Meanwhile, PayPal acquires mobile payments firm Paydient.
Retailer Musician’s Friend defies the common wisdom, embarking on an ambitious m-commerce program on its own.
Most retailers engaged in mobile commerce have two things in common: they have one site and/or app and they use a vendor to build and help maintain their mobile presence.
Musician’s Friend Inc. bucks these trends: It’s operating a site and an app and building three more sites, and it’s doing all the work in-house.
For its Musician’s Friend brand, the retailer launched its Stupid Deal of the Day iPhone app in November 2008 and a fully transactional m-commerce site in March 2009. As for its other brands, Music123’s m-commerce site will launch in the summer, The Woodwind and Brasswind’s in the fall and Guitar Center’s in 2011.
“We have a multi-brand strategy and have been very careful to define unique value propositions for each of the brands,” CEO Craig Johnson says. “It’s the same reason we have individually branded e-commerce sites. Our strategy all along has been to provide a customer experience based on how and where they want to shop, and right now mobile is where it’s at.”
No need for help
Musician’s Friend is doing all the work in-house because it found paying a vendor to do the work would cost more-it cost a little less than $50,000 to build the MusiciansFriend.com mobile site, it says, when a vendor might have charged $100,000 or more for the same functionality-and because it believed its developers were up to the task.
“We have a really good user experience and web development team and we wanted to give them the opportunity,” says Portia Becker, director of e-commerce systems development.
Experts say building and maintaining m-commerce in-house is a good strategy for retailers that see m-commerce as a high priority.
“Starting out in mobile in-house is a good strategy if you’ve decided m-commerce is strategically very important and you have a long-term view for the future,” says Forrester Research Inc. vice president and principal analyst Julie Ask, who specializes in m-commerce.
She adds that managing m-commerce in-house over time gives a committed retailer more power and flexibility-if a retailer has a strong development staff.
“If you are using a vendor’s platform you are limited to what the platform can do and you might look like your competitors. So you benefit from the scale of companies using the same nuts and bolts but you are also tied to the vendor’s pace of innovation,” Ask says. “Retailers doing mobile in-house, assuming they have a strong staff, can do what they want. A downside can be complex systems integration, but it can ultimately be easier to do in-house because it requires no coordination with outside vendors.”
Since Musician’s Friend launched the mobile site in March 2009, traffic from mobile devices has steadily increased. And more important, mobile shoppers are buying: Mobile sales now are double what they were when consumers could only shop the conventional e-commerce site via their mobile phones. The average order value of a mobile sale is consistently higher than that of an e-commerce sale, and a high percentage of mobile sales are coming from new customers.
“We’re very pleased with the results from our m-commerce initiative,” says CEO Johnson, who would not disclose mobile sales. “And mobile commerce is more than just providing the ability to shop-it’s entanglement with our customers. It’s providing them with research, product reviews and community. We look to mobile commerce as a great opportunity to engage enthusiasts, acquire new customers and build loyalty in our existing customer base.”
A ‘stupid’ start
The m-commerce journey began in November 2008 with the launch of a mobile app-built on the fly by an in-house developer for what the company calls a minimal cost-that focuses on one of the e-commerce site’s most popular features, the Stupid Deal of the Day.
“We thought it would be a good idea to get our foot in the water with a real simple iPhone app,” Becker says. “At the time we did not have a mobile platform for the e-commerce site. So for the app we put in click-to-call functionality so customers could place an order for the product over the phone. We got our name out there, which was important.”
Then came the big step: a fully transactional mobile commerce web site that enables consumers to shop all of Musician’s Friend’s products.
First up was the design team, which created the look and feel of the small site. The team took a class in mobile site design from site design consulting firm Adaptive Path to help guide them down this new road.
The team focused on browsing, site search and a special home page feature, winnowing down the e-commerce site’s features and functions until it arrived at what was necessary for customers to see and read.
“The majority of all users do one of three things when coming into the home page: they keyword search, navigate to a category or view the Stupid Deal of the Day,” says Jason Cave, director of user experience. “Based on this, we removed any additional elements, including promotional content, product callouts and other features. In the future we’ll add elements back in and test them as we go.”
Design staff took three weeks to complete its work. Then it was time for e-commerce personnel to step in.
Becker assigned one programmer to handle front-end work and another to the back-end. The former worked in HTML, Cascading Style Sheets (CSS) and Java to pull together a slimmed-down version of the e-commerce site. The latter did the coding work that created the m-commerce platform and linked it to the e-commerce infrastructure. The work took six weeks.
After four weeks of testing and a week to prepare for the launch, Musician’s Friend debuted the site in March 2009.
Now work is humming along on the m-commerce sites for sister brands Music123 and The Woodwind and Brasswind. Musician’s Friend staff are following the same path they took with the first site to construct the second and third. But when it comes to the fourth, the one for Guitar Center, in the earliest stages of development, staff determined a different approach may be warranted because Guitar Center has bricks-and-mortar stores.