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Mobile commerce is erasing the line between online and in-person shopping. I've been looking at the growth of this market and ways retailers are building their m-commerce future.

Retailers are seeing mobile shopping skyrocket. Mobile commerce sales in the US in 2008 were $400m. That number quadrupled to $1.20bn in 2009, and then doubled to $3.4bn in 2010. 

Growth for 2011 promises to be nothing but explosive...

Who’s riding the mobile commerce train?

According to a recent ForeSee study of nearly 10,000 visitors to the biggest e-commerce websites in the US, over half of mobile shoppers used their phones to compare price information (56%). Shoppers also used their phones to compare different products (46%), to look up product specifications (35%), and to view product reviews (27%).

Who among us hasn’t checked stood in a bookstore and checked their retail price against Amazon, and perhaps deferred a purchase by adding it to their “wish list”?

And for those of you following tablet computing, here’s the amazing part: visits to retail sites via the iPad outnumber other mobile devices, even the iPhone. Let’s put this in perspective, this device that entered the market just over a year ago is now a leading commerce platform.

Why the shift in user behavior?

In short, the combination of useful apps and easy, instant access to information through mobile devices is ingraining computing in to new sets of daily tasks in users lives. My earlier post, Did You Take That iPad to Bed With You?, describes this shift and the size of this opportunity in our industry.

eBay proves mobile makes sense

Perhaps the most well known example of turning mobile browsers into buyers is eBay, which launched its first application for Apple’s iPhone in July 2008 and has since continued to ramp up its mobile commerce initiatives.

Its core iPhone application, which is available free via iTunes in eight languages and 190 countries, has been downloaded more than 30m times and lets users browse and buy without leaving the application.

The eBay application for the iPad delivers a tablet-optimized shopping experience to browse and buy a plethora of auctioned items. Its suite of mobile applications, including Selling, Classifieds, StubHub and Deals, are designed to make selling and buying possible virtually anywhere, anytime.

The strategy works, eBay announced earlier this year that global mobile sales generated nearly $2bn in 2010, up from $600m in 2009

The in-store experience gets turned upside down

Thanks to a number of new and innovative apps, the traditional brick-and-mortar experience is getting revamped. For the better, in my opinion.

Comparison shopping

Consumers have access to a number of apps that allow them to scan product barcodes while in the store to look for pricing and availability at competitor online and retail store locations. These include apps such as Red Laser, Scandit, Shop Savvy, etc.

The consumer now has real time information that directly impacts their purchase decision and gives them real bartering capability.

For example, I was in the market for a new mattress. I was able to pull up price comparisons for the desired Simmons Beautyrest Luxury Firm mattress, show it to the sales person and asked “what can you do on your price? I’d like to give you my business, but only if you can be more in line with your competition.” Who wouldn’t sleep better knowing they got the best deal?

Social Commerce

 Product recommendations have always been a commerce driver, but with the advent of social networks we’re seeing the rise of “social commerce”.

Beyond just reading recommendations and sharing opinions on social networks, retailers are using social networking tools to boost retail sales as a speedier identity and authentication mechanism.

Facebook Connect allows retailers to integrate the social network’s Like button on their sites. It also allows e-commerce operators to give consumers the option to sign in at e-retail sites using their Facebook log-in information, which means consumers can feed information back and forth between the e-retail site and Facebook.

According to a survey, two-thirds of online retailers said they offered or planned to offer visitors the ability to use their Facebook log-ons on their e-commerce sites.

In-store apps

 Retailers are also catching on to the use of applications and SMS programs designed to drive traffic to mobile and in-store destinations.

Old Navy just recently partnered with Shazam to promote its spring advertising campaign called Old Navy Records. When customers enter any Old Navy location they can use the Shazam app to access exclusive Old Navy deals, styling tips, video and other music content from their handsets.

Whenever an Old Navy Records song or video is playing, Shazam users can tag it by holding their mobile device towards where the song is playing. Once tagged, users can get access to key looks featured in the songs.

Mobile point-of-sale (The Holy Grail)

With great speculation that 2011 will be the year of the “mobile wallet,” Starbucks, Guess and Disney are all jumping into the mobile point-of-sale (POS) arena.

Starbucks’ new app allows customers to manage a Starbucks Card account, check balances, reload a card and check reward status. To make a purchase, shoppers hold the mobile device in front of a scanner on the countertop and scan the Starbucks Card Mobile App’s on-screen barcode.

Guess and Disney will both roll out mobile POS systems this year enabling store staff to use personalized data to assist customers and to execute sales right at the rack. Better client experience, more closed sales and lower set-up costs ($500 vs. $3,500 dedicated register) = $$$ cha ching!

Just this week Google announced it is adding-in near field payment technology to its Nexus handset. This will turn the mobile device in to an e-wallet and allow consumers to pay by tapping their handset on one of several thousand Google payment terminals.

This is being tested in New York and San Francisco. Look for this platform to take on payment, couponing, even loyalty programs.

Almost every aspect of the in-store experience has been influenced by mobile technology. And I haven’t even mentioned the proliferation and impact of mobile ads, influencing shoppers even before a product need has surfaced. We’re seeing the start of a fully convergent online and in-person shopping experience.

In my next post we’ll take a look at how one of Europe’s largest food retailers is putting mobile commerce to use.

Dave Wieneke

Published 24 March, 2011 by Dave Wieneke

Dave Wieneke leads Digital Strategy at ISITE Design, and is a graduate lecturer on Digital Marketing at Northeastern University. He writes on the future of digital marketing at UsefulArts.us and he can be reached through Twitter and LinkedIn

 

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Comments (3)

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kilim

cool

over 5 years ago

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No Win No Fee

I see it happening too, with the advent of RFID tags and the like. Mobile media could take off where your wallet, phone, cards & passport left off.

I am surprised by the lack of RFID on the New iPad 2, so I bet it's still a few years away yet, Apple's normally at the front.

over 5 years ago

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Marissa Lowman

I believe 2011 will be the year of the mobile wallet. The key will be for retailers to make sure they can market mobile payments as an added value to shopping and prove that they will actually make customers’ lives easier. Examples of added value could include targeted advertising and special offers.

over 5 years ago

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