their mobile phones. Even more perturbing, nearly one in ten shoppers said if they had problems using m-commerce they would never to conduct a mobile transaction again.

Geoff Galat, CMO of Tealeaf said “at present mobile consumers find the convenience of transacting anywhere is offset by unsatisfying and unproductive experiences. Mobile consumers are no more willing to tolerate poor experiences than customers accessing websites.”

Changing the face of Retail

So retailer’s reluctance to take the plunge into m-commerce seems to be driven by the fact that although it is relatively recent, our expectations as shoppers are high due to user friendly mobile technology. Unfortunately retailers haven’t kept pace with these advancements and now for some the gulf may seem cavernous.

However, in the words of research company, Forrester, “the mobile internet era isn’t around the bend but already here.” The evidence suggests that retailers limiting themselves by not embracing m-commerce will find that their customers will go elsewhere. Some retailers are investing significantly in this channel to win those shoppers and they are reaping the rewards. M-commerce is a way to get ahead of the competition and as technology continues to develop – as it surely will – those who don’t sit up and pay attention may find themselves left behind.

I’ll leave you with a look into the future and some words of wisdom from Verdict Research’s Neil Saunders:

“The next step will be the use of mobile phones as part of the shopping experience. Soon, consumers won’t think about hitting the high street without their Smartphone. It will be absolutely essential – not only to browse, but for how we pay, locate products and find the best deals and discounts. Shoppers after a better deal will use their mobile to compare and find prices,” he continues. “Retailers that survive on the high street will be those that combine their online stores with mobile apps that offer shoppers a better deal using location-based offers.”

If you’re looking to take the plunge into m-commerce get more information on our website http://www.wmps.com/mobile-ipad