The acquisition will add more than 300 products to L’Oreal’s lineup.
Retailers diving into mobile commerce face a clear choice: m-commerce specialists or e-commerce incumbents.
Specialists in mobile technology like Digby, Moonshadow eCommerce Inc., mPoria Inc., Unbound Commerce and Usablenet Inc. have had the emerging m-commerce market sewn up until recently. If a retailer wanted a vendor to build a mobile site or app, and about 9 out of 10 do rely on outside companies when going mobile according to Internet Retailer research, it turned to one of these or a handful of other mobile vendors.
But in a virtual conga line, many e-commerce technology suppliers introduced m-commerce functionality last year, including Escalate Retail, Digital River, Demandware Inc., Art Technology Group Inc., MarketLive Inc. and IBM Corp. Expect Fry Inc. and Venda Inc. to join the club early this year.
So retailers going mobile now face a classic technology buying conundrum: single-source or best-of-breed?
Which way to go?
Single-source means adopting the m-commerce offering of an existing e-commerce vendor, even if it’s a relative newbie at m-commerce. Best-of-breed means choosing to go with a vendor that specializes in mobile technology and has some experience under its belt.
Online retailer Ritz Interactive Inc. chose to work with its e-commerce systems vendor, CardinalCommerce Corp., so that it could get started in m-commerce quickly, says Andre Brysha, senior vice president and chief marketing officer.
“This decision was strictly driven for us by simplicity of implementation,” says Brysha, who notes the implementation took three weeks. Andrew Brown, co-founder and CEO of ToolFetch.com, made a similar decision, enlisting his search engine management company, Netconcepts, to build an m-commerce site, even though it was the first for Netconcepts.
Brown spent months researching his options. “Ultimately, it came down to one of the biggest factors, which was that Netconcepts knew the make-up of our site, they knew our business model, they knew us after working with us for more than three years,” he says.
Brown also liked Netconcepts’ approach: Keep it simple.
“The way our mobile site is set up, you can access it on an iPhone or an old flip-phone and it renders correctly for that device,” he says. “A lot of our customers still use older phones, so we really had to keep things simple.”
But not everybody wants simple. If a retailer aspires to the most advanced mobile selling applications, it’s not as likely to get that from an e-commerce technology provider because those companies are not primarily focused on m-commerce, says Brian Walker, senior analyst, e-commerce, at Forrester Research Inc. For m-commerce specialists, he says, that’s their business, and they understand the nuances of the mobile world.
“Mobile commerce companies are going to be very focused on a very rapidly changing environment for development,” Walker says. “That’s going to be difficult for an e-commerce company to keep up with in the near term.”
Executives at 1-800-Flowers.com Inc. contend going with a mobile specialist, Digby, provided a level of innovation for their mobile site and apps they could not get elsewhere.
For example, Digby just integrated 1-800-Flowers.com’s Fresh Rewards loyalty program into the mobile channel. While other retailers are still figuring out the transactional piece of mobile sites and apps, Digby has enabled the e-retailer to jump to “the next stage,” says Kevin Ranford, director of web marketing.
“This is a huge value-add for us,” he says. “Our best customers are coming to the mobile channel, and to be able to give them access to the loyalty program is a key benefit. Other gifting merchants in mobile don’t have transactional offerings yet. So we have not only a transactional offering but a robust experience with value-adds like loyalty in m-commerce just like we have in e-commerce.”
Ranford says there is another important benefit of working with a smaller, niche vendor: clients get attention from the vendor’s top executives.
“Digby is one of the best vendors we work with. They get the space and are extremely accessible, even to the level of the CEO,” he says.
The rapid evolution of the mobile arena is another argument for working with a vendor focused on mobile, says John Stewart, marketing manager at US Appliance, which passed on working with an e-commerce vendor and chose m-commerce builder Digby.
“Using a mobile specialist seemed to make sense, as obviously this is a new, growing and quickly changing segment,” Stewart says. “Just trying to keep up with the changes in mobile phones and browsers is a challenge for any company offering mobile. A company that does one thing very well can adapt and react better than a large provider pulled in many directions.”
And it’s innovation that attracts many retailers in m-commerce today to mobile commerce vendors. Smartphone makers and other mobile technology companies are innovating so fast that mobile retail sites and apps will have to keep up to meet consumer expectations, retailers in mobile and m-commerce experts contend.
“Ideally, m-commerce would be fully integrated into the e-commerce package out of the box,” says Eoin Comerford, vice president of marketing at Moosejaw Mountaineering, which went with m-commerce specialist Unbound Commerce to build it mobile site. “However, Moosejaw tends to be on the leading edge of new technologies, which usually means finding the niche technology companies that are there.”
Cost a lesser issue
The retailers that have made their vendor choice generally say money was not a big factor in the decision. This arena is just emerging, and prices vary according to many factors. But generally it costs $10,000 to $50,000 to build a mobile web site, or an app that works on a specific mobile phone such as the iPhone or Blackberry. That’s not a big outlay compared to other e-commerce investments.
For 1-800-Flowers.com, the important thing was to get in quickly, which meant going with a mobile specialist since the e-commerce vendors weren’t yet in the market.
“When our CEO Jim McCann recognizes a big opportunity, somewhere the company needs to be for our customers, he wants us to get involved in the earliest stage, no matter what,” says Ranford of 1-800-Flowers.com. “This is something we’ve illustrated in the mobile and social spaces.”