No longer just shrinking web sites, retailers focus on mobile design.
Don Davis , Editor in Chief
In phase one of the mobile revolution, retailers pared down their e-commerce sites so consumers could easily navigate them and purchase on the smaller screens of smartphones. Now a second phase is underway in which retailers are offering features on mobile phones and tablets never seen on web sites designed for computers.
That second phase was much in evidence at last month's Internet Retailer Mobile Marketing & Commerce Forum in San Diego. Speakers described many features they're offering only on mobile devices. For example, eBay Inc. has tailored its RedLaser mobile app for retail chain Best Buy Co. so that when a shopper walks into a Best Buy store he sees specials just for that store, including deals on open-box items. Walgreen Co. lets customers scan prescription bottles with their phones to quickly orders refills. On Wine.com's iPad app, consumers can spin four wheels on the home page to find the wine they want, then see a map pop up showing where in the world the winery is located.
"It's very fun, very immersive, and very different from anything we ever did before," Cam Fortin, senior director of product development at Wine.com, told conference attendees.
That's the kind of mobile-first thinking Julie Ask, an analyst at Forrester Research Inc., advocated in her presentation. "Get rid of the PC paradigm," Ask said. "You can't just shrink and squeeze your web sites for mobile, you've got do things differently. Mobile first means designing for mobile from the ground up."
What's more, discarding the PC mindset will be increasingly crucial as mobile technology evolves in the next few years, Ask said. She predicted smartphones will soon have two front-facing cameras, enabling them to estimate depth. That will allow her to point her phone at the refrigerator in her soon-to-be renovated kitchen—which she showed attendees in a photo—and get a listing of refrigerators that would fit that space, with her fridge's dimensions calculated by the phone. Keynote speaker Steve Yankovich, eBay's vice president of mobile, envisioned a day when he will be able to hold his phone up in a store and, through the technology known as augmented reality, see lit up just the products that fit him from brands he likes.
"There's no question that's what we're looking at, and it's not too far away," Yankovich said in his keynote speech.
Bring them back
Yankovich emphasized the fast pace of change in mobile commerce, and described eBay's approach as "get something out and learn." In the last three years, he said, eBay has invested in mobile commerce sites and apps for all the major smartphone platforms, as well as acquiring companies, like the maker of the RedLaser app that, in its standard configuration, lets shoppers scan bar codes with their phones to obtain price and other product information from web sites like eBay.com.
Yankovich anticipates the Best Buy version of RedLaser will one day let a shopper with the app on his phone page a Best Buy employee for help in a store, and will eventually integrate with Facebook so that the employee will see the shopper's picture and be able to recognize and greet him by name. Many more retail chains will be using customized versions of RedLaser, Yankovich said, although he did not name them.
EBay's mobile investments are paying off, Yankovich reported. He said eBay will sell $10 billion worth of merchandise worldwide through mobile devices, double last year's mobile sales. The online marketplace sells 9,000 cars a week through mobile—including at least one sports car that sold for more than $1 million, showing consumers' growing comfort with buying anything from their mobile devices, he said.
As evidence that shoppers like eBay's apps he pointed to their more than 100 million downloads. And eBay's mobile users are showing off their apps to friends, helping eBay attract nearly 1 million new customers via mobile in the past year, and reengage 1 million more that had stopped shopping on eBay. "It's a customer acquisition channel," he said.
And it's a channel where little changes make a difference, eBay has learned. For example, when it moved the Buy It Now button on its mobile site above the fold, the conversion rate jumped 30%. "We were just dumbfounded," Yankovich said.
He said eBay has also learned that mobile consumers engage with it in short bursts throughout the day, a behavior he called "snacking." Consumers will pull out their phones while walking from one meeting to another or while waiting for a traffic light to change, for example. With that in mind, eBay focuses on making it easy to complete a transaction, preferably with thumbs only. Posting an item for sale on eBay via a mobile device, for instance, takes 46 seconds and just a few taps and thumb swipes. "The question is," Yankovich said, "what can you do at a stoplight?"
Stripping down to the essentials is crucial for mobile, agreed Sam Shank, CEO and co-founder of Hotel Tonight, an app that lets consumers quickly book hotel rooms for same-day stays, but only on iPhones and Android devices, not on the PC web.
How fast can travelers book? Eight seconds, Shank told the conference, just three taps and a swipe. And that includes a final page in which the consumer must trace the Hotel Tonight logo, a line drawing of a bed, to confirm the booking. He first suggested requiring the consumer to enter his initials to confirm, but his developers came up with the tracing idea that takes advantage of the phone's touchscreen and reinforces the company's logo.
Shank emphasized the importance of understanding what mobile consumers need. While taking out much of the information standard on hotel sites, the HotelTonight app instead tells travelers how late they can order room service and where they can park.
His mobile mindset extends to a focus on the app's ratings in the iPhone App Store and the Android equivalent, Google Play. Shank says he starts every company meeting by looking at the first review in the App Store and by reviewing the app's overall rating, because that's crucial for attracting more mobile users. "Keeping a focus on the App Store rating is paramount," he said.
A bigger competitor, online travel company Orbitz Worldwide Inc., is working its way back from mediocre rankings for its initial apps. It now has a team that focuses on apps independent from the group responsible for e-commerce. "We recognized we're competing with startups focused solely on mobile," Chris Brown, vice president of product strategy, told the conference in a featured presentation. He noted Orbitz now generates 20% of its sales from mobile devices, up from 2% two years ago.
