By Tim Dunn

The growth in smartphone penetration, faster mobile Internet connections and proliferating mobile applications have created a perfect storm where the mobile user experience is massively improved.

One consequence of this is the profound effect on consumers’ browsing habits. Morgan Stanley predicts that by 2013 mobile devices will overtake PCs as the preferred way of accessing the Internet.

Figuring out a mobile strategy for retail brands can be daunting and sooner or later retailers will have to make well-informed technology decisions about how to tackle mobile commerce.

Strategy focus
Two routes to market have taken hold: applications and optimizing sites for the mobile Web. Both have a role to play, so why a mobile strategy in the first place?

Firstly, your audience is already trying to find you through mobile devices.

More than 10 percent of women and 17.9 percent of men ages 13-44 have tried to browse an online store using their mobile handset, per comScore.

So it follows that the Web site should be optimized for the mobile Internet.

In another YouGov survey, 25 percent of consumers said if they cannot browse their preferred retailer’s Web site via their mobile device, they would look for a competitor and never try to access that site again.

Consumer enthusiasm and engagement with mobile commerce is also growing.

ABI research predicts that mobile commerce will grow to $119 billion by 2015 in the United States. This market is growing solidly in Europe and is expected to outpace the U.S. by the end of 2010.

Payments are going mobile, too.

PayPal recently announced that it has seen a six-fold growth in mobile transactions from $25 million in 2008 to $141 million in 2009 and it is comfortably predicting that it will end 2010 with more than $500 million in mobile payment volume, and 5 million-plus members regularly using PayPal from mobile devices.

Analyst firm Juniper Research is also indicating that mobile transactions are taking hold, predicting that the total value of mobile payments around the world will quadruple from $170 billion in 2010 to $630 billion in 2014. I will just repeat that: $170 billion in 2010 to $630 billion in 2014.

Enable app or optimize ecommerce site?
So back to the question: Do I create a mobile commerce-enabled application or simply optimize my ecommerce site for the mobile Web?

Each channel has benefits and given the rise in mobile browsing, it goes without saying that all retail brands should make sure they have a mobile site provisioned, but not at the expense of creating an application.

It should be remembered that although applications are perceived as being just for iPhone and Google devices, in fact the opposite is true.

Nearly every handset can support applications written in Java or BREW.

Plus, there are major initiatives from Nokia (Ovi), Samsung (Bada), Microsoft (Marketplace) and BlackBerry (App World) that are growing rapidly.

For example, Ovi is now delivering more than 1.7 million application downloads per day, with users averaging 12 items each. The whole of the mobile industry is behind applications, so retail brands should be also.

More than this, the download of an application is a positive statement of intent to interact with the brand.

Once downloaded the brand lives as a piece of valuable real estate on a user’s device.

From a mobile Internet perspective, the behavior of bookmarking mobile sites on phones is nowhere near as popular but an application is a bookmark in itself.

At the heart of applications is the mobile user experience.

Devices are getting smarter all the time, and you simply cannot yet serve the best experience through the mobile Web.

An application can create this experience, and make the brand unique, rather than being just another shopping channel, while still pulling in Web content so that the products are front of mind.

Application users on iPhone and Android represent the most affluent target demographic imaginable, so why not give them the best experience possible right now?

Tim Dunn is director of strategy at Mobile Interactive Group, London. Reach him at [email protected].