In its second-largest acquisition, Amazon buys the company for $970 million.
As early mobile merchants redesign, newbies test mobile sites and apps.
Most retailers that have identified mobile commerce as a strategic priority are today focused on building an m-commerce site or maintaining and learning from a site they've built in the past year or two. Some retailers, however, are taking things up a notch: They're not designing m-commerce sites, they're already redesigning sites. And in the process they're adding the latest technologies, like two-dimensional bar code scanning, to their efforts.
The Catholic Company launched its m-commerce site in March 2010. A lot has changed in the mobile realm since then, especially smartphone capabilities and mobile web browser functionality. The religious goods merchant came to appreciate the evolution of mobile technology and what it meant to its m-commerce site and decided it had to upgrade the site to keep pace with the times.
"Last year mobile was doing really well, but this year it has slowed a bit, and we attributed that to a design matter," says Nicholas Cole, director of marketing at The Catholic Company.
When it designed the site in early 2010, all smartphone web browsers only operated in portrait mode, which means the display is longer vertically than horizontally. Unlike with many smartphone apps, the browser would not change the web page on-screen to landscape mode when the user turned her smartphone to a horizontal position. That changed last year, and now most smartphones can browse the web in landscape mode, which significantly alters the size of text and images on the screen.
"In landscape view, the way our site was designed the text became very small and very hard to read, so we felt people were getting a bad experience. That experience was translating into weak sales," Cole explains. "So we updated the style sheets to function better in landscape, as well as with higher-resolution screens that have been entering the market. Now fonts and images in landscape mode appear bigger in a better fashion."
One of the biggest changes in mobile commerce has been in the market itself: More retailers, catalogers and consumer brand manufacturers are reaping rewards. M-commerce sales hit $2.9 billion in 2010 and are expected to jump to $5.3 billion this year, according to investment bank Barclays Capital. Merchants realize that more consumers are buying smartphones and using them to access the web and engage with mobile apps. More shopping inevitably will follow.
"Mobile commerce is a must-have," says Julie A. Ask, vice president and principal analyst at Forrester Research Inc. "The number of people using their phones to do research and make purchases has grown dramatically in the last year. M-commerce sales are in the billions, and the dollars that mobile will influence will be three times that or more. I don't see how you stay out of that game."
Cole stresses the urgent need for merchants to get into m-commerce. It's growing fast at The Catholic Company—mobile sales are ahead of target for the year to date.
"Last year was the time to get started," he says. "People are waiting for trends to emerge, but things are moving so quickly. Retailers need to get a fully functional m-commerce site up as quickly as they can. Traffic no doubt is coming from mobile devices and these people expect a mobile-optimized site, so you've got to give it to them."
Most retailers begin in m-commerce with a site. An m-commerce site can be accessed on any smartphone and on many feature phones—the predecessors to smartphones. Thus, sites provide the greatest reach. But then there are mobile apps, which can provide much richer experiences than sites and make full use of the innate features and functions of a smartphone. But an app only provides access to a slice of the pie; for example, an iPhone app can only be used by iPhone users, not all smartphone users.
But smartphone users love apps. And when done well, which includes offering some cool and crafty features, apps can keep consumers coming back for more.
"If I'm targeting people over 55, mobile will be less relevant. If I'm targeting age 13 and 14, they will have a lower-end device not capable of downloading apps," Forrester Research's Ask explains. "But for the very lucrative Gen Y and Gen X, and even into the Boomers, an app is a better experience than the web. The apps are the ones that do all the cool things. They scan bar codes, they scan QR codes, they let me bump my phone with my friend's phone and give them money. That's the fun stuff that consumers get excited about."
However, some mobile experts suggest while a mobile app may be good for some retailers, others need not devote the time and resources necessary to create one.
"If you're a big enough brand it can make sense, but it's not like you have to do it," says Neil Strother, practice director at ABI Research. "If you decide to do it, you should also simultaneously have a really good mobile web site experience. If you do one thing you should do an optimized web site. A mobile app is not a simple thing. It's a lot more expensive in people and dollars than you think."
The ubiquity of texts
In addition to sites and apps, retailers should consider another m-commerce tool: text messaging. Text messaging is an inexpensive way to reach consumers with any kind of mobile phone in a way that is immediate and time-sensitive.
"Text messaging is a really good way to say, "I have a new sale this week' or "Come in for this discount.' It's a good way to stimulate your mobile consumers," Strother says. "You have to do the heavy lifting of capturing the mobile phone numbers." That's required in order for a retailer to text customers.