In its second-largest acquisition, Amazon buys the company for $970 million.
A new study shows more work ahead on sites, smartphone apps and tablet apps.
Web-only retailers, retail chains and consumer brand manufacturers with e-commerce sites will be significantly investing in mobile commerce this year, a new study finds, advancing the retail channel that is inextricably weaving itself into the fabric of e-commerce.
Web-only retailers this year will invest an average of $37,750 on m-commerce sites, smartphone apps and/or text messaging programs, retail chains $343,068 and consumer brand manufacturers $135,250, finds “The State of Retailing Online 2011,” a March Shop.org study of 68 merchants conducted by Forrester Research Inc. Shop.org is the online retail division of the National Retail Federation.
And merchants are beginning to embrace the white-hot phenomenon that is the tablet computer. Web-only retailers in 2011 will spend on average $10,278 on tablet site optimization or apps, retail chains $185,625 and consumer brand manufacturers $190,625.
Generally speaking, merchants do not need to invest much to jump into m-commerce when compared with e-commerce technology. M-commerce systems can ride on top of existing back-end e-commerce systems, keeping the cost of entry relatively low.
The wide variance in investment among merchant types might be attributed to the features and functions the merchants choose to offer through their m-commerce sites and apps. For example, a retail chain is likely to include a location-based service in its smartphone app to drive shoppers into physical stores, while a web-only retailer would have no use for such services. Study author and Forrester Research analyst Sucharita Mulpuru notes that the sample size is small, “so the variance doesn’t bother me that much.”
On average, 4% of total web traffic for e-retailers surveyed stems from smartphones and tablets, and the devices generate 2% of total e-commerce sales, the study finds.
When it comes to the type of mobile presence, 48% of merchants of all types have a mobile-optimized web site, 35% offer an iPhone app, 15% an iPad app, 15% an Android app, 6% a BlackBerry app, and 13% engage in text message marketing, according to the study. 44% report no mobile commerce presence.
The average cost for an iPhone app is $48,646 and for an iPad app $28,567. But the study finds that retailers are not fully differentiating between apps for the two very different devices.
“In spite of very different experiences that have the ability to serve shoppers in different states, retailers appear to want both devices to achieve all objectives to equal degree, versus defining distinct objectives that leverage the advantages of each,” the report says. “Whereas smartphones are best for real-time offers that supplement in-store experiences, tablets are able to enrich the brand experience in a consumer’s home, often substituting time away from a PC or laptop.”
Retailers offer various features and functions on their m-commerce sites, smartphone apps and tablet apps. The study finds: 42% offer store information while 26% plan to offer it; 34% showcase customer ratings and reviews while 50% plan to; 21% deliver alerts for specials or sales while 44% plan to; 21% enable consumers to scan a two-dimensional bar code while 28% plan to; 18% allow consumers to store a shopping list while 18% plan to; and 15% offer price comparison information while 12% plan to.
Responsibility for mobile commerce within a retail organization typically belongs to the web/e-commerce team, the study finds. 42% of merchants in the study report this team leads mobile efforts. 24% say the marketing department, 18% report to the president or other division head, 7% say other, and 9% say a clear authority has yet to be established. 44% of merchants have one or more employees dedicated solely to m-commerce efforts.