Criminals targeted Christmas Eve and shipping cutoff days for delivery by Christmas for fraudulent purchasing, a new study finds.
(Page 2 of 3)
"And TV shopping is a unique exception because their fundamental business is by phone," Mulpuru-Kodali says. "They created apps and resources that shift the shopping behavior to that [mobile] device." Now, instead of dialing they're tapping.
But it's not just TV shoppers who are cozying up to the smartphone as a shopping device. 85.9 million consumers used m-commerce sites and apps in July 2012, comScore Inc. finds. Consumers are not a stumbling block to more m-commerce growth, says Nikki Baird, managing partner at Retail Systems Research LLC. Mobile sales will jump even more when retailers make it easier for consumers to shop via their devices, Baird says.
"With e-commerce we had to get over the trust factor," she says. "Today, people regard their phones as more secure than the Internet, even though they're using the Internet, because phones are such personal devices and the devices are with them all the time. The issue is not with trusting the phone as a place to shop, it's with going to a mobile site and trying to purchase something and saying, 'Oh, this site is taking forever to load.'"
A measured approach
Making mobile sites load quickly and fun to shop requires investment. And many retailers are investing only modestly, including some large companies. A 2012 study by e-retail trade group Shop.org and Forrester Research finds half of the retailers polled say they spent less than $100,000 on smartphone investments in 2011, and 74% spent less than $100,000 on tablet investments.
The survey of Shop.org's 600 members, including the 10 largest retailers in the United States and more than 60% of the top 100 e-retailers in the Internet Retailer Top 500 Guide, finds these larger retailers' mobile plans remain conservative for this year. However, they do plan to spend more catering to tablet users, allocating an average of $207,000 for tablet-related initiatives in 2012, up 276% from $55,000 in 2011.
What's keeping them from investing more in mobile? 60% of the retailers responding to the survey say their business objectives for mobile initiatives were unclear and 40% note a lack of in-house expertise in such areas as designing for smartphones and tablets. Additionally, 36% say it's not easy to get funds for mobile projects.
That may be more true for retail chains than web-only retailers, some merchants and experts say.
"Web-only retailers understand technology, that is their sole focus. Store retailers have a lot of competing needs for investments and are typically more hesitant to weigh that too much toward technology," says Julie Bornstein, senior vice president of Sephora Direct, the direct-to-consumer arm of chain retailer Sephora USA Inc. "Many store retailers view technology as a necessary evil, which stems from the days before e-commerce."
Further, the mindset of executives at retail chains is different from that of leaders at web-only merchants, Bornstein adds.
"People at pure-plays are 100% digitally focused, and with that as their focus they are going to make sure they stay ahead of what is going on in the digital landscape," she says. "Cross-channel retailers have many more things on their minds, so the amount of time they can focus on and invest in the digital space, and inside that the mobile space, is only a portion of what they're thinking about."
In the Mobile 400, the 141 ranked retail chains will reach $1.77 billion in 2012 mobile sales—20.1% of mobile retail sales and 14.6% of Mobile 400 sales. But for retailers with stores, dollar sales may not be as important a measure of mobile success as it is for web-only merchants. For chains, mobile technology slips into a multichannel structure of sales and marketing tactics. Mobile consumers often use a site or app as a shopping assistant and then complete a purchase in-store, not via mobile.
That was the reason why The Vitamin Shoppe, No. 177 in the Mobile 400, launched its m-commerce site more than two years ago.
E-commerce is just a part of The Vitamin Shoppe's business, accounting for around 10% of the 600-store chain's sales; and a large percentage of web shoppers are also retail store customers preparing for a store shopping trip, says Scott Anderson, director of e-commerce.
"We built our mobile site for our retail customers," he says. "If we get some sales from the mobile site, that's great, but that's not why it's there. It is there to offer services like what's in stock nearby and a store locator. On our e-commerce site, more people leave through the store locator than through checkout—and we have a low cart abandonment rate."
Anderson doesn't mind that more mobile site shoppers don't buy on mobile. "The benefits to us from what we're doing in mobile are actually a hidden but huge lift to retail stores because of the supporting role mobile plays."
While many consumers make purchases through smartphones, many more research products and store locations and hours. 15 million U.S. smartphone owners make a purchase via their device at least weekly, finds a survey by the Online Publishers Association and Frank N. Magid Associates. However, a BIGresearch/National Retail Federation study of smartphone owners who have used their phone for shopping finds 60.2% browsed products, 50.7% checked store hours or locations, 34.6% read product reviews and only 26.0% made purchases.
Customers are more likely to buy on a tablet, which may explain why retailers are rapidly increasing their investment in optimizing web sites for tablet viewing and developing and updating apps for iPad and Android tablets.
The iPad alone accounts for 6% of Moosejaw Mountaineering's web sales; other mobile devices account for another 4%. Its tablet shoppers spend an average of $110 per order, $10 more than smartphone shoppers. Moosejaw, which sells outdoor apparel and recreational gear, is No. 105 in the Internet Retailer Mobile 400 with projected 2012 m-commerce sales of $9.8 million, double 2011's $4.9 million. 25% of all its traffic is mobile—44% from tablets, 56% from smartphones, Moosejaw reports. The retailer predicts that a year from now mobile traffic will reach 40%.