The total value of Alibaba shares sold as part of the IPO reached $25 billion after underwriters exercised their options, making it the largest ...
(Page 2 of 4)
Apps typically are faster and often can do more because the software, much of the design and some of the content reside on the phone itself, minimizing calls to the retailer’s web server for information that changes.
Recognizing the growing demand for mobile sites and apps, vendors have stepped forward with technology that lets retailers join the mobile game. So far, m-commerce is something rarely done in-house, and the cost of entering m-commerce via a vendor’s technology is relatively small.
$20 to $200,000
Retailers, for example, can pay mPoria Inc. as little as $20 a month for a basic, software-as-a-service site with a limited number of products. Far richer, more robust sites from vendors including CardinalCommerce Corp., Digby, Unbound Commerce and Usablenet Inc. can run from $20,000 to $200,000.
“The question today is, if you’re an e-retailer, why wouldn’t you do this?” says Mark Beccue, senior analyst, consumer mobility, at ABI Research. “The cost of creating a mobile site is so minimal. Even more minimal when you compare that cost to the benefits-incremental sales, increased market share and being top of mind among consumers.”
Besides making it relatively inexpensive to get started, vendors can help overcome technical hurdles, such as designing mobile sites and apps that work on many phones, each of which may render a display differently. About nine out of 10 retailers in mobile use vendors, and those vendors manage enormous databases of device types that do the work for the retailers. Or, the retailers, with or without a vendor, build sites for a handful of device types, or sites so basic they can easily be rendered on any device.
Whether handled through a vendor or in-house, responsibility for m-commerce typically resides within some combination of the e-commerce, marketing, merchandising and I.T. departments. Staff members in each of these departments must learn some new skills, primarily, understanding what a mobile shopper is trying to accomplish and how he’s trying to accomplish it compared with a web shopper. Marketing staff, for example, may realize efforts need to focus on the speed with which a customer can buy or on a specific product category as opposed to special promotions.
Basic skills needed for mobile commerce are roughly similar to those required in e-commerce, Ranford explains. But there are whole new sets of skills required, such as ones for developing text message marketing and mobile apps, that I.T. and other departments must research in-house or in conjunction with vendors, he adds.
Retailers are learning fast what works when it comes to selling through the mobile phone. Lessons learned include ones in site and app design, marketing protocol, and how to tie the mobile phone into store and web sales.
When SkyMall Inc. began developing its iPhone app this summer, it looked to other m-commerce apps, taking note of what seemed to work and, what it found to be most important, designs it felt did not.
As a result, the SkyMall mobile app, launched in September, opens to Featured Products, where shoppers can slide from left to right and back-without changing pages-to view five products the retailer chooses to highlight. A box below enables shopping by department, and buttons below that enable search and access to a gift finder and the shopping cart.
“From a merchandising perspective, we felt it was important to open with big presentations of select featured products. And it differentiates us from other shopping apps,” says Jay Scannell, vice president of information technology at SkyMall. “If you open up other shopping apps, you are finding out what to do and what you can do as you go along. We wanted to make sure that right away people got it that this is about products and shopping and completing your order.”
Early response to the app and its design is encouraging, Scannell says.
“Customers are engaged like we hoped, very quickly getting into the shopping process,” he says. “It’s fairly clear it’s because we give them the products and easy navigation up front instead of starting with a promo page or marketing message. And since we released our third quarter and holiday catalog app updates with fresh new content, customers have been opting to make the updates. To see customers take a moment and elect to download these updates shows they are engaged and is really encouraging.”
1-800-Flowers.com also has learned a lot about mobile merchandising. It found over time that the fewer products it offered on mobile, the higher the conversion. Fewer items on offer meant fewer mobile consumers getting lost or frustrated amidst an overwhelming product assortment on a small screen.
“It’s a learning that continues to prove itself out,” says Ranford of 1-800-Flowers.com. “We’ve really rallied around top products from what we see on overall web sales reports. We trim down the selection to what is the most digestible amount of products so the mobile shopper doesn’t have to scroll through more products than they necessarily need. This is a unique channel and requires different thinking in merchandising. Whenever we expand a product category online, we have to constantly be trimming it down for mobile.”
Mobile as marketing
While 1-800-Flowers.com and SkyMall have learned about design and merchandising, Moosejaw Mountaineering, one of the earliest pioneers of m-commerce, has learned through experience that mobile can be an effective marketing tool.
One of the retailer’s two mobile sites, m.Moosejaw.com, enables shoppers to access the entire catalog and showcases on the home page the latest products, special mobile promotions, buttons for signing up for text messages and e-mails, and a link to Moosejaw Madness, an entertainment area featuring intentionally inane humor. For example, one game lets shoppers throw lunchmeat at a butcher shop window.
“We’re translating our brand into a compelling mobile experience we use to deepen our interaction with the Moosejaw community,” says Harvey Kanter, president and CEO.