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Off the hook

Written by Josh Russell on Monday, 04 March 2013. Posted in Finance

When looking at potential revenue streams, mobile commerce is one of the most exciting areas. Meaning it’s not worth missing the party

Off the hook

There’s no hiding it. UK retail is going through its most fundamental shift since e-commerce first began to take off in the late-1990s. In just a few short years, mobile transactions have gone from being a niche to an all-pervading part of consumer culture and this is offering access to revenue channels which previously have been inaccessible.

“E-commerce is changing on a dramatic level,” says Paul Doherty, sales and marketing director at e-commerce experts PureNet. Which is no overstatement. According to comScore’s UK Digital Future in Focus 2013 report, almost a third of page views in the UK now take place on a smartphone or tablet and one in five people used their smartphone to make a purchase last December. Taking this into account, it’s no wonder many retailers are seeing mobile commerce as less of an optional revenue stream and more a fundamental element of their business. Doherty comments: “More and more of the switched-on retailers know that people use the internet and purchase in a very different way with their mobile devices than they do with their desktop computers.”

When dealing with the evolution of e-commerce, it’s very much a case of adapt or die. “You can’t ignore the explosion we’re seeing in smartphones and also the usage of these smartphones to purchase,” says Ryan Higginson, vice president of digital channel and supplies Europe at Pitney Bowes. He refers to figures that estimate 70% of smartphone users research their purchases and begin the buying process on their phones; 30% complete this purchase on their handset. In light of this, it’s important to have the right tools in place to make their passage throughout that buying process as smooth as possible. “You need to at least have a site there that allows people to get information on your goods and your services at a touch of a button or a click.”

A company that knows all about making the switch is online contact lens retailer Lenstore. Founded in 2008, the Lenstore brand and model were founded before mobile commerce had really been established as a significant revenue stream. However, the retailer realised the way its customers were shopping was beginning to shift. Founder Mitesh Patel explains: “We noticed that a decent number, around about 10%, of our customers were trying to access our website through their mobile phones.” Initially, the levels of engagement through these channels were pretty poor, with the number of page-views per visit remaining very low, suggesting that they were losing many people from the buying channel. 

As the trend continued it became clear there was a very definite market for people shopping for contacts on their phones. “Customers were trying to get on and off the website while they were out and about, and then get on with their day,” says Patel. “We realised then that we needed to launch a mobile-optimised site.”

 

Something worth bearing in mind, however, is that for a customer to make use of an app, they will either need to be motivated by high levels of loyalty or a need to make regular and repeat purchases. CTO of umi Digital Marc Crouch explains: “It is a heftier commitment for a user to download and install an individual app than it is to browse an individual website.” Expecting individuals to download an app to purchase a car or apply for a mortgage is likely only to frustrate the user, insisting upon an emotional commitment for a fairly short-term relationship. “My advice for the majority of e-commerce sites is to ensure your website is mobile- and tablet-ready through responsive design principles.”

And this is something reflected in Lenstore’s experience of the market. Patel feels the instant connectivity and convenience of the mobile market lends itself toward specific types of products. “Contact lenses are a routine purchase,” he remarks. “They’re the sort of things you don’t really want to think about.” But additionally, the quick and easy nature of purchasing on a mobile is particularly suited to items that might easily be forgotten and remembered again on the spur of the moment. He continues: “Anything you’ve actually run out of and actually need, you just want to do it right there and then. Mobile purchasing is very important for anything that needs replenishing.”

Unfortunately, mobile commerce isn’t the only tool you’ll ever need. While it could be inferred from the reports in the media that mobile technologies are ringing the death-knell for the desktop, it seems nothing could be further from the truth. “One feature I’ve noticed from many who have added a mobile-optimised site is that it seems to create more users; it isn’t cannibalising desktop users,” comments PureNet’s Doherty. He does feel that this may be liable to change as the way we define our technology changes, but for the time being it certainly doesn’t seem to be a case of either/or. “It’s an additional channel, not a replacement channel,” he says.

Which brings us to an important point. Rather than being the next big thing, mobile commerce is simply another strand in an increasingly sophisticated multi-channel picture. Not only is mobile commerce able to capture sales when consumers are out and about but it is also facilitating greater cross-channel co-operation.

“There are beautiful ways of linking the physical to the digital,” says Higginson. Given Pitney Bowes’ long history of working in communications and its work with franking machines, it’s only natural the firm is eager to pioneer any innovations that offer additional options for its clients. One of their most recent products involves replacing the traditional business logo on franked post with a digital logo featuring a QR code. “It allows you to advertise your business on your mail then take them to a really rich mobile experience with the QR code,” he explains. “That’s a great way of bridging between the physical and the digital.”

This is something Patel feels is the real strength in mobile commerce. He comments: “I think there’s going to be a really interesting interaction between out-of-home advertising and your mobile phone.” He highlights what it is that makes Google such a powerful tool for driving retail opportunities. Unlike more sophisticated, targeted advertising platforms such as Facebook, Google actually captures the consumer at the point of highest purchasing intent. Patel thinks that the same rule will eventually be applied to our high streets, capturing consumers at the exact moment they’re intending to buy something. “When you walk past a billboard, I don’t see it being that far into the future when it will transmit to your mobile phone a relevant message,” he says. “That’s the big opportunity.”

But when we’re talking about the relationship between channels, what about desktop and mobile? In a world of co-operative retail channels, is there anything e-commerce can learn from its trendy younger brother?

“I think there are a lot of tricks that mobile sites employ that you can bring to bear on standard e-commerce sites,” Doherty comments. “You want to make it a very easy job. Less is more. Keep it simple.” Ultimately, there are some rules that apply across the board and no matter where you’re looking in your multichannel picture and when looking to bolster your revenue, they are things you cannot ignore. “Making it simple for the consumer – that’s the key thing,” explains Higginson. “Regardless of what channel they’re accessing you through and what device they’re using, it’s important to keep it simple.” 

About the Author

Josh Russell

Josh Russell

As editor, Russell is the man in charge of properly apostrophising our publication and ensuring Oxford commas are mercilessly excised. Our digital doyen, he’s also a Photoshop Pro, a dab hand with InDesign and the man to go to if you need a four-hour soliloquy about the UK's best silicon startups.

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