The survey finds product recommendations accessible via mobile devices as a huge opportunity for retailers, with 65 percent of those surveyed saying they would make purchases were it easier to find products of interest.  Retailers heeding this advice will implement mobile-accessible product reviews and recommendations based on factors such as real time inputs by a consumer (looking for a plasma screen TV, what are my options?) and historical transaction data if available (purchased TV in the past, suggest a DVD player).

A potential battleground retailers need to keep eyes on is the mobile product reviews/recommendations/comparison space.  On one hand, retailers can develop branded mobile experiences for their customers that are essentially “closed” environments by virtue of product selection limited to that one retailer.  Combined with clever engagement strategies such as mobile promotions, this can effectively combat third parties that aggregate product information, prices and reviews across retailers.

These services could render retail store environments as mere “pick up” spots for products browsed, reviewed, and compared by mobile shoppers.  The retail sector may be in store for a complete shift in power unless mobile engagement strategies rise to the top of marketing plans and priorities.

The article concludes with this statement, making it sound as if retailers attempting to create engaging shopping experiences raise their hands in surrender:

“Consumers will care less about where they shop and more about satisfying their purchase requirements.”

I bet you could find similar statements made about 10 years ago around how e-commerce websites would put brick and mortar stores out of business.  Yet that didn’t really happen, as brick and mortar stores such as BestBuy and others created complementary online stores.  Late to game retailers like Toys R Us paid a heavy price, however.  Why would it be any different if consumers can research and compare products while “on the go?”

One way the article suggests is that retailers will be forced to match lower prices if consumers can prove it by showing their mobile device to a cashier, or worse lose the sale as the customer leaves for another store.  Loyalty, already so hard to engender among customers, is literally out the door as a means of creating a steady flow of business.

In reality, I don’t think the situation will be this dire, but retail marketers have a new mandate to create engaging shopper environments to encourage customers to remain in store and make purchases.  Especially for considered purchases versus impulse buys, consumers will likely perform online research in advance of venturing out to stores.  Items such as plasma screen TVs or washing machines, for example.  In these instances it’s highly improbable a consumer will even perform a comparison price lookup in store because they did so already.

There will be exceptions, but I just don’t see retailers hurt too much by this trend, especially if they work hard toward creating highly engaging – and branded – mobile experiences for their customers.  Those who do will be more akin to the BestBuys of the mobile realm as opposed to the Toys R Us’.

To what extent might Android be a better m-commerce platform than the iPhone?  I’m not entirely sure, but this November 10, 2009 article on Forbes.com titled, “All Eyes On Mobile Commerce” highlighted a key difference between the iPhone and other platforms that marketers need to consider if mobile commerce is in their sights.

“Apple’s iPhone users create an iTunes account upon iPhone registration, if they did not already have one, where credit card information is stored for future one-click purchasing.  This enables over 50 million iPhone and iPod owners to purchase media or games on a mobile device, inputting their password to access their iTunes account.”

“T-Mobile, which will launch four Google Android handsets by the holiday season, has been working with Google to integrate the Android Market into its billing system by Thanksgiving.  Historically, which may or may not still be relevant, bill-to-carrier models have been less attractive to the mobile merchant due to delays in payments and the high cost.  Given the billing cycle of the operator, payments can be extended 45 days to a couple months.”

Getting paid fast is important in any transaction and so for the foreseeable future Apple’s model seems to represent an easier path toward booking revenue – for Apple at least.  You can be certain Apple is considering broadening the iTunes model to include other products given the ready-base of buyers able to transact rather simply.  Apple could become an Amazon.com like player quickly if it wanted to, slowing mobile commece on other platforms.

It’s doubtful that mobile will serve as a standalone handheld shopping cart for purchases of all kinds any time soon, given shopping behavioral differences between impulse and considered purchases.  Yet, as the article points out, all well known online stores, from Amazon to Wal-Mart, are heading in this direction, and technology vendors like IBM are gearing up their e-commece platforms for the mobile channel.

I wasn’t aware of many statistics such as these which show retailers are taking to the mobile channel very aggressively, learning a lot as they go along:

“There are 112 retailers, 58 in the Internet Retailer Top 500, with 153 m-commerce sites and/or apps.”

“North American mobile commerce sales will top $750 million this year, according to new data from emerging technologies consulting firm ABI Research.”

“Retailers in mobile commerce report consumers are not just browsing or comparing prices, they’re buying—and sales are growing. EBay, for example, reported a whopping $380 million in sales through its iPhone app and m-commerce site for the first nine months of 2009.”

“EBay’s mobile site and app combined received 5.4 million unique monthly visitors in August, according to The Nielsen Co. Amazon.com received nearly 3.5 million, Gamespot about 2.5 million, Fandango nearly 2.4 million and Netflix just over 2.2 million.”

E-commerce technology vendors are apparently scrambling to meet increasing demand for systems which can extend traditional online stores to the mobile channel.  In spite of all this action, I can’t help but question using such a loaded term as “M-Commerce” to describe the benefit to retailers.  Particualrly in light of statements like this:

“77% of retail chains see high value in mobile commerce as a way to connect the online world with physical stores, according to a new study from Retail Systems Research.  Store-based retailers view mobile as an opportunity to connect their various channels.”

