Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Mobile commerce is emerging as the next big retail channel. Merchants that get in on the ground floor will have an edge.
Consumers are moving rapidly to smartphones that not only let them make calls, but on which they also can play videos, search the web, access e-mail, play online games and conduct transactions, anytime, anywhere. With Nielsen Co. projecting that half of mobile phones in use in the U.S. by the end of next year will be smartphones, in effect small computers consumers have with them at all times, retailers are no longer treating mobile commerce as an afterthought.
Instead, many retailers are rushing to get in on the ground floor of this exploding segment of e-retailing. U.S. mobile commerce sales are predicted to hit $2.4 billion this year, double the $1.2 billion posted in 2009, according to Coda Research Consultancy.
To cash in on this dynamic market, retailers must have a coordinated plan for driving traffic to their mobile sites and converting sales. Keys to success will be developing a mobile web site that renders properly on any mobile device and that offers intuitive navigation, pleasing design and frictionless checkout.
Proper rendering of the site on mobile devices is where retailers need to start. “At the very least, retailers must have a version of their web site that renders correctly to mobile devices so visitors can research products and gather basic information,” says Tony Svanascini, CEO of web site design firm Americaneagle.com. “Even if the mobile site does not have a shopping cart, it has to display properly.”
With numerous mobile operating systems in the market, retailers should start their foray into mobile commerce by designing web sites for the leading operating systems. The most common smartphone operating system remains BlackBerry, used by 39.3% of smartphone subscribers in the second quarter, followed by the Apple iPhone with 23.8% and Google’s Android software with 17%, according to comScore Inc.
The type of mobile device being used by the shopper can be identified by the signal its operating system sends to the retailer’s server, so that the server can call up the appropriate version of the site.
“A mobile web site should render on at least 80% of the mobile platforms in the market, preferably the leading platforms,” says Svanascini. “If that is not the case, then the retailer needs to step back and address that problem.”
Screen size, the speed of the web browser and why mobile users come to the site are key elements to consider when designing a mobile web site. Users of smartphones with slow web browsers, such as the BlackBerry, are more apt to visit a web site to gather basic information, such as store locations, sales and promotions, than to shop.
“Retailers need to get inside the head of mobile users when designing their mobile sites to provide information users want and make it readily available,” says Svanascini. “BlackBerry users know their web browser is slow, at least with the current version, so they are not necessarily looking to shop, but gather information that leads to an in-store purchase or purchase through the retailer’s e-commerce site.”
To make it easier for mobile users to access web sites designed to leverage the technical sophistication of their mobile devices, Americaneagle.com can design a core mobile site that renders on any mobile device and features buttons visitors can click to access sites designed specifically for Apple’s iPhone and iPad.
The alternative to creating a mobile web site that can render on any smartphone is to write an m-commerce application that launches a retailer’s web store from the consumer’s phone. These are specific to each type of phone, such as iPhone, BlackBerry or Android.
“A shopping app that can be launched directly from a smartphone can make the mobile shopping experience better, but retailers need to remember there ought to be consumer demand for such an app before it is written,” says Svanascini. “We recommend to retailers that if they are going to write a shopping app, they write it for the iPhone first, because most app sales are for the iPhone.”
One twist mobile commerce brings to retail marketing is that consumers can receive coupons on their phones. The coupons feature a bar code that store clerks can scan at checkout or a promotional code the consumer can enter when shopping online.
“It’s a powerful call to action, especially if the retailer is able to identify that the consumer is in or near their store by tracking the GPS signal from their phone before sending the coupon,” says Svanascini. “With so much that can be done around mobile commerce, retailers that get in the game now will be way ahead of the curve when m-commerce goes mainstream in a few years.”