Lots to learn
Walgreens also is seeing plenty of business move to mobile, including 40% of online prescription refills, director of mobile commerce Tim McCauley told the conference. Walgreens' app guides consumers to the items they want in store aisles, reminds them of items on their wish list about to go off sale and lets shoppers store coupons and rewards points from the company's newly launched Balance Rewards program.
The drugstore chain can more easily apply discounts from mobile phones at checkout because it's equipped its more than 8,000 stores with laser scanners that, unlike conventional bar code scanners, can read a coupon on the screen of a mobile phone. But redeeming coupons from phones is something new, and McCauley said Walgreens has learned it's best if both the customer and the clerk can see the instructions on how to do it. "Lots of times the customer will help the cashier," he said.
As pretty much everything is new when it comes to mobile commerce and marketing, speakers reported several other usability insights they've gained recently. Faced with drop-down menus for selecting shoes sizes and colors, iPad users will frequently depart, reported Scott Cohn, vice president of merchandising and sales at BakerShoes.com, part of Bakers Footwear Group; the e-retailer is switching to buttons for choosing those options. When Dell Inc. optimized its e-mails to fit the screens of smartphones, visits and revenue increased five to 10 times, Brandon McGee, Dell's global mobile director, told the conference.
Don't look back
As they move farther away from replicas of their PC web sites, many retailers are tweaking their mobile sites and apps regularly. HSN Inc. makes changes at least monthly, Ed Deutscher, operating vice president of emerging platforms, said in his presentation. One new innovation puts two rectangles on the mobile home page that shoppers can swipe through with their fingers to see recently aired offers on HSN's TV shopping network and today's top deals.
In April, HSN introduced live chat just for its mobile shoppers, enabling them to ask questions about products on the air, including of the hosts and their guests.
Blinds.com also is offering mobile consumers help with its augmented reality feature, available in its mobile app, which lets consumers snap a picture of a window in their home and then see how a set of blinds would look there. To make it easier, a consumer can snap a photo with her smartphone, e-mail it to Blinds.com and a customer service agent will get back to her within five minutes with an image of the blinds on the window, said Stephanie Pertuit, online marketing manager at Blinds.com.
Rue La La, which gets more than 37% of its sales from mobile phones and tablets, has added a feature to its iPhone app called Right Now that shows shoppers what's just been sold on the flash-sale site and, in the case of items close to selling out, how many are left. "It creates a little theater for people," said Tom Weisand, vice president of user experience. Shoppers that engage with Right Now are 30% more likely to buy than others, he said.
All these mobile-only features are proof many retailers are taking to heart Yankovich's call for creative thinking. "Innovation is not about looking at what's already happening," the eBay executive told attendees at the Mobile Marketing & Commerce Forum. "Mobile is the place to be bold."
Many retailers and travel companies are taking that advice, and no doubt many more will follow.
Showrooming: Are stores ready for the battle ahead?
Some call it showrooming when a shopper goes to a store to see a product, then buys it online, something consumers now can do right from the store with their smartphones. Nikki Baird has a more colorful take on this developing battle between store and web retailers: "This will be a knife fight in the aisles."
It's one stores are losing through ineptitude, Baird, managing partner at research and consulting firm Retail Systems Research, told attendees at the Mobile Marketing & Commerce Forum. She contrasted the lack of information typically available in stores about items like toasters with the wealth of information on e-commerce sites, where consumers can access product reviews and consumer ratings, and check out a broad selection.
"Store retailers suck when it comes to combating showrooming," she said. "Best Buy maybe trains employees to run up to anyone who pulls out a phone, but that's it." (Best Buy Co. and Target Corp. both announced last month they would for the first time match the prices of online retailers in certain cases.)
She advised store retailers to provide more information on their shelves. For example, a display of toasters could direct customers to scan one QR code for information about four-slice toasters available but not on display and another for two-slice toasters. "That tells customers there's a lot more to me than what's in my store," she said.
She also offered a tip for web retailers. She said stores often attract shoppers with low prices on items like flat-screen TVs, hoping to make money selling such accessories as cables and mounts at full price.
That's why 75% of shoppers who go online to compare prices in stores buy in the store the first item they check—the on-sale TV, for instance, she said, citing data from ShopSavvy, provider of a mobile price-comparison app. But the second item? 50% buy it elsewhere, the ShopSavvy data show.
For web retailers, she said, that means, "it's not the big-screen TV where you're going to steal customers. It's the cables, DVDs, all the other stuff companies like Best Buy are trying to make money on where you have the opportunity to steal that customer away."
Some retail chains are realizing they need to act to combat showrooming, including Sears Holdings Corp., whose senior vice president and general manager for e-commerce, Imran Jooma, spoke at the mobile conference.
He described how Sears this year gave employees in 450 Sears and Kmart stores iPads and iPod Touches (devices like iPhones except they can't make calls) so that they can show customers online product information and reviews and, if the shopper decides to buy, check them out on the spot. Associates also can collect the shopper's e-mail address so that, even before she leaves the store, she can receive on her smartphone her receipt—and information about product manuals and related items.
If she doesn't purchase, Jooma said, the employee can e-mail her a recap of items she viewed, paving the way for further engagement with that shopper.
He described the Sears strategy as integrated retail that "combines the pluses of the physical world—the ability to talk to a knowledgeable sales associate, the ability to touch, feel and possibly try on the item—with the pluses of the digital world—being able to look up rich production information, compare products and look at prices. When you combine those pluses together, that's what customers are looking for."