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Dell exec: Mobile is enabling more frequent purchases

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December 6, 2012

Dell expects mobile to be more competitive next year

Mobile commerce sales will increase significantly next year, according to industry experts who participated in a Mobile Commerce Daily webinar yesterday.

During the “Mobile Commerce Outlook 2013: Up, Down or Flat?” webinar, participants discussed the biggest lessons learned in 2012 and what merchants can expect from mobile in the year ahead. Given that more companies continue to recognize the significant potential in mobile, merchants should expect greater competition in this space next year.

“I really think it is about increased competition,” said Brandon McGee, director of global mobile at Dell, Round Rock, TX.

“Mobile is just going to move up and up on the priority list of executives,” he said. “We are going to see more sophisticated product and larger investments.

“It means more competition for us. It has been fairly easy to grow by 2x or 3x year-over-year but as others catch up and continue to evolve, it is going to make for a tougher landscape.”

2013’s breakout star
In the year ahead, retailers, brands and financial services can expect mobile adoption and use to continue to grow as well as for users to become increasingly sophisticated in how they engage with their mobile devices. This means a continued increase in the number of multichannel, multi-device consumers and growing use of mobile to compare prices, research products and make purchases.

Additionally, more consumers are expected to gain an understanding of the value of mobile payments and how to use mobile coupons.

Users will also increasingly expect greater utility and a more tailored mobile experience.

Next year could see one or more mobile channels become a breakout star, including tablets and mobile video.

Tablet use is poised to grow significantly, helping to drive growth in categories such as online travel and bricks-and-mortar retailers.

Much of this tablet usage will be via apps, but Web is vital, too, especially for customer acquisition,” said Ryan Kowalczyk, director of product strategy, Orbitz, Chicago. “While retailers with a bricks-and-mortar presence will also see this trend, I think an additional trend will be increased in-store usage of mobile devices.”

Mobile video consumption is already growing a quick pace, with 25 percent of YouTube videos being watched on mobile devices as of September 2012. The growth in tablet penetration should drive even further video consumption. This means it will be even more important for marketers to take a screen agnostic approach to media planning and buying.

Additionally, HTML5-based responsive design will grow in importance as marketers look for ways to address the need to offer a consistent experience across devices and operating systems.

The changing shopper
Mobile is changing the shopper in numerous ways, including giving them the ability to shop anytime, anywhere. As a result, the lag time between inspiration and action is decreased and shopping is becoming more dynamic with consumers able to purchase on their terms, which is driving trends such as comparison shopping and deal seeking.

The changes in shopping behavior are providing retailers a chance to reach consumers with flash sales. For example, Orbitz offers last-minute, mobile-only hotel deals of up to 50 percent off.

Mobile also opens the door for serving offers to nearby consumers by leveraging geo-location technology.

“The mobile phone, even more so that the tablet, really gives the customer the ability to save time and money and I believe that is why mobile commerce has grown so quickly,” Dell’s Mr. McGee said.

“You can walk into a store and can find the best price for that day at that moment without jumping in the car and driving all over the town,” he said.

“Mobile is also enabling more frequent purchase. If you look at Rue La La, those types of solutions have really changed consumers’ behavior so they may purchase something everyday throughout the holiday season.”

The threat of showrooming
Showrooming is a concern for retailers that is likely to grow throughout the current holiday season and into next year. Using mobile to compare prices in stores may be a tough phenomenon to stop for commodity products for retailers who are not focused on being the lowest-cost provider.

One way to address this is for retailers to take advantage of when shoppers are in their stores by providing a compelling offer to close the sale in-store. Price matching policies and enhanced customer service are also key factors for addressing showrooming.

 “Showrooming is not a threat, it is a fact of life,” said Jim Thomas, product marketing manager at Fiksu, Boston. “Whether it is good or bad for your business, you cannot stop it.

“So your best bet is to offer a mobile experience that is great for your customers, and extends beyond your sales floor,” he said.

“Effective app marketing will lead to your customers using your app while in-store, instead of generic Web searches or aggregators.”

Surprise!
Since mobile is still a young and evolving industry, the coming year could hold several surprises for merchants. For example, savvy merchants need to pay attention to how powerful players such as Apple and Google continue to fine-tune their mobile strategy because these moves could have significant implications.

For Dell’s Mr. McGee, the possibility of the company being the target of malicious apps is one of the potential surprises that keep him worried. Another is the possibility that regulators may target mobile with new rules relating to privacy and how this may impact business.

Merchants may also find themselves caught off guard by new types of competition in the form of new mobile-only competitors or previous partners who now want to compete directly in mobile.

“Competitors who take advantage of more of the latest software and hardware features in their apps – or take advantage of them more quickly than you – can gain competitive advantage, especially if Apple/Google feature these apps in their app stores or other marketing,” Orbitz’ Mr. Kowalczyk said. “Are you participating in Passbook for iPhone? What if Apple extends Siri to your space?”

Other surprises next year could include advances in measurement and transparency in targeting and a surge in Facebook’s importance.

One potential surprise is that 2013 is the year Facebook finally breaks out in the mobile space,” Fiksu’s Mr. Thomas said. “They are trying so many things that something will stick, and when it does, look out.”

Lessons learned
Merchants learned several important lessons in mobile this year, including the need to actively market apps and to optimize their Web site for the growing tablet audience.  

Responsive design caught on this year as merchants recognize the need to be device and operating-system agnostic.

Additionally, marketers gained a deeper understanding of when and why to build an app.

Many also began to recognize that mobile traffic trends are becoming more predictable and are putting expected mobile events in their calendars so they can react.

“In most cases, it does not make sense to build a proprietary app unless you have a differentiated service or utility to provide,” said Erin Houg, media director at Starcom.

Crafting a strategy
Savvy merchants will be looking for ways to better integrate mobile into their multichannel strategy next year. For example, with mobile increasingly popular in the research phase, it is important to allow consumers an easy way to save their progress across devices if the purchase will ultimately be made via desktop.

This can be as simple as allowing consumers to email links to themselves or as complex as allowing them to create wish lists on mobile that can be accessed later through a PC,” Orbitz’ Mr. Kowalczyk said. “And there are obviously ways to create shortcuts back to product information on mobile when the research was done on mobile and the purchase is done at a physical store rather than via a desktop Web site.

Mobile should also be integral to communications plans as it can contribute across the funnel, whether the goal is to drive awareness or an immediate action.

What not to do
However merchants decide to integrate mobile in their efforts next year, it is important they do not ignore mobile Web and tablet optimization of their desktop site even with all the attention being paid to apps.

In terms of app, merchants should also be sure to not ignore marketing their apps to drive downloads.

Merchants should not rely on overall device market share to drive decisions on which platforms to support. This means knowing where their customer base and target customers are now, as well as where they are headed.

It will also be important to not be invasive and annoying on mobile, as it is the most personal touch point available.

“Always execute mobile with the consumer experience in mind by taking proper care to ensure that users are opting in, especially for video or geo-fenced messages,” Starcom’s Ms. Houg said.

“From a macro perspective, don’t think about mobile as a tactical line item on a flowchart,” she said. “It has grown beyond that now.

“No one asks what the desktop plan is.  Mobile is a strategic choice as a platform for accelerating marketing and infrastructure.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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