Mobile Commerce is Growing: Are You Ready?

Just got back from Internet Retailer's Mobile Marketing and Commerce Forum in San Diego.  Kudos to the program team for putting together an agenda that included all the hot topics and buzzwords in mobile marketing including: Mobile Apps vs. Mobile Web, M-Commerce and T-Commerce, Showrooming, Responsive Design, HTML5, 2D Codes, Augmented Reality, and Apple's new Passbook app.

Here are my ten takeaways from what I learned:

• Ad spending in the mobile channel is only 2% of total.  But  20% of holiday e-commerce sales are expected to be done via mobile devices.  There is huge room for improvement in mobile advertising.
• More proof that retailers need to focus their attention on the mobile shopping experience:  the click-through-rate on mobile devices is 2X-5X higher than from desktop computers, but the conversion rate is 3x-4x lower. 
• More indicators that shopping is going mobile:  Purchases from tablets are up 200% and purchases from smartphones are up 100% from previous year.  At the same time, purchases from desktops are down 20%.
• 78% of smartphone owners use their devices during in-store purchases.  But most consumers don't "showroom" as their main shopping behavior.  They only do it when the in-store experience fails them.
• 75% of first items scanned on a smartphone in-store are purchased in the same store.  Is showrooming really a problem, or it is just an urban myth?
• Mobile apps vs. Mobile Web?  The answer is "both" not "either-or."  With space on smartphones at a premium, mobile apps are for loyal customers.  Mobile web is great for acquiring new customers.
• A seamless and easy mobile payment experience will make or break a mobile shopping app.  Easy checkout can give 30% lift to sales made from mobile devices.
• Augmented Reality isn't just for walking down the street and seeing where all your Facebook peeps are within eyesight.  It also provides an effective in-home shopping experience for the right products.  Some retailers are experimenting with this technology to showcase their catalog of curtains, window blinds, artwork, and furniture as they would virtually appear within the shopper's own home.
• HTML5 and Pinterest-esque layouts are two factors that will be driving the next generation of web sites.  "Design first for the tablet - then for everything else" was one common theme.
• Consumers aren't shy about buying from mobile devices.  Case in point: $1095 Lasik Surgery package purchased on Groupon from a mobile device.

Mobile Apps vs. Mobile Web - Why Not Both

Mobile Apps versus Mobile Web: which provides the better consumer experience?

Mobile Apps provide a much richer user experience, allowing the app publishers to leverage many capabilities of the mobile operating system including geo-positioning, direct in-app commerce, gyroscopic sensors, the camera, and much more.

Mobile Web provides a much richer degree of ubiquity and it's a heck of a lot cheaper. Back in the late '90s, web browsers introduced a new paradigm shift in application development in which browser-based SaaS became a better model over the native Mac vs. Windows vs. UNIX vs. SunOS challenge existing at that time. Thanks to the mobile web and upcoming HTML5, the similar challenge of native iOS vs. Android vs. RIM vs. Windows goes by the wayside.

A recent study from Nielsen indicates that retail web sites are more popular than retail apps by approximately 2 to 1, and that Amazon.com is THE most popular web site of all. 

By why does it have to be an either/or proposition? Why can't the mobile web and mobile apps coexist in a complimentary manner?

This is the very conclusion that panelists of a recent webinar co-sponsored by Mobile Marketer and Fiksu. Brands represented included JetBlue Airways, Staples, Fiksu, and ESPN.

So just how do the mobile web and mobile apps play together? Here are some tips that the panelists presented:

Advantage Mobile Web:
Here are three cases where mobile web is your better option:

• Content that needs to be fresh and up to date - It's easier to update a web site than it is to update an app and to expect users to constantly re-install the latest version
• Need to be easily discovered - Thanks to Google and Bing, people are going to find your mobile web app a lot easier and quicker than they are searching through the various app stores.
• Cost and Time to market are top concerns - Developing a mobile is very expen$$$$ive. If you're developing for iOS, be ready for the headache of getting your app approved through Apple's (seemingly capricious) approval process. Developing for Android? Then expect to spent a significantly more amount of time testing for all the flavors of Android. Developing for Windows? Why in the world are you doing that? ;-)

Advantage Mobile Apps:
Here are three cases where a mobile app is your better option:

• The Customer Is Always Right -  Let's face it. Consumers today almost expect their favorite brands to have a presence in the app stores.
• Establish Long-Term Loyalty - Mobile apps are a thumb-touch away. If you have a compelling app, your customer are very likely to continue interacting with your brand over the long term.
• Nothing beats a native app - Many brands have successfully duplicated their customer experience between the mobile web and the mobile app (e.g. Redbox, Amazon.com) for reasons stated at the beginning of this blog post. Nevertheless, there are other brands that are driving for a deeper, richer user experience that only a native app can provide.

So how do both mobile web and mobile app compliment each other?

For one thing, use the mobile web to promote the mobile app. As mentioned before, don't just rely on app store searches for your app to be discovered. Search algorithms on the web are light years ahead of those used in app stores

Your brand strategy probably isn't a one-sized fits all approach either. Use the mobile web when you want to offer breadth of content to your customers - especially when it needs to be constantly fresh. Then, use the mobile app to take your customers to a more focused and deeper experience.

How are you using the mobile web and mobile apps to compliment each other? Post your replies to this blog post.

