Source: Flickr user 2 dogs
The mobile industry is a fast-moving space where hype usually outpaces true performance by a substantial margin. But mobile commerce – the business of conducting transactions on the mobile phone – is gaining real traction, and much of that is being driven by the mobile web. So while downloadable smartphone applications are the hottest thing in mobile, retailers looking to hawk their stuff to on-the-go users need to make wireless web sites their top priority.
“Mobile commerce” is an overly broad term: it includes everything from buying and downloading apps and content (a wildly successful space thanks to the emergence of the iPhone) to the concept of using a phone as a kind of credit card at the retail counter (a segment that has yet to grow legs despite plenty of investment). But another segment is quietly generating money: selling physical goods to consumers over the mobile web. And that’s a potentially huge industry.
Need proof? eBay is gunning for a whopping $1.5 billion in mobile sales this year after generating $600 million in wireless last year on more than 1.5 million items. Amazon doesn’t break out its wireless business, but the massive online retailer’s mobile site saw 3.5 billion unique visitors in the first three quarters of 2009, according to Nielsen, second only to eBay among vendors of real-world stuff. Those figures echo an annual survey from Deloitte last year that found that one in five consumers intended to use their mobile phones to shop during the 2009 holiday season; 25 percent of those said they intended to make purchases on their phones.
Of course, many mobile purchases of real-world goods are being conducted through handset-specific apps that provide a highly optimized user experience. Indeed, roughly 60 percent of eBay’s mobile sales stemmed from its iPhone app; the remaining 40 percent were generated on the mobile web. (eBay didn’t launch an Android app until February 2010.) But as Gartner analyst Nick Jones noted earlier this year, building an iPhone application isn’t a surefire path to success. Some offerings are plagued with performance problems or inadequate functionality, and many simply aren’t much better than a mobile site.
More importantly, mobile applications by definition can address only a small fraction of the potential market. The iPhone accounted for only 16.6 percent of worldwide smartphone shipments in the fourth quarter of 2009, according to ABI Research, and Strategy Analytics pegged the iPhone’s share of the overall handset market at a mere 3 percent. Meanwhile, it’s difficult – if not impossible – to find a mobile phone on retail shelves that doesn’t have at least a rudimentary browser. While some of those feature phone browsers sometimes deliver a disappointing user experience, vendors can minimize those limitations by developing clean, simple mobile pages that require minimal data transmissions.
And as Keynote Systems’ Nisheeth Mohan recently pointed out, mobile web storefronts can be just as innovative as smartphone applications. J.C. Penney’s site enables users to opt in to receive mobile alerts as well as “wake-up calls” on key shopping days. Blockbuster’s mobile destination effectively serves as a stripped-down version of its PC site, allowing users to browse titles, check the top 100 rentals and add movies to their queues.
Retailers still have tremendous opportunities to use downloadable applications to target smartphone owners, who are far more likely to make purchases over the phone than their feature phone–toting counterparts. And building an effective mobile storefront for physical goods presents some formidable challenges of its own: retailers must often develop multiple sites in order to serve both the lowest common denominator (low-end feature phones) and more sophisticated handsets.
Drawing traffic to a mobile site can be difficult, and payment systems must be as simple as they are secure. But consumers with a wide variety of handsets are finally tuning into the mobile web to comparison shop, get product information and close the deal. Vendors who make it easy for them to do those things will watch their mobile sales ramp up dramatically.