Ride the Rocketship: Developing an m-Commerce Strategy

Companies that start actively developing an m-commerce strategy, rather than the more common ad-hoc approach to mobile that many use today, will separate themselves from their competitors as they place themselves as leaders in the mobile space. Meeting the challenge of converting mobile shoppers into purchasers is one critical path towards achieving that differentiation.

As e-commerce continues its rapid annual growth, many companies have no strategic plan to share in a key component of increased online spending – mobile commerce, or m-commerce. comScore found that the rate of m-commerce growth exceeds both e-commerce and bricks-and-mortar shops. Goldman Sachs predicts the trend of m-commerce driving e-commerce numbers will continue as global m-commerce charges upwards to $626 billion by 2018. Different estimates value the U.S. m-commerce market in the $130 billion range by 2018, and making up anywhere between a quarter and a third of all online sales.

The fundamental challenge to developing an m-commerce strategy is how a company shapes its m-commerce presence as a direct revenue source, not a marketing cost center.

Many people are already shopping on their mobile devices. Nearly 40 percent of current retail website visits are made on a mobile device. E-commerce giant Amazon saw over half their consumers shop on a mobile device in Q4 2013. A majority of mobile shoppers have purchase intent, but most of them are making the actual purchase offline. From product research to showrooming to reading online reviews, a lot of shopping activity is occurring on mobile devices. Meaning, mobile shopping isn't synonymous with mobile purchasing. However, a lot can happen between visits to multiple retailer sites, and then again before walking through a storefront.

The lag between mobile device shoppers and purchasers points to two opportunities for companies that want to be part of the predicted boom in m-commerce sales.

1. Companies that can convert mobile shoppers to purchasers and close the sale on their mobile devices.
2. Retailers develop mobile applications that substantially improve the in-store experience.

Let's take a closer look at each opportunity:

Converting Mobile Shoppers: The m-Commerce Experience Differs from the e-Commerce Experience

Smartphone shoppers outnumber tablet shoppers, but the tablet users buy more often with a higher sales value. This discrepancy may well be explained by the difference in the user experience between the two devices. Obviously, a tablet has more space to show products, descriptions, comparisons, and provide a cleaner checkout process.

Potential smartphone purchasers are put-off by common points of friction during an online checkout process that are exacerbated from the lack of space a smartphone screen provides. Other points of friction particular to the small screen.

• Unclear direction on how to start purchasing, which includes ambiguous shopping cart buttons and confusion whether the user had to register with a site or could purchase as a guest.
• Lack of context for what data needs to be entered and where they are in the checkout process.
• Potential data entry errors.
• Fear of data loss already entered.

Companies that design smartphone applications or websites with the intention of smoothing out and improving the purchasing experience stand the better chance of converting shoppers into purchasers. The m-commerce space is new enough that there's not yet a broad list of best practices, but clear communication is key to reducing the potential frustration of doing a lot of data entry on a smartphone. For example, smartphone purchasers will be helped by:

• Obvious shopping cart button that's consistent throughout so shoppers see what they expect in their cart once they're ready to purchase.
• Clear labeling that provides context, e.g. "Billing Address: Street" instead of "Street."
• Labels that sit above fields and having long fields, so users can see both the label and all the data they're entering in that field at the same time, which should reduce data entry errors.
• Disabling auto correct.
• Data input validation, such as forcing date entry through a visual calendar or having a format mask on the phone field so users don't have to guess what number separator will be accepted.
• Avoiding unexpected page reloads that scare users into thinking their data has been lost.
• Provide clear message that data already entered will be retained if they decide to "keep shopping."

The cost to a company of a bad smartphone purchasing experience is greater than the loss of a single sale. The likelihood that the user will continue to return to the smartphone to purchase is low, to say nothing of the bad word of mouth for the brand that may result. Therefore, companies that don't address the unique design and user needs of a smartphone shopper separately from their PC purchasers are losing out on mobile device sales.

Whether using responsive design to convert a desktop shopping site is sufficient will depend on the complexity of the shopping site and the quality of configuration options in a responsive tool. A very large and/or complex shopping site may well benefit from a standalone mobile site, even with the attendant costs of maintaining two separate sales platforms. Building an app is another option to create a smartphone-specific purchasing experience.

Using Mobile to Motivate Shoppers In-Store with an Improved Purchasing Experience

While converting mobile device shoppers into mobile device purchasers is the most direct way to capture m-commerce revenue, it shouldn't overshadow the opportunities of using mobile devices to motivate in-store sales. The question bricks-and-mortar stores need to answer is how to convert showroomers when they have them in the store.

According to Columbia Business School in its recently issued examination on showroomer behavior, nearly two-thirds of whom the report describes as "mobile-assisted shoppers" said they value the shopping experience, and half of those specifically said they prefer the in-store experience. Therefore, there's a potential m-commerce market to be found for those companies that can combine the mobile-device and broader shopping experience in a positive way for the purchaser.

Some of its findings on what motivated in-store purchases by mobile-assisted shoppers include:

• Discounts, either for a specific product or on an entire purchase.
• Receiving free sample product with a purchase
  enjoying perks generally associated with online shopping, like free delivery.
• Providing a benefits-based loyalty program.
• Seeing helpful online reviews or advice from someone they knew.

Many of these motivators can be most dynamically delivered via mobile devices. An in-store app can provide additional product information, positive online reviews, and special discounts/offers with a code swipe or easy search mechanism.

What's been successful for your company in turning mobile shoppers into purchasers?