Mobile Loyalty Programs

Will mobile devices become the digital wallet of choice? Their always-with-me reality opens the door for this possibility for many consumers. Google, PayPal, American Express, MasterCard and many many others are pouring lots and lots of money into R&D for mobile payments.

But take a look at what's in your wallet. There's more in there than just money and credit cards, right?

Let's take loyalty cards for example. I've actually got quite a few loyalty cards and fobs in my own wallet from my local coffee shop (No, it's not Starbuck's), my local location of a national grocery store chain, and my favorite Lao-Thai restaurant.



New companies like Key Ring Technologies and CardStar are jumping in with services that let you store all your paper and plastic loyalty cards all within their branded mobile apps. You can also sign up for additional loyalty programs with brands they've partnered with - all directly from within their mobile apps.

I like the idea of consolidating all my paper and plastic loyalty cards onto my smartphone. This concept is truly bringing my smartphone one step closer to becoming my digital wallet.

But I must confess that there is one thing that bothers me about Key Ring's, CardStar's, and other similar companies' approaches. These all follow the Groupon and Living Social business model by acting as merchant aggregators. Being a marketer myself, I don't like the idea of Key Ring or CardStar or anyone else owning the relationship between me and my customer. I want to own the relationship top to bottom. Hey - Apple doesn't have a problem with this approach and neither do I.

That's why I personally am leaning more towards offerings from Punchd and In2Loyalty. Both of these companies position their products directly to the merchants - not to the consumers. This means that by using Punchd or In2Loyalty, I'm the one offering the mobile loyalty program and I get to totally own the branding and the relationship with my customers.

Both provide a self-service SaaS web application that lets merchants create and manage their mobile loyalty programs so I get direct control over my program.

The way that Punchd works is the merchant creates his own loyalty program using their web application and prints out his 2D code on a big cardboard sign. Customers are supposed to download the Punchd-branded smartphone app which includes a 2D code reader and a listing of all the other nearby Punchd-affiliated merchants. When the customers come into the store, they use the Punchd smartphone app to scan the 2D code printed on the sign that the barista brings out from behind the counter for them to scan. Voila! Their loyalty cards are then automatically punched.


My favorite is actually Australia-based start up In2Loyalty. Like Punchd, their offering is a self-service application that merchants use to create and manage their own mobile loyalty program. The main difference with their approach is who does the 2D code scanning. In the case of Punchd, customers have to install the Punchd-branded mobile app and then scan the 2D code in order for their mobile loyalty cards to get stamped. In the case of In2Loyalty, the merchant does the scanning - an approach that I personally like better. Not everyone wants to download yet another mobile app. In contrast, people are more comfortable visiting mobile web sites.

So here's how In2Loyalty works: merchants use In2Loyalty's self-service application to create their own branded mobile mini-site complete with color scheme and logos. Here's where I upload my product offering, the locations of all my stores, a Facebook/Twitter/Google+ feed (nice touch!), and the details of my loyalty program - including customizing what the stamps on the mobile loyalty card will look like.

The entire mobile mini-site is my branded experience; there's no mention of In2Loyalty at all - with the exception of the URL of the mini-site (which probably could be completely branded if I ask them nicely enough). It's all about owning the relationship with the customer. Am I paranoid because I insist on owning the relationship with my customers? I don't think so. Again. Ask Apple. Who do they want owning the relationship with their customers: them or Best Buy? You get my drift.

As the customer, I just go to the mini-site in my mobile browser and register for the loyalty program. I can create my own login ID in the customized login screen, or I can register by linking my In2Loyalty account with my Facebook, Twitter, or Google+ identity. Once I've created my account, all I have to do is bookmark the web site. Both iOS and Android smartphones let me save website bookmarks directly to my home screen for easy reach. I don't have to install yet another smartphone app. When I go into the store, all I do is open the mobile mini-site in my mobile browser and show my personalized 2D code to the barista behind the counter.


As the merchant, I've already downloaded the In2Loyalty-branded Android app with the built-in 2D code reader. (iPhone app coming soon? Unknown as of this writing.) So all I have to do is scan the 2D codes that my customers show me on their smartphones. Voila! Their loyalty cards are then automatically punched.

For something as simple as a mobile loyalty program, I prefer the mobile web approach over the mobile app. Why? Because it's quicker and cheaper than a mobile app. I'm willing to sacrifice the richer user experience of a mobile app in favor of the simplicity of a mobile mini-site. For example, if I add a new location to my coffee shop chain, all I have to do is update the mini-site using the SaaS web application. In contrast, a mobile app requires that I update the app ($$cha-ching$$), post the update on the app store and hope that my customers download the app update.

In general, if richness of user-engagement is more important, then a mobile app is the preferred choice. If timeliness and freshness of content is more important, then the mobile web is the preferred choice. Remember: it's not an either-or decision. The mobile web and the mobile app can and should compliment each other - as in the case of In2Loyalty's offering.

All four of these companies that I mention here are doing the mobile eco-system a tremendous service by advancing the usefullness and opportunities of mobile devices for commerce. I like what all of them are doing and I do have my personal favorite. You may have your personal preference and I welcome your feedback to this blog post.

Now, if my driver's license can be stored on my smartphone then THAT'S when I seriously start thinking about my smartphone becoming my true digital wallet. But that's another story for another time ...