Groupon says its focus is on the bottom line, rather than top-line growth.
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Still, retailers need to be prudent when using social media to interact with consumers. Even though consumers are interacting more with retailers through social networks, they expect retailers to observe proper etiquette and not bombard them with ads and promotions.
"Social networks are not a forum for retailers to spew out an endless stream of information that consumers do not consider relevant or they may view as intrusive," says Gary Black, general manager of CDC eCommerce, provider of e-commerce platforms. "In order for a social media strategy to work, retailers have to create meaningful dialog with the customer and allow consumers to post comments on their Facebook fan page."
As with social media, retailers have a lot to learn about mobile commerce, a selling channel that effectively did not exist just a few years ago. While the initial learning curve is steep, retailers getting in on the ground floor of this emerging technology will reap big dividends down the road.
"With the popularity of web-enabled smartphones and tablet computers consumers are no longer tied to their desktop or laptop computers and that means they can browse for content on the retailer's site, product information, product reviews, available inventory and comparison shop on the go or while they are in a retailer's store," says Pedro Santos, chief strategist, e-commerce, for Akamai Technologies Inc., provider of content and application delivery services. "That makes mobile a must-have technology, even if consumers are not necessarily using it today to make a purchase."
Just as with a web site accessed through a desktop computer, performance is a critical component of the consumer experience in mobile commerce. One recent report showed abandonment rates of mobile sites increased more than three times when page load times went from two seconds to four seconds. And, as with an e-retail site accessed from a PC, the components that make up a mobile web site may reside on a server far from the shopper. The geographic distance of the consumer from that server can make the mobile site slow to load on the consumer's phone.
Akamai speeds mobile site downloads by caching the static content of the site, such as product images and descriptions that remain unchanged for a considerable period of time. Caching content on many servers around the world allows retailers to deliver that content locally, as opposed to having the information traverse its way across the network, which can degrade mobile site performance.
"Our servers sit near mobile gateways so we can increase the speed of content delivery," says Santos. "While dynamic content, such as blogs, available inventory and pricing can't be cached, we can calculate the fastest path for dynamic content to travel to a mobile device so that consumers' performance expectations are met."
And Akamai can store information for all the versions of its mobile site a retailer may develop to ensure compatibility with different kinds of mobile phones. For instance, the Apple iPhone does not render Flash, so retailers may develop an iPhone site that uses other technology besides Flash to present video and animated graphics.
Mobile in store
With smartphone users relying more and more on their handsets to research products online while shopping in a bricks-and-mortar store, retailers and consumer goods manufacturers are sensing an opportunity to send product videos to those shoppers. They can do that by linking product videos to quick response codes, or QR codes, two-dimensional bar codes that can be stamped onto product packaging or to signs on store shelves, offering more information on the product.
The consumer uses the camera in her phone to snap a photo of the QR code, and free apps available for all major smartphones can decipher the QR code and link the consumer to a web page on the retailer's site that hosts the product video.
"Retailers need to be thinking about mobile technology in terms of acquiring, converting and retaining customers," says Ability Commerce's Buzzeo. "QR codes can help retailers capture a sale in the store by making it easier to access product information that leads to the buying decision. Consumers aren't going to do a whole lot of browsing on their mobile devices because of the limited screen size, so retailers need to give them the tools that get them to the information they want in as few clicks as possible, especially when they are in the store and not interacting with a sales agent."
What's more, retailers with appealing mobile commerce sites can intercept sales from consumers that are conducting product research in a bricks-and-mortar store. It is not uncommon for consumers to use their smartphones to comparison shop while in a retail store by searching for a product on Google. Retailers that have optimized their mobile sites by creating mobile landing pages that deliver the information consumers want, such as size, price and availability, can capture a sale, even from a consumer shopping in a competitor's store.
But mobile commerce site design is crucial to winning those sales, says Ai's Schmelkin.
"We are seeing more consumers go into apparel stores to try on an item to determine fit and see how the item looks on them and go online using a mobile device to make the purchase," he says. "Successful mobile sites put the most relevant content out in front of consumers. There are only a few inches on the mobile screen to show a product description, product reviews and other relevant information, so that information has to count and be properly placed."
While the smaller screens of smartphones force retailers to pare down navigational elements so that it's easier for the mobile shopper to find the information she wants, consumers accessing a retail site on a smartphone still want many of the same features and functionality available to them on a retailer's conventional web site.
"Consumers want to be able to access their wish list through the mobile site and what is in their shopping cart from their last visit, whether that visit took place through the e-commerce site or the mobile site," says OrderDynamics' Turcsanyi. "These are the little nuances that are becoming more important as consumers embrace mobile commerce."