Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Retailers put more money and thought into mobile commerce.
Mobile commerce Luddites are becoming harder to find among retailers, as more merchants focus on making it easy for consumers to shop via their smartphones and tablets.
Internet Retailer's latest survey on mobile commerce finds that 78.8% of responding retailers view mobile commerce as very important. That's a significant increase from 58.8% who said so last year.
The survey also shows that mobile commerce sales are rising and retailers are spending more money to build their mobile commerce sites and apps. Thirty-eight web-only retailers, 17 retail chains, seven consumer brand manufacturers and four catalog/call center companies responded to the online survey fielded in July and August.
The results suggest that mobile commerce is becoming a bigger part of the business for many retailers as they become more adept and experienced at marketing and selling to consumers who are using smartphones and tablets.
Lighting retailer Pegasus Lighting, No. 465 in the recently published Internet Retailer 2014 Mobile 500, says its mobile sales will grow 140% this year, putting it among the 16.7% of retailer respondents that expect mobile sales growth to exceed 100%. Pegasus Lighting projects its m-commerce sales will reach $300,000 in 2013, up from $125,000 in 2012.
Sales that originate from smartphones and tablets account for 10% of all revenue for the lighting retailer. "We didn't expect it to be that much by now," says Chris Johnson, vice president and chief information officer. Pegasus Lighting's m-commerce site debuted two years ago at m.PegasusLighting.com.
Retailers overall are becoming more bullish on the prospects of mobile sales, with a greater percentage expecting strong mobile sales growth. The survey found that only 15.2% of retailer respondents expect their m-commerce sales to grow 0% to 10% this year, down from 26.3% who expected the same in 2012. 22.7% expect 11% to 25% growth in 2013, up from 17.5% last year; 15.2% expect 26% to 50% growth, down slightly from 17.5% last year; 16.7% expect 51% to 100% growth, up from 15.0% in 2012; 16.7% expect 101% to 200% growth this year, up from just 7.5% in 2012; and 7.6% expect more than 200% growth, up from 6.3% in 2012. Only 6.1% expect flat m-commerce sales with none forecasting decreases in 2013. Last year, 8.6% predicted flat sales and 1.3% projected decreases.
This growth is spurring retailers to consider new ways to present their wares to consumers using smartphones and tablets. Most Mobile 500 retailers—461—have dedicated mobile sites, like that of Pegasus Lighting, where the URL uses the m.example.com format. Those sites typically are designed specifically for smartphones.
However, with more consumers using phones as well as tablets, and mobile devices coming in a wider range of screen sizes, many retailers are considering an option known as responsive design. That approach lets retailers build one site on a single code base and a single set of web content that detects the size of the screen of a device requesting a page, and delivers a page designed to fit. That way a retailer can design a single site that renders well on computers, tablets and mobile phones. Only 39 of the Mobile 500—7.8%—use responsive design technology today, but the survey results suggest that may be changing. The survey found that 20.9% of respondents intend to implement responsive design this year; 28.4% of them said they already use it.
Fathead LLC, which sells sports and custom graphics, adopted responsive design in October 2012, says Michael Layne, the retailer's director of Internet marketing. That's had a big impact on traffic and sales, Layne says. In the first half of 2013, Fathead's smartphone traffic alone was up 275%, and its smartphone sales rose 500%, he says. Fathead's overall 2013 m-commerce sales are projected to be $3.90 million, a 74.1% increase from $2.24 million in 2012. Fathead is No. 320 in the Mobile 500.
Not all retailers are keen on responsive design, with some, like WebUndies, No. 458, holding off for now. "I don't know if responsive design is a bridge," says Terri Hunsinger, partner at the retailer. Mobile web technology is moving quickly, she says, noting that WebUndies will probably use responsive design when its site vendor, ShopSite Inc., adopts it. ShopSite says that version of its shopping cart should be available by the end of the year.
At Pegasus Lighting, Johnson says he'll probably consider responsive design the next time the e-retailer is ready to redesign the web site, but that won't happen for another two years or so. "That's a massive redesign of the web site as well as how the content is coded," Johnson says.
While mobile shoppers are looking at varying screen sizes, they're mostly using devices based on two types of software: Apple Inc.'s iOS and Google Inc.'s Android.
Retailers that took the survey said that greater percentages of their mobile traffic came from consumers using iOS devices, like iPhones and iPads, than those using Android-powered smartphones and tablets.
In the survey, 16.6% of respondents said 0% to 20% of their mobile traffic came from iOS devices; 19.7% said 21% to 40%; 16.7% said 41% to 60%; 33.4% said 61% to 80%; and 13.6% said 81% to 100%.
In comparison, 36.4% of them said 0% to 20% of their traffic came from Android devices; 48.5% said 21% to 40%; 9.1% said 41% to 60%; 4.5% said 61% to 80%; and 1.5% said 81% to 100%.
The difference is more pronounced among tablet users, says Chris Boomhower, e-commerce director at Jewelry Warehouse Inc., which sells University of South Carolina merchandise on its GarnetandBlackTraditions.com e-commerce site. Close to 90% of the tablets consumers use to visit his site are iPads, he says, though the Android share appears to be growing.
The way the iOS platform works can affect the features a retailer can put on their mobile sites. For example, Fathead cannot easily offer custom products via uploaded images to iOS users because the operating system doesn't recognize image files the same way that Android or Windows does, Layne says. Fathead wants to, but Layne says it's something the retailer must figure a way around.