June 17, 2011, 11:34 AM

IRCE 2011 Report: Retailers’ m-commerce opportunity is growing rapidly

IRCE Mobile Commerce Workshop chair stresses urgency to jump into mobile.

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There are 234 million mobile phone users in the U.S., according to web and mobile web measurement firm comScore Inc. 48% of those phones, or 112.3 million, can access the Internet. Those numbers show that mobile technology is ubiquitous and merchants need a mobile commerce web site today, said Bill Siwicki, managing editor, mobile commerce, of Internet Retailer, in his opening remarks today at the Mobile Commerce Workshop during the Internet Retailer Conference & Exhibition in San Diego.

“Mobile commerce is growing at a remarkable pace. And if you’re a merchant, you don’t want to be left behind as m-commerce is inextricably weaving itself into the fabric of e-commerce,” Siwicki said. “So if you haven’t already created an m-commerce site or a mobile shopping app, now is the time. It’s not too late.”

Siwicki cited a variety of statistics that painted a picture of a growing mobile landscape that merchants must navigate. For example, in the first quarter of 2010, according to research firm The Nielsen Co., 23% of mobile phones in use were smartphones; that figure rose dramatically to 36% in the first quarter of 2011. Nielsen says by the end of this year, nearly half of all mobile phones in use will be smartphones—that’s around 115 million people armed with powerful mobile devices.

“The adoption of smartphones is the primary driver behind mobile commerce,” Siwicki said. “It is inevitable that once a consumer has a smartphone in his hand, his use of the mobile web soars. And he has immediate expectations that site publishers and merchants provide a high-quality web experience that befits the device in his hands.”

Two mobile operating systems are dominating the smartphone market, and retailers must understand how they work and what they can do, he added.

Nielsen says that as of April 2011, devices running the Android operating system accounted for 37% of the market while the iPhone corralled 27%.
“These are the two operating systems you need to focus on when building mobile apps,” Siwicki said. “Third-place finisher BlackBerry’s market share, now 22%, has been sinking like a stone, and it’s a brand that attracts business users who keep calendars and contacts and primarily check e-mail. They don’t browse the web and use apps as much as iPhone and Android users. HP WebOS—the brand formerly known as Palm—and Microsoft Windows Phone have minimal market penetration.

It’s Android, which runs numerous smartphones and tablets, and Apple’s iOS, which runs the iPhone, iPod Touch and the highly popular iPad (Two iPad apps push the evolution of the catalog ), that should be the focal points for merchants.”

As smartphone penetration grows, so, too, does tablet PC penetration, thanks to the phenomenal success of Apple Inc.’s iPad. Tablet PCs are changing the mobile landscape and retailers must be prepared with optimized web sites, and perhaps tablet apps, too, Siwicki said. Forrester Research Inc. reports in 2010 there were 10.3 million tablet users. That figure will balloon to 26 million this year, 50.7 million in 2012, 67.7 million in 2013, 76.1 million in 2014 and 82.1 million in 2015.

“The iPad and its Android counterparts are amazing machines, and as time goes by you will see more consumers shifting their web browsing time from their desktop PCs to their tablets,” he said. “It’s important to address the large number of users of the iPad, by far the market leader with more than 80% of the tablet market sewn up today. It will be crucial to address tablets of all kinds within the next year or two.”

Forrester Research also has studied the state of mobile commerce strategy and has found that 29% of merchants have implemented a mobile commerce strategy and now are refining it, 19% have a mobile strategy and have begun implementation, and 9% have a strategy and are preparing for implementation.

“That’s 57% of retailers in m-commerce or very close to being there. And of those merchants with a strategy, 44% have one or more employees dedicated solely to mobile commerce,” Siwicki said. “If you’re not in mobile commerce, you’re losing a highly competitive edge.”

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