Five Reasons Retailers Need to be Mobile for the Holidays

By Dave Sikora — November 12, 2010

The holiday season is quickly approaching and retailers are already beginning to prepare for the busy shopping season. For the first time ever, mobile commerce will be a top priority for retailers—and for good reason. According to Canalysis, more than 65 million smartphones are to ship in 2010 in North America. A recent Mobile Access 2010 report from the Pew Internet & American Life Project (http://pewinternet.org//media/Files/Reports/2010/PIP_Mobile_Access_2010.pdf) states that nine in ten young adults aged 18 to 29 own a cell phone and that these young cell owners are the most likely to engage in mobile data applications. The study also found that 20% of 18- to 29-year-olds make purchases on their mobile phones.
 
The prevalence of smartphones and the increase in the use of mobile data applications by consumers points to the fact that this year’s holiday season, and well into 2011, is going to see the largest increase in mobile shopping to date. Experian’s 2010 Holiday Marketer report (http://www.experian.com/assets/marketing-services/reports/2010-holiday-marketer.pdf) found that mobile commerce activity has increased 13%, up from 10% in 2009. Their findings state that 13% of consumers purchase products, 22% of consumers check prices and 21% research products—all from their smartphones. Even more, Experian’s survey gathered that 22% of consumers expect to purchase items from their mobile phones in the next 12 months.
 
As consumers begin to contemplate gift shopping for the holidays, mobile commerce will likely have a significant impact on their decisions on where and how to make their purchases. Retailers should adapt to their customers’ behavior and begin to prepare for this increasingly popular new channel—if they haven’t already. If you are a retailer, and have not considered going mobile yet before the holidays or for 2011, perhaps the following trends might sway your decision:
 
Smartphones are becoming the norm. In the second quarter of 2010, many U.S. consumers visited mobile websites: 37% using the iPhone, 29% with the iTouch, 13%on BlackBerry and 12%using Android phones. Studies show that these types of devices are rapidly growing while others are declining in market share.
Mobile web launches and mobile commerce sales are growing, and fast. Make no mistake about it, the numbers are growing rapidly. According to Mark Beccue, senior analyst at ABI Research (and reported by Internet Retailer), it’s estimated by 2015 that shoppers from around the world will spend about $119 billion on goods and services bought via their mobile phones. In the United States alone, mobile shopping rose from $396 million in 2008 to $1.2 billion in 2009. ABI Research forecasts U.S. sales to reach about $2.2 billion in 2010.
Mobile promotions bump purchase rates. Many retailers find that offering promotions unique to their mobile website significantly increases purchase rates. For example, if a consumer electronics store launches a promotion that offers a special discount for computer games purchased through their mobile site, more customers will make the transition from viewing the games on their mobile phones to purchasing those games via their mobile phones.
Using rich applications, customers are more loyal, buy more often and at a higher average purchase price than with mobile web. Rich applications for iPhone, iPod Touch, BlackBerry and Android devices provide a seamless and simple method for browsing and purchasing products on mobile phones. Imagine that customer Greg is a frequent patron of an outdoors and recreation retailer. Greg is far from home when he realizes he needs a new tent for his upcoming camping trip. He has already downloaded the retailer’s rich app on his iPhone, so he uses it to find and purchase the tent, which he’ll pick up when he is back in town. By providing Greg with a simple and convenient method of shopping, the retailer has cemented Greg’s loyalty to the brand. Now Greg is more likely to shop here because he doesn’t have to search around online—he just opens the app, purchases his items and he’s finished.
Mobile is the 4th channel. Increasingly, retailers are integrating mobile commerce into their businesses as a strategic 4th channel that can help bring more value to their desktop/laptop website, in-store and catalog channels.
 
This holiday season and beyond, mobile commerce will have an unprecedented presence in the shopping channel.
 
Many well-known U.S. retail brands such as 1-800 Flowers, Toys “R” Us, Godiva and Wet Seal already offer their customers a more enjoyable, user-friendly shopping experience through unique mobile commerce sites. Today’s consumer expects to be able to shop any time, anywhere, and will do their holiday shopping via mobile commerce sites on the smartphone. Competition for consumers’ shopping dollars and loyalty is fierce—don’t get left in the wake of the growing demand for mobile web and rich app commerce. Go mobile today.
Dave Sikora is CEO of Digby

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