The move follows similar programs from Target and Amazon.
Amazon conquers the mobile universe
The top e-retailer is No. 1 in Internet Retailer's first ranking of 300 mobile merchants, who combined will rack up $5.37 billion in 2011 m-commerce sales.
Managing Editor, Mobile Commerce
Topics: Amazon, Amazon.com, Amazon.com Inc., Buy.com, buy.com inc., Crutchfield, Crutchfield Corp., Fandango, JetBlue Airways, m-commerce, m-commerce site, Mobile, mobile app, mobile commerce, mobile sales, smartphone, Staples, Staples Inc.
In 1999, when other retailers barely had e-commerce sites up and running, Amazon.com Inc. invented m-commerce with the launch of its mobile commerce web site. In 2008, while other retailers were just beginning to experiment with m-commerce sites, Amazon unveiled the first of 10 smartphone apps. The same year, while text messaging wasn't even on the map for most retailers, Amazon enabled consumers to shop and purchase products entirely via text message. And in 2010, while other retailers were launching or fine-tuning smartphone apps, Amazon introduced the first of its multiple iPad apps.
Amazon.com has been the leader in m-commerce. As with other Internet retailing strategies and technologies, Amazon saw a gold mine where others weren't even looking, staked its claim early, and took a commanding lead over competitors.
"Amazon has always been aggressive in being there first," says Nikki Baird, managing partner at Retail Systems Research LLC. "It was the pioneer in ratings and reviews, cross-sells and up-sells, product recommendations. Amazon has always been at the forefront of new capabilities in e-commerce and now they're doing the same in m-commerce."
Leader of the pack
In 2011 Amazon.com will hit $2 billion in sales through smartphones and tablets worldwide; that's up 100% from $1 billion in 2010, according to Internet Retailer's new industry guide, The Mobile Commerce Top 300. That puts Amazon at No. 1.
Its closest competitor is Apple Inc., which will reach m-commerce sales of $933.8 million in 2011, up 25% from $747.0 million in 2010, The Mobile Commerce Top 300 reveals. The Apple figures are primarily iTunes and do not include the app store, which is a marketplace where many sellers offer their wares, akin to eBay Inc.'s web and mobile properties.
The Mobile Commerce Top 300 documents for the first time the extent to which mobile selling has gelled. Retailers such as Staples Inc. (No. 13), Buy.com Inc. (No. 19) and Crutchfield Corp. (No. 108), travel companies such as JetBlue Airways (No. 78), and ticket sellers such as Fandango (No. 30), are reaping millions in sales via smartphones and tablets. Not convinced mobile is mainstream? Consider that Fandango predicts that by the end of this year one of every four tickets it sells will be purchased on a mobile device.
The early m-commerce leaders have learned to keep things as simple and streamlined as possible. They know the features and functions of mobile sites and apps that help clinch sales, whether those sales are on a mobile device or in a store, where mobile devices are the ultimate shopping research tool. And they're taking the latest mobile device, the tablet, head on, heeding the increased traffic stemming from these popular new machines.
The 300 retailers, travel companies and ticket sellers together will rack up $5.37 billion in m-commerce sales in 2011, up 105% from $2.62 billion in 2010, according to the Mobile Commerce Top 300. With its predicted $2 billion in 2011 sales, Amazon.com has sewn up 37% of the market.
Amazon says the keys to its success are simplicity and speed.
"If you think about someone in a physical environment trying to buy something on their phone, typically they are multitasking with divided attention," says Sam Hall, director of Amazon Mobile. "I might be in a line at Starbucks and distracted with the line or an e-mail I'm following. We need to make it really easy and fast for customers to find what they want, so we've focused a lot on minimizing input—bar code scanning, search suggestions, voice input—so customers can go from 'I want that' to 'I bought that' in under 30 seconds."
The eBay selling machine
While Amazon.com is No. 1 in The Mobile Commerce Top 300, it is not the company that moves the most merchandise via mobile devices. That honor belongs to eBay. EBay is not ranked in The Mobile Commerce Top 300 because the sales are made by other merchants, not eBay itself.
EBay reported $2 billion in mobile merchandise sales in 2010 and projects $4 billion in 2011, double that of Amazon.com. But eBay only gets a fraction of those sales in commissions. Industry experts say of the $4 billion eBay will sell via mobile this year, $1 billion will be from eBay Motors, where it typically takes about a 1% cut of every purchase, and the other $3 billion will be from merchandise, where an average take is 12%. That would mean that eBay in 2011 will make $370 million in mobile revenue.
Those are global numbers for both eBay and Amazon. EBay reports in general that its sales split around 50/50 worldwide versus U.S. So that would put its 2011 U.S. gross merchandise value for mobile at $2 billion and its 2011 U.S. cut at around $185 million. North America represented 54.5% of Amazon's total sales in the second quarter; if that ratio also applies to mobile, its U.S. and Canada m-commerce sales this year would total $1.09 billion. Amazon includes in m-commerce sales purchases of electronic books via its Kindle mobile e-reader, but Amazon does not specify the dollar value of those e-books sales.
Keeping things simple
Like Amazon, many of the mobile leaders among retailers, travel companies and ticket sellers have recognized the importance of making mobile shopping simple and straightforward.
Site search is key for mobile shoppers who often have something specific in mind. In its smartphone app, Buy.com not only features a site search box at the top of the screen, but also offers three buttons below the search box—Speak, Snap and Scan—that allow shoppers to search by speaking, snapping a photo of a product, or scanning a bar code.
"You could be at a restaurant drinking a bottle of wine and take a picture of the label and purchase it right there and then from our app," says Neel Grover, president and CEO of Buy.com.