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Mobile commerce blasts off
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Amazon also can offer consumers a much broader mobile shopping experience than most other retailers because of its big inventory, competitive prices, free or low-cost shipping, one-touch mobile checkout, and an app that enables consumers to scan product bar codes in competitors' bricks-and-mortar stores to easily check Amazon for a better price, says longtime Amazon observer and ChannelAdvisor Corp. CEO Scot Wingo.
"A consumer can visit any other mobile site and, even if they've registered there before, the experience won't be as frictionless as it is on Amazon," Wingo says. "Amazon really does set a very high bar on these things."
With their combined $16.4 billion in mobile sales, Apple and Amazon account for around 50% of U.S. mobile commerce sales, the Mobile 500 finds. But the m-commerce market is far from mature, meaning there's still plenty of room for growth and new players, particularly as more consumers shop online using their smartphones, tablets and other devices connected to the mobile web, says Stephen Burke, vice president of mobile for digital marketing firm Resource LLC.
"Nearly one-third of all adults in the U.S. now own tablets and nearly two-thirds have a smartphone," Burke says. "There's a lot more shopping that's going to happen on a mobile device."
In 2013, 290 U.S. merchants will meet or exceed the 67% average growth rate for the 331 U.S. merchants ranked in the Internet Retailer Mobile 500 with at least two years of mobile sales data, including Market America (No. 250), the fastest-growing merchant with mobile commerce revenue that will grow nearly 600% to $7.4 million in 2013. Market America attributes its mobile growth to a vastly expanded product inventory and updated versions of its mobile app, which the company says accounts for about 20% of its mobile commerce sales.
For some Mobile 500 merchants, mobile commerce isn't just the fastest-growing portion of their e-commerce program, it's also becoming the biggest. Already mobile commerce accounts for 40%, about $260 million, of sales at web-only flash-sale merchant RueLaLa. Mobile could account for as much as 60% of sales as soon as next year, the retailer says. Flash-sale retailers do particularly well in mobile commerce because they offer goods for a limited time, making it particularly convenient for a shopper to make her purchase on a mobile phone before the sale ends.
With a lot of its future growth hinging on mobile commerce, RueLaLa is becoming a "mobile-first" company, says vice president of mobile Michael Putnam. Retailers that adopt the mobile-first philosophy typically first consider how a change will affect smartphone and tablet shoppers, and let mobile changes guide revisions to their desktop sites. "Our customers are going more mobile all the time and we are going where they are," Putnam says. "We have made mobile commerce a strategic priority; it's been a huge change for the business."
RueLaLa first introduced a mobile commerce site and app four years ago. Aiming to reach even more mobile shoppers, RueLaLa.com in the past year updated its mobile app with new features that let shoppers quickly determine the availability of desired sizes and colors of apparel and introduced a "Right Now" page that shows shoppers which items have sold out or are close to selling out.
RueLaLa in May also added Google Wallet as a payment option. Google Wallet allows consumers to store their credit and debit card numbers and billing information in one place so they can check out in two steps from any Android device. "Our No. 1 focus with mobile commerce is to keep making it easier for the customer to use," Putnam says.
Keeping mobile commerce simple and focusing on younger consumers who use their mobile devices throughout the day are chief reasons mobile sales will grow around 360% in 2013 to around $37 million at web-only apparel merchant JackThreads, says founder and CEO Jason Ross. At JackThreads, 50% of sales stem from mobile devices; 62% of its online traffic comes from smartphones and 6% from tablets, Ross says.
The biggest driver of mobile commerce growth is the merchant's iPhone, iPad and Android apps that account for about 90% of mobile sales, and JackThreads makes sure those apps are easy to use. "The biggest factor behind our growth is that the mobile experience we're providing our customers is just really damn good," Ross says. "Our app has a really simple design and provides a great user experience. Many other brands try to cram all the features of their web site into their app experienceÑwe only introduce features and functionality that are essential to signing up and making a purchase."
For example, the home screen of the app offers three options: Sign Up, Log In or Look Around. Tapping the Look Around option brings the shopper to a screen that shows two product photos and provides three more options: Today's Sales, Seasonal Shops and Shop By Style. "Users don't need bells and whistles in mobile," Ross says. "They just need a clean, easy way to buy with just a few taps."
Getting mobile right is particularly important for an e-retailer like JackThreads that targets consumers in their 20s and 30s, Ross says.
"We attribute a great deal of our success to the fact that our demographic aligns perfectly with the mobile-first mentality of Millennials," he says. The Millennial Generation includes people born from the early 1980s through the early 2000s. "The data tells us that users who buy on multiple screens have a 60% higher lifetime value than their single-screen counterparts. As a result, getting the app into the hands of as many existing users as possible has been a big priority."
JackThreads encourages consumers to download its apps on its web site and in e-mails, as well as through ads in JackThreads customers' Facebook news feeds. "We are finding an incremental audience with the app, people that never discovered us on the web," Ross says. "Mobile has also been the primary device our international users have adopted; we are currently shipping to Canada, Australia and the U.K."