Is mobile over-hyped?

Through a special arrangement, presented here for discussion is an excerpt of a current article from Commerce Anywhere Blog.
Don’t get me wrong — I think mobile has and will continue to have a huge impact on the retail industry. It’s just that sometimes we get swept up by the shiny new object and neglect the basics. Less than two years ago Marc Andreessen, Netscape co-founder and famed tech investor, declared that stores were dead, yet they still typically represent more than 90 percent of a retailer’s revenue. Investments may not track contributions exactly, and that’s understandable. We just can’t let the ratio get too out-of-sync. Put another way, a meal consists of main dishes and side dishes. If the chef neglects the side dishes, the meal won’t be ruined, but the converse is not true.
After the holidays, I kept seeing stories about mobile traffic doubling or tripling, so retailers were upping their investments. But we need to put that in perspective. Even with huge growth, mobile is still not as big as PC traffic. MarketLive estimates PCs account for 56 percent of website traffic, and more importantly, 75 percent of the revenue. Average order value from PCs is higher too, according to the data.
I trust actual metrics much more than the surveys that ask questions like, "Have you purchased something from your smartphone in the last six months?" Few have not, but often they’re small, infrequent purchases so it tends to overweight the results.
And there’s a big difference between browsing and buying. Shoppers often are doing research on their mobile devices then completing the purchase on their PC. (According to a recent Monetate study, conversion rates of online shoppers using a PC are 3.41 percent vs. 2.86 percent when using a tablet and 0.92 percent when using a smartphone.) The PC has a definite advantage when it comes to conversion. From my own experience, I rarely buy on my mobile phone but split purchases between my tablet and PC. After all, today’s tablet is basically as powerful as our PCs.
So back to the original question, is mobile over-hyped? No, it’s hugely important to the retail business, and customers have come to expect top-notch experiences on their mobile devices. But don’t get distracted to the extent that the basics get underfunded. The "main dishes" of retail are what continue to bring in the majority of sales.
- Is Mobile Over-hyped? – Commerce Anywhere Blog
- Mobile’s Still Far Behind Desktop for Retail Ecommerce Revenues – eMarketer
- Smartphone Shoppers Rarely Close the Deal – Statista
Is the mobile opportunity overhyped? Do you share the author’s concerns that aggressive investments in mobile may take away from those needed for core operations?
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21 Comments on "Is mobile over-hyped?"
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The answer to the question lies in the definition of mobile. If it’s only purchases, then mobile is overhyped. If it’s research, purchases and payment, then mobile is extremely valuable and growing. Retailers need to be thinking mobile. Whether it’s optimizing websites for devices, promotions or payments, mobile is valuable and retailers need to adjust accordingly.
I think the most valuable point David makes is the importance of mobile as a browsing and research tool. While retail should continue to invest in mobile—it is important that it is invested appropriately so that we are improving the shopper experience that most users are seeking out and not building a costly app that will be rarely used.
First, let’s be sure to note that Marc is way off mark. Techy people like Marc would be destroyed if they were to shift their bits and beans careers and become retailers. Mobile is soon to be a cause of a surge in the chiropractic marketplace. It is a channel in retail and only ONE channel. It does not own retail and is living off over-hype. Core retail operations are the focus area that retailers need to keep their eyes on as retail changes. There are your hype marketing stuff—omni this and omni that—but it is all core retail that satisfies the channels. This is from product creation to planning and allocation to distro to store or other channel functions and the shopper buying!
Some retailers are addressing this the right way, and lifting their core, making it stronger while at the same time supporting mobile and other channel demands.
Any readers in the Marc camp—you are dead wrong.
The mobile device user perspective is how we need to address the question. The majority of software developers are staying with the company internet site to allow for mobile access and point-of-sale interface. Smartphones do not have the memory, speed or view for success in this environment. Companies with the necessary software are seeing better results than the ones without. Another reason for poor enrollment from smartphone users is public awareness and feedback. Smartphone users spend a fair amount of time qualifying the products and the retailer before committing their dollars.
The bulk of competitor visits are tasked with smartphones for many investigative reasons which makes abandoned carts an almost worthless parameter. A closer standalone look at mobile device successes and failures on a test that looks at with and without mobile software availability will show how much this venue has in terms of potential and could have in terms of opportunity for return on development dollars.
Let’s be sure to differentiate mobile and mobile commerce. The former is clearly an important influencer of sales in both physical and online channels. Smartphones are the ultimate shopping companion, and retailers need to acknowledge their role throughout the path to purchase.
Mobile commerce, on the other hand, still has a ways to go before becoming a true channel in its own right. With few exceptions and for most categories, the mobile commerce experience can’t come close to replicating either the desktop (or even tablet) or the in-store experience. And retail is still (or at least should be) about the experience.