“We’ve found that the mobile site is driving sales in stores…It’s keeping some customers in stores longer by giving them all this information at their fingertips.”

“…it’s still early days for mobile commerce, and most retailers are not revealing revenue figures, a sign that sales directly through the phone remain relatively modest.  But the retailers that have jumped into m-commerce are learning valuable lessons about the best designs for mobile phones, how to market to consumers through mobile devices, and the special opportunity to tie the mobile phone—which most consumers carry with them always—with in-store shopping.”

So it would seem that early adopter retailers are letting the mobile customer experience drive their approach to achieving their goals – commerce and transactions among them.  A Gartner Group Research chart in the article, shown in this post, supports that conclusion.

When retailers report mobile commerce revenue separately from other channels, as Ebay recently began doing, that is one case.  However, I suspect most retailers stand to gain the greatest benefit by viewing mobile as a powerful channel to influence consumer behavior in revenue and profit producing ways.  It’s more of a marketing problem, than of figuring out how to arm customers with mobile cash registers.  It’s about active customer engagement.

I thought the most actionable takeaway for retailers was around the urgency in moving on a mobile strategy, but doing so thoughtfully to avoid fixating on one tactic or approach, such as a mobile commerce website or application.

“Retailers must decide when—not if—they will launch m-commerce sites or apps, says m-commerce analyst Ian Fogg in a Forrester Research Inc. report titled ‘Why Mobile’s Time Has Come.’  Failure to pick the right approach now will lead to others seizing control of the new landscape that extends to every minute of consumers’ lives, 24/7.”

“Basic skills needed for mobile commerce are roughly similar to those required in e-commerce…But there are whole new sets of skills required, such as ones for developing text message marketing and mobile apps, that I.T. and other departments must research in-house or in conjunction with vendors.”

Given the escalating adoption of devices capable of providing a decent mobile web experience, the argument at first makes sense.  Yet, a lot of research tends to support mobile commerce for certain types of products not usually associated with large e-commerce stores (such as those of big retailers).   To me it’s a question of relevance given the active, on-the-go nature of a consumer.  The fact a rich mobile web may be a ways off is another consideration.

Ordering a pizza or burrito via mobile device, even choosing topings or ingredients, is today a great mobile commerce application.  It seems though that for purchasing items of greater value — considered purchases – a more thoughtful process is required which means consumers will tend to use a desktop PC — or some combination of online and in-store activity.

I think mobile commerce around considered purchases will be most effective when it’s part of a strategy focused on the mobile customer experience.  Many businesses are taking this approach successfully today and if I’m right, it suggests you won’t soon see full on e-commerce sites as stand-alone profit and loss centers anytime soon.

• “…by the end of the second quarter only about 7% of U.S. consumers bought goods or conducted financial transactions via cell phone, according to a Nielsen Mobile survey of more than 90,000 people,” but this is growing rapidly.  “In January, consultant ABI Research projected North American sales of physical goods ordered via cell phone would reach $544 million this year, up from $346 million in 2008.  Now, Mark Beccue, senior analyst at ABI, is considering updating his 2009 forecast to $800 million.”  What is interesting about this figure is that investments in mobile marketing in 2009 were forecasted at about $400M by Forrester in a July 2009 report titled “U.S. Interactive Marketing Forecast, 2009 to 2014.”  Do the math and that reflects a super high return on investment, given that the $400M figure is inclusive of all mobile marketing investment, not just that associated with commerce applications.
• Ebay and Amazon.com accounted for 70 percent of physical goods sales conducted via mobile in 2008.  If nothing else, this illustrates consumer adoption of m-commerce as a viable transaction platform, and concerns over data/credit card privacy should wane as Visa and other companies provide secure solutions optimized for mobile, as pointed out in the article.
• “By the end of 2009, about half of established retailers may have mobile Web sites, up from less than 20%.”  Given escalating adoption of Smartphones capable of providing a rich mobile web experience, retailers should reap considerable benefits.  “In the second quarter, 28% of all handsets sold in the U.S. were smartphones, up from 19% a year earlier, according to consultant NPD Group.  And more Americans will be able to gain access to the mobile Web soon.  One-third of consumers without a Web-enabled phone plan to purchase such a device within the next year, according to a survey of 3,305 U.S. consumers conducted in March…”
• Mobile is becoming the only channel that matters, in some cases replacing the traditional desktop PC.  “A large portion of the customer base is totally replacing their online experience with mobile, says Ensign of Papa John’s.  We think a lot of the times they were customers of Papa John’s [before] but ordered from other restaurants, too.  But now there’s a new convenience with Papa John’s, and we are getting a greater percentage of their purchases.”

The article concludes astutely that the development of this picture is entirely dependent on the network which connects consumers with businesses.  The “iPhone is morphing into a kind of predator parasite on the wireless network, sucking out the value and leaving networks gasping for air,” which means more than the risk of slow networks stalling m-commerce.

In the event networks play catch up mode with Smartphone adoption and usage, mobile marketers with strong ties to their on the go customers will more likely benefit from a greater share of consumer spending simply for the sake of convenience and prior experience.  For that reason, retailers and businesses of all kinds need to begin engaging their customers now in mobile dialogues based on business objectives mapped to the Mobile Customer Experience.