October 3, 2013, 2:30 PM

Mobile commerce blasts off

A 63% increase in U.S. mobile commerce sales in 2013 illustrates the trend. Simple but powerful is the mantra for mobile-oriented retailers.

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"Mobile commerce is a big part of reinventing ourselves as a retailer that wants to engage customers anytime and anywhere," says Wall, group e-commerce director since 2010. "Mobile is making us relevant to new groups of shoppers."

That's a big shift for Shop Direct, a nearly 90-year-old direct marketer of apparel, accessories and home furnishings that generates $2 billion a year in sales from such well-known U.K. brands as Littlewoods and Woolworths. Just three years ago, the retailer had only a basic e-commerce site and no strategy to attract consumers in their 20s, 30s and 40s who were shopping online using the mobile web and apps.

With its sales plateauing, Shop Direct in 2010 refocused the company's strategy squarely on trendier e-commerce sites for clothing and accessories and mobile commerce sites to reach a broader range of shoppers.

Today, Shop Direct generates nearly $400 million in annual mobile sales, roughly 20% of its online sales, up from virtually nothing in 2010. It ranks No. 7 in the 2014 Mobile 500, Internet Retailer's research publication that ranks online retailers by their 2013 mobile commerce sales. And mobile commerce could account for one-third of its online sales next year, the retailer says. Over three years, mobile traffic to Shop Direct from smartphones and tablets has grown from practically zero to around 3 million monthly visits and now accounts for about 40% of all traffic. "Mobile is at the core of our e-commerce strategy and the key area where we see substantial potential for growth," Wall says. "Mobile is our way forward."

It's a big part of the way forward for many retailers, suggest data from the Mobile 500. The list includes a wide variety of retailers and consumer goods manufacturers, including e-retail giant Amazon.com Inc. (No. 2), TV and web retailers QVC Inc. (No. 3) and HSN Inc. (No. 9), daily-deal site RueLaLa (No. 11), niche web-only merchants such as JackThreads (No. 88), and specialty apparel manufacturer Tory Burch LLC (No. 70).

These retailers and brands are seeking to reach the rapidly growing number of consumers who are accessing the webÑand increasingly buyingÑvia smartphones and tablets. With a few years of m-commerce experience under their belts, many retailers are adding compelling features, while at the same time keeping mobile sites and apps simple enough to navigate easily on mobile devices' small screens. A growing number are turning to responsive web design so they need only maintain a single e-commerce site that adapts to the screen size a consumer is using. And while many prioritize mobile, a handful are taking a mobile-first approach to Internet retailing, looking ahead to a day in the not-too-distant future when their mobile sales eclipse desktop sales.

"The retailers that are growing the fastest in mobile commerce see mobile as a cornerstone of their e-commerce program," says David Eads, CEO of consulting firm Mobile Strategy Partners LLC. "It's the same in e-commerce markets the world over. If merchants aren't serious about strategies to connect with the anywhere/anytime shopper through mobile commerce, they are missing out on a big part of the future of online retailing."

Mobile commerce's growth is an international phenomenon, and it's leading to mobile sales representing an ever-larger share of online retailing. In 2013, mobile retail commerce in the United States is projected to grow 63% to around $34.17 billion from $20.95 billion in 2012. That includes the combined sales of $25.4 billion of U.S. merchants ranked in the Mobile 500. It also includes an estimated $8.8 billion in U.S. merchandise sales on eBay, which is not itself ranked in the Mobile 500 because it does not sell merchandise on its own, but is an important facilitator of mobile retail sales. Mobile retail will account for nearly 13% of all U.S. e-commerce sales, up from just more than 9% in 2012, according to the Mobile 500.

Another indication of how important a mobile commerce strategy is for retailers comes from web measurement company comScore Inc., which says in March 2013 that 48% of the time U.S. consumers spent on online retail sites occurred on mobile devicesÑ34% of that time on smartphones and 14% on tablets.

M-commerce also is growing worldwide. For instance, 107 European merchants ranked in the Mobile 500 will grow their combined mobile sales 102.8% in 2013 to $4.44 billion. And the combined 2013 sales of the 19 Asian merchants ranked in the Mobile 500 will grow 84.8% to about $527.5 million.

Innovation and a keen eye to making mobile purchasing easy are the hallmarks of the leaders in mobile commerce.

A prime example is Apple Inc., the leading Mobile 500 merchant. Apple upgraded its App Store this year with enhanced search capabilities and a new wish list feature, and updated iTunes by adding the ability to redeem Apple gift cards by snapping a picture of a card with an iPhone's camera. One of Apple's keys to mobile success is its extremely quick checkout. A consumer making a mobile purchase in iTunes, iBooks or the App Store only needs to enter her iTunes password; Apple then uses the billing and payment information stored in the consumer's iTunes account.

Consumer-friendly touches like these will help Apple grow its m-commerce sales by nearly 25% to $8.4 billion this year, Internet Retailer estimates. That includes $2.0 billion from consumers buying music and video content from iTunes, $4.0 billion in App Store sales, and $1.0 billion in iBookstore sales. Remaining mobile sales come from Apple software and the merchant's iAd program.

Right behind Apple is Amazon.com (No. 2), whose mobile commerce sales will increase 100% to $8.0 billion in 2013. Continuous innovation is the key to Amazon's success. For example, earlier this year Amazon launched Mobile Associates API, or application programming interface, which enables mobile app developers to sell physical goods within their apps via Amazon; developers get up to a 6% cut of sales.

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