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Mobile: Retail tool of the future?


The potential is huge. One device carried on your person which could browse for, locate, purchase and pay for any item from your favourite retailer (who you tweet about while using it).

Mobile phones, in particular the latest generation of smartphones, have so many functions that tie-in with retail trading and the industry is constantly finding new ways to exploit the medium.

Last month saw the latest innovation announced by Everything Everywhere, the resultant company from the merger of the Orange and T-Mobile networks, which will allow customers to pay for in-store items via their phones using contactless payment technology.

This one channel seems to be capable of delivering all of the retail customer’s needs but is the demand for these services enough to justify the costs?

New research from the Internet Advertising Bureau (IAB) suggest that 27 per cent of consumers choose mobile as the preferred way to access content and services online.

With $1 billion (£616 million) worth of Amazon goods and $2 billion worth of eBay products sold through mobiles devices last year there is considerable money to be made, but the best way to use the medium is up for debate.

Damian Hanson, CEO of mobile and social commerce specialist One iota, commented: “Retailers need to ensure they enable the customer to make purchases whenever and wherever they want, which means mobile site optimisation and mobile commerce channels cannot be ignored.

“If your store doesn’t meet expectations across new technology channels, you will lose out - it’s that simple. Ignore your customers’ shopping behaviours at your peril.”

An avalanche of mobile apps have been launched onto the market during the last year by a host of major retailers but research suggests that concentrating solely on this approach may be a mistake.

IAB’s research also highlighted that the majority of mobile internet users access sites through web browsers rather than apps, making the need for mobile-optimised sites compelling.

A recent report from BT Fresca, the telecommunications giant’s multichannel retail arm, stated: “Mobile apps definitely have their place, but BT Fresca believes these are better deployed for specific standalone/marketing purposes.

“For mobile ecommerce a mobile-optimised website is much better as it will work across all devices and browsers.”

Only apps that can offer exciting extras not available on standard websites will prove popular with the public and that has led some retailers to offer some pretty amazing functions with their apps.

GPS store locators, barcode scanners, loyalty points and shopping list are all now becoming standard features on retailers’ apps and eBay has recently launched a fashion app which uses augmented reality.

Marks & Spencer is leading the way in m-commerce, according to a recent study by eDigitalresearch, topping a list of the best mobile services from retailers with an approval rating of 88.8 per cent.

Some doubt the cost effectiveness of investing heavily in mobile commerce if it detracts from other more lucrative lines of business, and Richard Dodd of the British Retail Consortium has previously argued that retailers should wait to be a part of the “second wave” of m-commerce once the medium is more established.

Bob Phibbs, founder of industry consultancy The Retail Doctor, argued on his blog last week that there is compelling evidence as to why retailers should not neglect their bricks and mortar business by concentrating too much on the emerging m-commerce channel.

He quoted Doug Knudsen, President of Retail Sales at ConAgra, who pointed out that, “70 per cent of brand selections are made in the store and 68 per cent of all purchases are, to some degree, impulse driven”.

With e-commerce sales predicted to represent only eight per cent of total retail sales in the US by 2014, Phibbs believes mobile is a dangerous distraction for some retailers.

Good sales can be achieved through mobile ventures but the cost to run them, often through out-sourced suppliers, needs to be considered.

It may be that, in the short-term, many in the industry remain cautious about expanding their mobile offerings even though the creative possibilities are considerable.

Published on Thursday 24 February by Editorial Assistant

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