Article

Shopping with the click of a mobile phone button

Mobile commerce enables one-to-one relationships, and attracts incremental customers.

March 17, 2010

Consumers want technology that makes their lives easier and quickly bought into the idea of shopping and transacting online, which burgeoned in 1995 with the debut of Amazon.com. Retailers seized a significant opportunity to reach customers even when their stores were closed.

But as consumers move beyond the confines of their computers in exchange for mobile lifestyles, retailers once again have a new and exciting channel to reach consumers — this time through a marketplace that is always on, always available, always with you and location aware. The key to a successful mobile strategy is to avoid thinking of mobile as an extension of online and to take full advantage of its unique characteristics to drive incremental sales and door swings.

A majority (59 percent) of consumers say they’re interested in using their phone as they would a credit or debit card at the cash register to make a purchase, according to research conducted in June 2009. Consumers also report interest in using their mobile phones for accessing credit card details, balances and transactions (61 percent) and organizing and tracking their gift card, loyalty and reward accounts (59 percent).

With the right application, merchants can push relevant and demographically-targeted content to consumers who are ready to transact. This includes offers targeted to individual buying preferences. Occasionally, though, retailers can frustrate the consumer experience when they fail to understand the complexity facing multiple brand interactions through mobile technologies such as SMS, WAP and native applications. If consumers become frustrated with their mobile brand interactions, then retailers run the risk of not only missing out on incremental sales promised by this channel, but suffering additional losses from potential brand alienation beyond mobile.

A good way to reach the mobile consumer is through a common user interface — a marketplace that allows consumers to find multiple brands through a single mobile experience. This point of connection complements pre-existing e-commerce channels, enabling brands to develop relationships with their most loyal consumers, but more importantly with new consumers that they might have otherwise missed.

Three-quarters (75 percent) of U.S. adults wish there was an alternative to carrying wallets stuffed with credit cards, loyalty cards, gift cards, offers and receipts. Nearly two-thirds (62 percent) say they’re likely to download and use a mobile managing solution that would allow them to organize and track their account information. The value of this mobile approach for the retailer goes beyond the convenience of replacing the physical contents of the wallet with digital contents on the mobile. Today, retailers have no way to know when a consumer possesses a physical gift card in a wallet. But a mobile commerce provider will know, opening the doorway for the retailer to make offers, allow redemptions and other transactions. Marketing to the gift card holder with relevant offers will help drive that consumer to use their card and improve retailer door swings.

Some retailers may have initial concerns with this solution because it exposes loyal customers to brand competitors. However, failure to participate in such consumer-preferred experiences could result in lost opportunities to reach new consumers and actually increase loyalty membership.

As a marketplace for m-commerce, a mobile retail channel becomes the wireless version of a mall. Consumers drawn to a department store at a traditional mall might also stop at a smaller shop and vice versa. The same applies to the mobile channel. The wireless marketplace extends retailers’ reach to new consumers, thereby driving incremental sales and increasing mobile door swings.

Bob Metzler is the vice president for retail and merchant services at Firethorn Holdings, LLC, a Qualcomm subsidiary that designs mobile applications. He can be reached at rmetzler@qualcomm.com. (Photo by Marco Arment.)