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Mobile drives incremental sales from on-the-go consumers: panel

August 25, 2009

mobicommerceNEW YORK – Mobile commerce is the next frontier of retail, targeting on-the-go consumers for impulse purchases, according to a panel at last week’s Mobile Commerce Spotlight, co-hosted by Mobile Marketer and the DMA.

The mobile channel has the potential to not only complement ecommerce, but also drive incremental revenue for products or services with which the consumer may have familiarity. Also, better browsers and all-you-can-eat data plans for smartphones are fuelling an increase in shopping-related searches, thus adding a mobile element to retail store sales.

“There are 270 million mobile phones in U.S., and 150 million of those have sent an SMS, which is about 70 percent off the installed base,” said E. Jay Emmet, general manager for OpenMarket and senior vice president for Amdocs. “Approximately 60 million have engaged at least one mobile Web interaction, and carriers are looking to push uptake in functionality.

“About 20 percent of mobile consumers have been to a mobile Web site, so we’re still in the very early stages, but we are on the cusp of a break-through,” he said.

OpenMarket is an infrastructure provider connecting third-party merchants with 25 carriers nationwide. It has noticed the effect that the iPhone has had on mobile commerce.

“The iPhone has had a dramatic effect on the burst of interest in the mobile Web,” Mr. Emmet said.

“Even though there are 6 million iPhone users, it’s drawn a lot of attention and executive interest, and they’re saying in meetings, ‘Why don’t we have an iPhone app?’ which shows the recognition the iPhone is getting,” he said.

“We’re seeing more sophisticated phones, big screens and QWERTY keyboards—those are the major things contributing to a much more usable interaction with consumers at a high level. This is not a technology play, it’s a usability play—how do you use the mobile channel to add a complementary aspect to your current business to create interaction with consumers?

There was widespread optimism that the mobile industry will withstand and outlast the current recession.

“I have not seen the economy effect mobile usage negatively, because people may not be going to Disneyland, but they are going to the movies and they are using their mobile phones,” Mr. Emmet said. “We’ve seen a 12 percent lift in messaging in the past year, and CTIA says messaging doubled in the last year.

“Messaging has the widest reach—until 2D bar codes are ubiquitous and works regardless of handset or carrier, it will be niche and won’t reach the mass market,” he said.

The panelists agreed that mobile commerce via mobile banner ads, mobile sites and mobile email is the smart way to go for retailers and sellers of content and services.

However, there was disagreement about the best use cases for SMS and the viability of point-of-sale integration with 2D bar codes.

Also, there was disagreement about whether or not mobile applications will have long-standing effect on mobile commerce.

“Here’s my advice: Get clients to focus on SMS as a great medium for communication and promotion—text-to-win can be very successful—but no one’s going to be buying products via SMS, because it’s not transaction- or content-focused,” said Jonathan Bulkeley, CEO of Scanbuy, New York.

“WAP is where most retailers will go, because browsers will be universal and the experience will improve, so take what clients are doing on the wired Web and get it on WAP as soon as possible,” he said.

“Downloadable apps are a fad, because I’m going to download a few apps, but not 20 or 30. If you’re a rabid fan, you’re going to download an app, but I think apps are a bit of a dead-end unless you have a really rabid audience and a really targeted demographic you’re going after.”

As a provider of 2D bar codes, Scanbuy acknowledges that the United States is lagging behind other markets such as Japan, where consumers use their phone’s camera as a navigation mechanism to get information and content. But Mr. Bulkeley believes that the domestic market will catch up.

“2D bar codes are not going to be mobile coupons any time soon, so use alpha-numeric characters, because POS scanners in the U.S. are not going to read bar codes for the next couple of years,” Mr. Bulkeley said. “It’s a new trend, although in U.S. it’s going slow, but 2D bar codes will be important for retail.

“You can scan a 2D bar code in store and it tells you when and where product originated, or you can read a 2D bar code that connects to a specified URL such as a product page for a specific product with specs, customer reviews and a buy icon,” he said. “They have your credit card and your address stored, you click once and it shows up at your house.

“Sprint announced the first phones in the U.S. with the 2D bar code software embedded, and it is still early, but for brands it’s worth being innovative, and two years from now all phones from the major carriers will have a 2D bar code scanner application preinstalled.”

The bottom line is each brand has different needs and objectives, and different campaigns are best suited to a different mix of mobile channels.

The debate over applications, 2D bar codes and SMS aside, no one argues that mobile will not be an integral part of retailers’ strategy going forward.

“Retailers are spending hundreds of millions of dollars to get a better share of consumers’ wallets, but the case for mobile is really simple—80 percent of the U.S. population has a mobile device in their hand,” said Steve Timpson, chief operating officer of Siteminis, Atlanta.

“Cell phones moved to the number one accessory in 2007, and no one leaves the house without their keys, wallet and cell phone,” he said.

“Apple is marketing the iPhone heavily, creating an awareness among executive teams about what can be done in the mobile channel, and while iPhones represent a small percentage of the actual appliances out there, it’s a large percentage of mobile Web usage. Mobile is a legitimate channel to talk to your customer base and expand your customer base, so to not be in the game is a strategic and tactical error.

“It’s about multichannel marketing. If companies are not investing in mobile, they’re going to be behind the eight ball, because it’s going to grow exponentially.”

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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