Retail TouchPoints: Mobile Phones Emerging As Fourth Sales Channel

Discussion
Jun 12, 2008

By Andrew Gaffney

Through a special arrangement, what follows is an excerpt of a current article from the Retail TouchPoints website, presented here for discussion.

Mobile devices are quickly emerging as a fourth sales channel for retailers, according to a new study from Cisco Systems. The company’s third annual e-commerce study found that the rise of social networking and advanced mobile technologies has redefined the online experience and is enabling retailers to capture new sources of revenue by implementing mobile strategies.

Conducted by the Cisco Internet Business Solutions Group (IBSG), the study assessed 45 retailers from North America and Europe in three categories (Global 500, Web 15 and Innovators). While many retailers have viewed e-commerce and mobile applications as separate discussions, the study pointed out that providing mobile access will become part of the e-commerce experience.

“Customers will soon expect to use their mobile devices to find stores, research products, make purchases, and manage their accounts,” the study stated. “In anticipation of this market opportunity, retailers should evaluate mobile and multi-channel strategies that allow customers to access retail product information anytime, from any device.”

Currently, there are three times as many mobile-phone subscribers (3.3 billion) as Internet users (1.3 billion) worldwide. Cisco expects mobile commerce to follow an adoption pattern similar to that of cell phones. Early retail adopters are already finding ways to factor the mobile phone into multi-channel service delivery. For the more basic mobile offering, retailers are using SMS (Short Message Service) to communicate promotions, provide a two-way service for customers’ questions, and offer item availability and delivery updates. The Cisco IBSG survey found that:

  • Forty-two percent of retailers provide the ability to view product information on a mobile device through reformatted web pages or specific mobile pages;
  • Fifteen percent offer the ability to conduct transactions (make purchases, complete inventory queries, etc.);
  • Ten percent are using SMS to provide information or answers to customers’ questions;
  • Six percent have web pages and a URL specifically designed for mobile use.

In addition, the study pointed out that with the rise of social networking, web-based multimedia, and mobile commerce, retailers can now select from a broad range of technologies to reach customers.

The Cisco IBSG survey of e-commerce sites found:

  • Seventeen percent provide the capability to connect to communities of interest;
  • Fifty-two percent provide customer reviews for products;
  • Fifty percent have advanced visualization tools;
  • Fifty percent provide multimedia such as video;
  • Fifty percent offer customer support through multiple channels, such as click-to-chat.

Discussion Questions: Do you agree that mobile phones will eventually be viewed as a fourth sales channel for retailers? Should retailers already be doing much more to link e-commerce and mobile applications? How should retailers be preparing for this opportunity?

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13 Comments on "Retail TouchPoints: Mobile Phones Emerging As Fourth Sales Channel"


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Laura Davis-Taylor
Guest
Laura Davis-Taylor
13 years 11 months ago

It’s a natural assumption that mobile phones are going to ramp up to be all this and more in the future. After all, it’s the one technology device that almost all shoppers carry on their body. But the retail industry still has the pesky challenge in that many customers don’t reliably receive cell phone service in brick-and-mortar stores. This can be addressed with wireless reception “boosters” but it may take a bit of time.

Nikki Baird
Guest
Nikki Baird
13 years 11 months ago

Well, as I’m sitting here at the Internet Retailer conference on mCommerce, I have to say that I think the answer is yes. Retailers who have younger customers are already getting there today – check out Moosejaw’s mobile site at m.moosejaw.com as but one example. (Do that from your phone’s browser!)

But the important take-away I’m hearing is that while it is a “fourth channel,” mobile is less of an independent channel than even eCommerce has been. Because it can be location or context specific, there are more opportunities for mCommerce to serve as a bridge between other channels, than there is for mobile as a channel by itself.

David Biernbaum
Guest
13 years 11 months ago

Mobile Phones have already emerged as a fourth channel which, within the next 36 to 48 months, will be fully utilized for retail advertising, marketing, and promotion.

Max Goldberg
Guest
13 years 11 months ago

It will take time, but mobile phones will become more important to consumers when making buying decisions and retailers need to be prepared to accommodate this technology. Just as they adjusted to and then adopted the Internet as a sales vehicle (a ten year process), retailers will figure out how to use mobile technology to advertise, accept payment and cause social interaction.

The key problem now is knowing which mobile technologies will stick with consumers. This is still a rather nascent market, despite the widespread use of mobile phones. I look forward to seeing how the mobile marketplace develops.

Doron Levy
Guest
Doron Levy
13 years 11 months ago

Absolutely! The major telcos here in Canada are investing heavily in mobile phone content. As technology improves, it will be easier for customers to access content on their mobile devices. That opens up a world of opportunities for retailers to jump on board and sell their products and services to subscribers.

