StorefrontBacktalk: M-Commerce Looks Healthy for the Holidays – But Not That Healthy
Through a special arrangement, presented here for discussion is a summary of a current article from StorefrontBacktalk, a site tracking retail technology, e-commerce and mobile commerce.
‘Tis the season for mobile-commerce hype: On Tuesday (Nov. 8), Sybase and the Mobile Marketing Association announced that, according to an October survey, 62 percent of consumers are “poised to make purchases with their mobile devices this holiday season.” Well, sort of. In fact, the survey of 1,000 consumers offers a slightly grimmer view of m-commerce: Only 22 percent actually plan to use a mobile phone to buy anything — and that includes people who will just phone a retailer’s call center and order that way.
How are the numeric differences justified? The 62 percent actually said that if retailers offered coupons, discounts, gift cards, loyalty points or e-mail alerts, those things would “influence” their decision, not that they would actually make an m-commerce purchase. And that number also includes just-call-in-an-order customers, which the survey says is the form of “mobile commerce” that has been used by more consumers than any other (28 percent have done it).
Indeed, depending on the source, the definitions of mobile payment run the gamut from legitimate ones — actual mobile purchases, in addition to find store, product research, QR/barcode scans, price comparisons and mobile coupons — to not so legitimate ones, such as using an Android to call a call center. But the only figure that your bosses will see are purchases made directly from the phone. At StorefrontBacktalk, we’re projecting that — at most — eight to 12 percent of consumers will make true mobile purchases this year.
The overwhelmingly strongest factor that will determine mobile transactions will be the creativity and aggressiveness of this season’s m-commerce incentives. You want to make a lot of your customers earnestly experiment with m-commerce? Offer a 20 percent discount if a purchase is made via mobile compared with in-store or on the traditional web. Delivering a coupon? Make it for $50 instead of 50 cents.
Mobile transactions are still going to be, for most customers, a significant behavioral change. Set expectations appropriately for your senior management, but remember that also includes funding marketing incentives to push your customers out of their comfort zones. Once they discover the ease of well-executed mobile transactions (and you wouldn’t offer any other type, right?), the incentives can certainly be scaled back. But if you’re conservative and cheap this season, you’ll find it ten times harder to change customer behavior next year. Displease them now with low-ball discounts and flood them with irrelevant offers, and you may find yourself not even making realistic projections.
- M-Commerce Looks Healthy For The Holidays – But Not That Healthy – StorefrontBacktalk
- 62% Of Consumers Are Poised To Make Purchases With Their Mobile Devices This Holiday Season, According To Survey From Sybase 365 – Mobile Marketing Association
Discussion Questions: What level of incentives do you think retailers will have to offer to get consumers to try m-commerce this holiday season? What other steps should retailers be making to ensure positive trials?
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8 Comments on "StorefrontBacktalk: M-Commerce Looks Healthy for the Holidays – But Not That Healthy"
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Thanks for deconstructing the hype. The other one will be how online sales grew by 80% — when actual percentage of all retail sales is much much lower.
Madison Avenue was able to sell that smoking was healthy and lawn darts were safe. Hype is nothing new; mobile is just the latest flavor. It’s just that now, to get trial, they believe discounting must be the hook. Giving a better deal on a phone is a slippery slope to becoming a showroom.
It totally depends on the retailer in terms of what the required offer is to drive m-commerce this holiday. For those already established on mobile as a platform, especially for payments (e.g., Starbucks, Amazon), it’s not going to take much. Starbucks, for example, already gets 25% of its sales through its private tender and an increasing amount of that through its mobile app.
Our view is that mobile commerce, both for holiday and beyond, is largely a function of customer relationships that have begun to “root” in mobile as a channel. Without a foundational relationship in the mobile channel, it’s going to be a greater leap required of the customer. When mobile becomes an app-driven form of payment, as with Starbucks, it’s a lot easier.
At this point, mobile devices are probably best employed as mechanisms to drive traffic to retail, to drive engagement with brands, and to offer competitive deals when a customer is comparing products on a handheld. Actually purchasing on a mobile device is the least of it.
Having retailers talk about m-commerce doesn’t mean that customers are going to use it, at least not this year. After there’s a breakout success story, expect improved numbers.
Mobile retail will become an integral part of retail. But, not this year. Perhaps the term grim is overstated or premature. It’s not a failure. The issue is behavioral, and we’re just not there yet.