E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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Mobile apps offer a richer, quicker experience because they reside on the smartphone and can take advantage of its computing power and slick user interface. Much of the process of buying through an app can be completed on the phone itself, and needed data can be drawn directly from a retailer’s web server.
For instance, a music retailer’s app can be programmed to present music from a wide variety of artists, and the app accesses the retailer’s server when the customer chooses to buy. And the app is connecting directly to the server, not going through the slower interface of a web site.
Retailers with mobile apps today definitely qualify as trailblazers. Indigo Books & Music Inc., for example, last month unveiled Shortcovers, a new division of the company that offers a mobile app for the iPhone with versions for BlackBerry, Android and Symbian mobile operating systems on the way. Shortcovers sells e-books and other publications in a variety of formats. It’s designed to compete with the likes of Amazon’s Kindle and Sony’s Reader, and Indigo says it has an edge over these book-sized devices.
“Shortcovers is a service for anyone who wants instant access to content with the convenience of having that access from the device they already own,” says Michael Serbinis, executive vice president and chief information officer at Indigo. “Ultimately, a device like the Kindle is not something you will have with you all the time; your phone is.”
1-800-Flowers.com recently debuted its Mobile Gift Center app, which recreates the retailer’s e-commerce experience in a format optimized for the iPhone. Drs. Foster and Smith soon will launch an iPhone app that displays its entire catalog of products, with links to its e-commerce site for transactions. Godiva has an app that recreates its e-commerce site. And Delight.com offers a mobile app that highlights its deal of the day; it plans to launch a fully transactional app later this year.
Some retailers see mobile apps as an m-commerce game-changer, citing the richer experience and close connection-apps reside on mobile desktops-to customers. But most believe apps ultimately will complement m-commerce sites, not compete with them.
“In the next five years, apps and sites will be working together to fulfill different needs,” says Lynda Keeler, president and co-founder of Delight Networks, which operates Delight.com. “A perfect example is the New York Times. Its app gives me a very distilled, easy to use and navigate experience. Its mobile site offers access to a lot more content but it’s not always as easy to read or navigate. So the two work together to give readers what they want, the way they want it.”
Overall, some retailers are convinced m-commerce is on the way to joining stores, catalogs and web sites as a mainstream retailing channel.
“M-commerce absolutely is becoming the fourth sales channel,” says Kevin Ranford, director of web merchandising at 1-800-Flowers.com, which operates the mobile app, m-commerce site 1800Flowers.mobi and a text message marketing program. “It’s still emerging, and today we spend about 5% of our time and resources on it.”
As younger consumers so inextricably connected to their mobile phones age and their incomes grow, they’ll expect retailers to sell via phones-and m-commerce will be a full-fledged channel, says Scannell of Skymall.
“Mobile sales will be slow for a couple more years, but then a big bubble will come through the pipe and that will be a major wake-up call, showing everyone just how important this channel is,” he says.
Other retailers consider m-commerce important, but as a part of e-commerce, and have set up their m-commerce programs accordingly.
“Mobile is very tightly linked to our Internet business, and it will always be linked to e-commerce,” says Kimberly Land, vice president of Godiva Direct at Godiva Chocolatier. The gifts retailer sports mobile applications for the BlackBerry and iPhone and an m-commerce site (an auto-redirect, except for iPhones, from Godiva.com). “At the end of the day, you’re bringing someone to a site where they are inputting information and you’re fulfilling orders in the same way.”
Whether as its own channel or as a complement to e-commerce, m-commerce appears likely to play a big role in retailing in the decade ahead.