Thank you Bob Phibbs for saying exactly what I have been writing for years. Technology including mobile is only a part of what we need to do in order to take care of our customers. If we don’t get it right inside the store, it doesn’t matter one bit how good your mobile platform is, period. Customer service is number one, and always will be, which is why I am a nut job for outstanding service in my store, and everyone else out there better understand this.
Technology does great things, but will never replace the human experience for the many who enjoy shopping in stores. Amazon understands this with online service, but the in-store experience will be around forever, and we all need to up our game in order to satisfy the customer or risk losing them somewhere else.
Physical stores will be relevant and actually vibrant if they begin making the necessary changes to engage the mobile customer. Some are, while others appear to be laggards. I see the growth in mobile and physical store traffic as synergistic, not mutually exclusive.
Mobile usage numbers are improving albeit from a relatively small base of retail activity. As technology and broad band access continue to improve, brick-and-mortar retailers must acknowledge and embrace mobile connectivity to their shoppers in-store as the next logical step of relevance.
As long as the recent FCC intrusion into the internet does not slow down the progress of pervasive broad band access, good things can continue to happen in-store with the mobile shopper being connected while they navigate the physical store.
Mobile is not as much overhyped as it is often mis-hyped as the end game in retailing instead of a means to the “end” of efficient customer engagement.
In short, no. Mobile is growing globally, especially in emerging markets where consumers are skipping the PC phase. Shoppers are using mobile while in stores, however that doesn’t mean that physical stores will disappear anytime soon. Shoppers will want to touch, smell and see real products and also enjoy the pastime of shopping in stores. Nevertheless, many studies show that mobile is here to stay.
Smartphone mobile has been overhyped for some time. The smartphone is more to find the store and maybe compare prices. The screen is too small and the speed too slow for in-depth research. Smartphones are replacing watches and trying to replace the wallet. Security issues will delay payment by smartphone for some time. Any investment needs to support the retailer’s target customers. If the customer is a Millennial then investment may make sense. If the customer is a senior it will be years until sufficient use will provide a payback.
I am in complete agreement with the author! It is not too hard to show double and triple digit growth when starting out, but the overall revenue dollars might not provide a reasonable ROI.
One can follow the growth of online purchasing to see the trend lines. Not too sure that mobile is not mostly cannibalization of laptop and tablet.
Mobile is more popular with certain retailers than others. And more popular with certain demographics than others. It’s still an emerging technology that has more opportunity to grow to prove benefit to both the retailer and the customer.
There are many reasons for the focus and investment in mobile. The first is growth. While mobile commerce remains small, by some estimates, it’s growing 3 times faster than the rest of eCommerce. Most rational companies invest in the channels with the highest growth and growth potential.
A second and perhaps more important reason is the crucial role that mobile has assumed in the customer experience. Mobile is the key enabler of most customer experience innovations that retailers are putting in the market from in-store wayfinding to endless aisle shopping. Mobile gives retailers the ability to stay connected to the consumer through all points on the customer journey: discovery, choosing, buying, using.
Every indicator in the numbers shown identifies what mobile is—an entry portal. Sales on laptop and desktop still lead. In particular consider the bounce rate and abandoned cart rates. However, don’t be misled; this is the entry point. If they don’t like it there they won’t transfer to their main portal of purchase—laptop or desktop. It’s the fastest growing segment in electronic devices to the extent that the numbers with a smartphone are growing exponentially.
That doesn’t mean ignore the “main dish,” what it means is get the entry portal right so they move on to the “main dish.”
Mobile development is much faster and much quicker. It’s not going to spoil your dinner!
Mobile is not overhyped. It’s in a nascent stage and as retailers and consumers learn the benefits and convenience, it will only grow exponentially. Of course it also depends on the consumer target and the category, and that will sort itself out—if it hasn’t begun to already.
Mobile is not about buying on mobile (granted I have used the Amazon app to make my share of purchases), but part of creating that connection with the shopper. Today’s shoppers are wedded to their mobile device: Apple iPhone, Apple Watch), I expect Apple wedding band next 🙂 and the ability of retailers to connect with their customers on the move will be critical.
Definitely not. Whilst I notice that the vast majority of our customers buy on a computer, around two thirds visit us, browse our website and read our newsletters on their email.
Mobile may be overrated in terms of a direct sales channel, but as an entry point to your brand and store it is incredibly important. Having a mobile optimised website is—I would say—a MUST.
As a consumer, I spend most my working day in front of a computer. I rarely sit down in front of it in my free time; I use my smartphone instead. If a site doesn’t work in mobile, is hard to navigate, slow or fails to give me the information I need about the products, I am much less likely to continue browsing the brand (unless, of course, the product is hard to get anywhere else) and will likely try somewhere else.