Online sales climbed 24% year over year, while Best Buy’s overall sales were flat.
Retailers must forge tight relationships with vendors to succeed in the fast-paced world of mobile commerce.
Think things move fast in the Internet realm? Try mobile.
The mobile web and consumers’ mobile desires are evolving at what used to be called Internet speed. First it was text message marketing, then came mobile content sites, then fully transactional m-commerce sites, mobile applications and purchasing via text messages. Now comes smartphones as bar code scanners. What’s next?
Plenty, no doubt. And it likely will continue to come in a rush. Because the pace of change is so rapid, most retailers in m-commerce today rely on vendors that are following this arena closely, rather than trying to keep up themselves. And because change is happening so fast, both retailers and vendors agree that an unusually close yet flexible retailer/vendor relationship is required to achieve success.
The top dogs
While it’s not always easy for a retailer to get an I.T. vendor’s attention, the good news is that because of the pace and complexity of change and because mobile is generally viewed as a big growth opportunity, mobile vendors’ top executives are willing to work closely with pioneering clients.
That’s been Skymall Inc.’s experience with CardinalCommerce Corp.
“Generally when I’m dealing with a vendor, I’m dealing with an account manager who lives in a silo. They’re fed bits of information from above but are not always abreast of what is going on in their own organization,” says Jay Scannell, vice president of information technology at Skymall, which operates Mobile.Skymall.com and a text messaging program. “Since the beginning with CardinalCommerce, I’ve had great relationships with not just the account managers but with the co-founder of the company and the chief technology officer; they participate on calls almost as much as account managers.”
Interacting with the C-suite translates into security in fast-changing m-commerce, Scannell adds. “They say here is what we’re doing for the next six months, here is what we’re experiencing today, might these be of interest to Skymall so we can do these things together as we do exploratory work,” he says. “Because they have been open to that level, I always have had a great sense of security so that when an account manager says something, I know she has the backing from the executive level on down.”
Retailers in mobile commerce and the vendors they work with say surviving and thriving in this wound-up space requires forging a relationship tighter and more flexible than others. The two must work closely together to keep a sharp eye on mobile developments and react to those developments quickly, as well as lead the way through innovative mobile developments of their own, says Sean Spector, co-founder and senior vice president of business development and content at video game rental giant GameFly Inc.
“For us it was all about seeing how Usablenet responded to us throwing a lot of questions at them about our No. 1 priority: offering a really robust site experience. We didn’t want to just pick out two or three key elements of our e-commerce site, we wanted to deliver a mobile experience almost equal to the experience on a PC,” says Spector of the mobile version of GameFly.com (the standard URL auto-redirects mobile users to the mobile-optimized site). “We knew it wouldn’t work great on all phones, but on the smarter phones out there, that’s what users want today, especially with the iPhones.”
In response, GameFly’s m-commerce site builder, Usablenet Inc., gave retailer executives a tour of the mobile sites it has built, showcasing ones pushing the envelope for content and transactions, including complex presences for airlines and car rental companies.
“They made us very assured after we saw the airlines and car rental sites they built,” Spector says. “In the end, it really came down to us seeing that Usablenet cared about the mobile site and the user experience as much as we did.”
Creating and fostering successful retailer/vendor relationships is a key to success in m-commerce, the organizations say. But what are the critical elements of a successful relationship? The organizations say involving many people at different levels within both organizations, maintaining a constant dialogue, and having the ability to move quickly. And, they stress, it requires both parties to understand that mobile commerce technology is not an off-the-shelf proposition.
“The approach we take is: The mobile channel is evolving and we will learn together,” says Tim Sherwin, executive vice president and co-founder of CardinalCommerce, an e-commerce and m-commerce technology company. “We look to create a very flexible relationship in mobile: we will learn, share ideas, try different things, watch how shoppers react to all of this, and grow together. Mobile is not an inventory system where you can say this is how it works and this is how it will achieve your requirements.”
To work and learn together demands the right mixture of people. As Skymall has experienced with top brass at CardinalCommerce, other retailers in the mobile arena have found vendors willing to go well beyond an account manager or two when forging a successful relationship.
Julie Bornstein, senior vice president of Sephora Direct at beauty retailer Sephora USA Inc., receives attention from the chief executive of Bazaarvoice Inc. The customer reviews vendor launched a service in January that builds mobile sites dedicated to reviews. First up: m.Sephora.com, designed for use by customers in stores who would like to find out the opinions of others.
“We have interfaces at all levels,” Bornstein says. “In addition to others, I’ve worked with Bazaarvoice’s CEO and their vice president of client services. From our end there are connection points at the executive level and in marketing, e-commerce and I.T. We have a lot of touch-points and have built a relationship with a high level of commitment. You need partnership and ownership throughout the vendor and retailer organizations.”
And there must be constant dialogue between the two organizations to ensure the retailer knows what’s possible and how ever-changing mobile technology can affect the retailer’s mobile strategy.