December 31, 2007, 12:00 AM

Merchant Beware

A handful of m-commerce sites and services are employing a strategy that encourages shoppers to access mobile offerings while in stores.

After college students compile a list of textbooks they’ll need for the coming semester, they head to the campus bookstore. Web-only retailer AbeBooks Inc. carries a wide range of textbooks and wanted to step into that mass migration to convince students it had better prices and persuade them to buy at AbeBooks.com.

AbeBooks decided to reach this youth market where it lives and breathes-text messaging. Late last summer it launched a test program that enabled college students browsing in bookstores to text message the e-retailer with a textbook’s International Standard Book Number. Students received a reply text message containing AbeBooks’ lowest price for new copies of their textbooks.

If a student decided to buy the book, he replied by typing “fwd” and his e-mail address. The e-retailer then replied to the e-mail address with a link to the AbeBooks.com page where the book is listed for sale. The student then could buy it later via his PC.

While AbeBooks characterizes the program as a test and won’t say what kind of response it achieved, it was a test that puts AbeBooks at the forefront of how consumers shop. “As an online business, we have to watch the mobile channel,” says Thomas Nicol, director of marketing. “The importance of this channel will increase.”

Going mobile in stores

M-commerce sites and services are popping up, and many e-retailers and other e-commerce players such as comparison shopping sites are keeping a watchful eye. A new development among these sites and services bears particular scrutiny: A handful of companies are employing a strategy that encourages shoppers to access mobile offerings while the shoppers are in stores.

This isn’t mobile commerce where a husband orders flowers for his wife while commuting on a train, or a film junkie adds a selection to his online DVD rental queue after receiving a recommendation from a pal at a party. This is a calculated move to drive shoppers from one merchant to another, and it’s focusing on price comparison.

E-retailers like AbeBooks and BikeSomeWhere.com are urging shoppers to use their mobile offerings while in competitors’ stores to judge which merchant has the better price. And Google Text, mShopper, PriceGrabber, ShopLocal and Slifter offer mobile sites or services designed to help shoppers compare products and prices to decide whether they should buy at the store they’re in at the moment, shop online or go to another store.

Considering mobile phone capabilities, the potential for use of text messaging services and mobile sites is vast. 243 million citizens, or 80% of the U.S. population of 303.6 million, have mobile phones. Of mobile phone users, 200 million, or 82%, operate phones with text messaging capabilities, and 174 million, or 72%, have phones capable of browsing the web, according to CTIA-The Wireless Association.

Thus, 57% of the entire U.S. population can browse the Internet on their mobile phones. However, only 35% of mobile phone users actually send and receive text messages, and only 11% browse the web from their mobile phones, according to Forrester Research Inc.

The first to adopt mobile data services were businesspeople, followed quickly by teenagers and young adults; these are the early adopters of m-commerce sites and services, says Nikki Baird, managing partner at Retail Systems Research LLC. “But just because you build it, doesn’t mean they’ll come,” she adds. “You have to make consumers aware. It’s all about getting people to try something new in the hope they’ll come back for more.”

Baird cautions e-retailers considering mobile options and whether consumers are using mobile devices in stores to be certain the time is right. “The question most companies looking into mobile are struggling with now is: Is it still too early, or just early?” she says. “It’s OK to be early, because you want to jump on the learning curve of how consumers are going to use this technology, but you don’t want to be so early that you get skewed data about users: early adopters differ from mainstream users.”

Testing the waters

AbeBooks recognizes the potential of m-commerce, which is why it conducted its experiment. To promote the test program, it sent employees to 30 college campuses to get students out of bookstores and onto AbeBooks.com. It also wrote about the text-based service in its e-newsletter for students and on its web site.

The text message program worked with most mobile phone carriers; each carrier’s standard text messaging fees applied. AbeBooks hired mobile technology company Cnition, which used AbeBooks’ application program interface to build a program that enabled text messages to query the e-retailer’s database. Total costs for the test hit about $1,000 a month.

E-retailer BikeSomeWhere.com decided to dive into m-commerce, choosing not text messaging but a mobile version of its standard site. Like AbeBooks, the bicycle e-retailer is using its mobile offering to lure shoppers away from competitors’ stores. It built its m-commerce site-launched in April 2007-which enables shoppers to not just obtain product and pricing information but also buy bicycles and gear via their phones. The site today is averaging a few hundred visitors a week.

“We tell our customers when you are in your local bike shop, look us up, look at the same product, and nine times out of 10 we’ll have a better price. Products will show up at your door, you do not have to pay sales tax, and we offer free shipping for orders over $75,” says Jeff Stone, president. “Even if shoppers do not place an order on the mobile site at that moment, they can use the site as a tool to make a decision and then call us or order it online later.”

BikeSomeWhere.com paid $500 to vendor mPoria Inc. to create the mobile site and pays $100 to $150 a month for ongoing services. The e-retailer has spread the word about its mobile site through five e-mail marketing campaigns to customers.

It also advertises the mobile store on its home page and all sales receipts. Further, it has purchased ads associated with keyword search terms through Google AdWords. It selected generic keywords such as bicycle and bike because it is trying to get mobile searchers to its home page as opposed to individual product pages, Stone explains.

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