In its second-largest acquisition, Amazon buys the company for $970 million.
As more Top 500 retailers jump in, mobile comerce is evolving - and not always along the path blazed by e-commerce.
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.