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Retailers unprepared for inevitable consumer demand for mcommerce: study

April 20, 2011

EBay has a 360-degree mobile strategy that spans SMS, mobile Web, mobile apps and more

Although the vast majority of retailers – 87 percent – understand the impact that mobile commerce will have on shopping behavior, a mere 16 percent have a strategy in place, according to a study by Kony Solutions.

Kony found that consumers are eager to reap the benefits – convenience and cost savings – of mobile commerce. These were among the key findings of a mobile retail trend study that Kony conducted in Britain.

“Retailers know mobile is critical yet they aren’t able to do what they know they need to do,” said David Eads, head of product marketing at Kony. “We think the mobile chaos is a major challenge for retailers.

“Some retailers are investing heavily in mobile,” he said. “But those that aren’t will be at a significant competitive disadvantage.”

Kony’s research was conducted by Vanson Bourne. It reveals that 42 percent of retailers understand that mobile commerce has already had an impact on consumer shopping behavior.

A whopping 89 percent believe mobile will be as popular as ecommerce.

What is more surprising than the fact that less than one in five retailers surveyed reported having a mobile strategy fully in place is that almost a third have no plans to implement one at all.

Overall, the results of the study highlight a discrepancy between retailers’ anticipation of the impact of mobile and the strategies that they currently have in place, or lack thereof, to facilitate this demand.

Channels for mobile strategy
Mobile applications are the most critical mobile commerce channel, according to 45 percent of retailers that were surveyed for this study.

Also, 40 percent believe the mobile Web is the most critical.

Surprisingly, only 10 percent named SMS as the most critical component of an mcommerce strategy.

On average, retailers expect to spend 21 percent of their budget on the development and implementation of a mobile strategy, but notably 10 percent are already investing between 40-50 percent of their budget into mobile.

Fragmentation of the mobile market is proving to be a challenge for retailers, as consumer preferences and demands are varied based on the mobile platform they use.

One thing is clear, however. Consumers prefer using their mobile device as they are shopping, with 60 percent claiming to use the mobile Internet to make decisions in-store or while shopping online.

Also, 40 percent use mobile applications to aid in the shopping decision and 37 percent use a combination of the two.

Retailers are eager to enter the near field communication space, the Kony study found. In fact, 57 percent of retailers surveyed are considering the technology as part of their overall mobile strategy, citing competitive pressures and customer demand as key drivers for this decision.

A quarter of consumers already want to pay for items in-store via their mobile devices as opposed to using cards or cash, despite the low awareness of the technology among consumers. Convenience is the top reason for using mobile payments, with 59 percent of consumers saying that.

However, security concerns are impeding the growth of mobile payments, with 39 percent of consumers reporting that this is the top reason they do not want to pay with their mobile device.

“Mobile is increasingly how retailers are differentiating themselves,” Mr. Eads said. “Just like we saw with ecommerce, the mobile experience increasingly will determine the retailers fate – especially since mobile affects sales in all channels, including bricks-and-mortar.

“Retailers should have a well-thought-out mobile strategy that reaches customers no matter what device they use,” he said. “Customers are spread across a wide variety of devices and retailers can’t pick and choose platforms and be successful.

“Furthermore retailers need the agility to experiment with conversion improvements and be able to rapidly implement conversion improvements in all channels.”

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Giselle Tsirulnik is senior editor at Mobile Commerce Daily and Mobile Marketer. Reach her at

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