We need to move beyond airline and movie tickets. How about a text message reminding us that Valentine’s Day is a week away and include a link to a store that sells gifts that are appropriate? That would be a lifesaver for me personally! The ideas are virtually endless. The mobile sales channel is a huge growth opp for any retailer that can come up with a sleek and practical interface.

Mel Kleiman
Guest
13 years 11 months ago

I think the numbers in the article already answer the questions. 1.3 billion Internet users and 3.3 billion mobil phone users.

The question is not if it will happen, it’s how fast? If there is a channel out there that the consumer uses to receive information, the retail world will figure out how to use it.

Janis Cram
Guest
Janis Cram
13 years 11 months ago

I used to work for Omnipoint (which became VoiceStream which became T-Mobile) and I remember the thrill of introducing the world to text messaging! Each generation learns more and more technology and becomes dependent on it so it’s just a matter of time until the cell phone becomes the end all for all communication/shopping needs.

Dan Desmarais
Guest
Dan Desmarais
13 years 11 months ago

America has been kept so far behind the rest of the world with their mobile phones because of the carriers’ insistence to depreciate their digital networks before adopting the reality of a 3G network.

Perhaps Steve Jobbs will continue his ways and teach the rest of the technology to keep things simple, yet effective and usable by most of the world without a user’s manual.

James Tenser
Guest
13 years 11 months ago

As the numbers above indicate, for most of the world, mobile phones are the primary means of interacting with the World Wide Web. In Asia and Europe, the latest phone models incorporate electronic wallets and may be used to make payments at retail like a stored-value card. Advertising and mobile commerce are natural follow-ons. Roll in various types of social media channels and the smart phone becomes the user’s personal dashboard and communications center for all things life-related.

Only here in “backwards” USA are such technologies lagging. American businesses would do well to consider the evolution of their present go-to-market models in the context of these developments. It’s coming upon us with all the inevitability of a tsunami.

Anne Bieler
Guest
Anne Bieler
13 years 11 months ago

Definitely–mobile phones will become another channel to connect directly with interested shoppers. Product and retailer information helps consumers decide when and where to shop, making shopping trips more productive. Mobile couponing is another step–consumers choose the products they want with technology like Cellfire then cash-in at checkout with loyalty cards. Another way to highlights special promotions, eliminate coupon hassle and open another channel for retailers to develop with an engaged shopper. There are enough savvy shoppers out there for marketers seriously consider mobile phone channels in their planning.

Herb Sorensen, Ph.D.
Guest
13 years 11 months ago
In addition to general location of the cell phone through tracking relative to cell towers, inclusion of more targeted tracking, such as GPS within the phone, will become ubiquitous. Then there are the RFID reader chips and other technologies going into phones that will permit location specific communication with shoppers in the aisles of stores. It is not the same thing as VideoCart-Shopping Buddy-MediaCart, but there will be a very rapid adoption of this technology globally, in the near future. It depends on what the word “near” means. The bottom line is that the internet is moving into the store, which will fully blend online/offline retailing. Most players are focusing on advertising in a contextually appropriate way. However, retailing itself WILL be altered to a VERY great extent by this. The offline store will increasingly become a “big head” enterprise (think Stew Leonard’s, HEB Central Market and Tesco’s Fresh & Easy.”) But Chris Anderson’s vision of the “long tail” will take on added relevance, as, for example, supermarkets learn to distinctly manage their center-of-store long… Read more »
Alex Har
Guest
Alex Har
13 years 11 months ago
In the Asia, SMS is popularly used to promote products and services, and to announce events. This is because, other than in Korea and Japan, smart phones (because of the cost) are held by a relatively small percentage of the population. Mobile phones certainly provide a lot of convenience as they are personal and with the person constantly. However, the devices up till now have a lot of limitations in terms of interface. They have come a long way, as is mentioned by other commentators; the younger people with deft fingers and good eyesight are already catching on. Most still find data-utilities daunting. The ability to easily project images onto external surfaces, without going through a whole cumbersome process, and voice command capabilities will add to the capability of the device to act as a sales channel. The most crucial issue will be one of security and privacy. E-mails are pretty much blocked out today, and pretty ineffective as advertising, as a result of intensive and persistent spamming. I would see mobile developing as a… Read more »
Mark Lilien
Guest
13 years 11 months ago

Want to know any retail organization’s IQ? Ask how what year they started e-commerce on the internet. Number of e-commerce years is directly proportional to a retailer’s intelligence and ability to embrace change.

Want confirmation of that IQ test? Ask for the mobile phone e-commerce timetable.

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