During the Windows Hardware Engineering Conference in Los Angeles in May, Microsoft chairman Bill Gates said, “I wholeheartedly believe the mobile phone will become the new PC and the PC will become the new phone.”
If the thousands of shoppers who waited in line last month to spend over a half-grand on Apple’s new iPhone are any indication, that time is much closer than we might think.
In the first quarter of 2007, approximately 74 million Americans subscribed to mobile Internet providers to search, e-mail, and check weather and sports, according to San Francisco-based mobile research firm Telephia. In April alone, there were 29 million active U.S. mobile Internet users. And the numbers keep on growing.
True, mobile Internet access has become a standard for convenience. But are we ready to make purchases—from sweaters to plane tickets to car payments—with these devices?
“We already have the right technology to do m-commerce,” said Levi Shapiro, director of Telephia. “What’s lacking is the consumer value proposition. People ask why they should even try if they have to do it in 38 scrolls and 12 clicks.”
At least that is the argument here on the home front, as m-commerce grows into a very tangible market outside the United States. In Japan, for example, more than 10% of e-commerce sales take place on mobile devices and more consumers access the Internet through their handsets vs. computers. Additionally, more hard goods than mobile content such as ring tones, games and wallpaper are being purchased via personal devices.
Although the United States doesn’t currently match Japan or Western Europe in market maturity, I don’t expect this to be the case for long.
According to mPoria, a Seattle-based m-commerce solution provider, there are about 95 million wireless subscribers in Japan and 236 million in the United States. However, there are only 7 million m-commerce users here in the States (which generated $480 million in revenue last year), while Japan reaped $10 billion in 2006 alone from its 27 million users. The sales gap is huge, but we are primed to close it soon.
Today’s mobile phones have far larger screen sizes than before, and the data speed from the server to the mobile phone is much faster, too.
“If a phone can operate just as fast [as a computer], pages can load quickly. And when you have that sort of positive user experience, customers will get value out of it,” said mPoria CEO Dan Wright. “The infrastructure is driving adoption, too.”
The expectations for m-commerce are also high. U.K.-based Juniper Research predicts that the global market will reach $88 billion by 2009, and 44% of m-commerce purchases will be physical items.
Although those numbers seem big from where we stand today, keep in mind that the digital-downloading market was small when the iPod first hit stores. However, the ultimate impact it had on digital consumption was dynamic.
If the iPhone is only the beginning, it’s almost scary to venture a guess at what’s still to come.
Whole Foods CEO Apologizes for Postings
Austin, Texas, Whole Foods Market announced Tuesday that its board of directors has formed a special committee to investigate CEO John Mackey’s postings regarding Wild Oats on the Yahoo! financial message boards.
Whole Foods also released the following statement from Mackey: “I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me.”
Earlier this week, on the Whole Foods Web site, Mackey confirmed that he did submit a number of postings to the Yahoo! financial bulletin boards regarding Whole Foods and Wild Oats under the name “Rahodeb.” He added that the comments he made did not always reflect his personal views and that he was merely playing “devil’s advocate,” in order to stir up discussion on the topic.
Survey: U.S. Shoppers Spend More Time in Stores
London, Sales employees of U.S. fashion retailers are engaging only with 5% of customers who enter the store, according to a survey conducted by U.K.-based Envision Retail, and it’s costing the retailers about $12 billion a year.
If those workers approached the additional 4% of customers who are looking for assistance, sales could increase 7%, the survey said.
“Retailers are very good at selecting products and merchandising them in a way that inspire customers to make a purchase, which is why over half the shoppers who enter a store with no clear idea of what to buy account for over 40% of sales,” said Jason Kemp, managing director, Envision Retail. “But if they want to make a big leap in sales, apart from just expanding the number of outlets, they need to get their staff selling.
The importance of the fitting room is also a major finding from the survey. On the sales floor 10% of customers are converted into buyers, whereas in the fitting room it is closer to 70%. Envision calculated that if staff provides quality service at the fitting room and assists customers with finding alternative sizes or items, sales could increase by 1%.
American shoppers spend 23% longer in a store compared with the global average and this is partly accounted for by the fact that 50% more customers use the fitting room.