Mobilizing for Mobile
Industry analysts and experts have long predicted that the mobile channel will be the next big thing in retail. As more consumers start to use their hand-held devices to enhance their shopping experience—25% of U.S. mobile phone users under the age of 45 have already used a phone in a store while shopping, and many are already making purchases—retailers are strategizing how to best reach out to their target audience.
“Since the mobile device is one thing that most people have with them at all times, it’s critical that retailers provide engaging and dynamic mobile applications to lure shoppers to this new channel,” said Jim Bengier, global retail industry executive at Sterling Commerce, a Columbus, Ohio-based provider of integrated solutions and business applications. (At press time, IBM had entered into a definitive agreement to acquire Sterling Commerce.)
Chain Store Age Web editor/associate editor Samantha Murphy spoke with Bengier about the state of mobile commerce and what retailers can do to get ready for the wave.
What major trends are you seeing in the mobile commerce space right now?
Retailers are focused on developing mobile applications that meet the consumer’s demand for convenience. Apps are no longer just a Web format on a mobile device; programs are now being made specifically for the device. For example, consumers can view different angles of a product by sliding their finger on the iPhone. This form functionality on the device is driving new shopping features.
In addition, many retailers are using mobile devices to support their back-end operations. A recent study by Forrester Consulting, commissioned by Sterling Commerce, found that 53% of retail companies are deploying warehouse and logistics management mobile apps. Those apps allow retailers to manage inventory more efficiently, which ultimately gets passed on to the consumer in the form of better customer service, lower prices and seamless order fulfillment.
What are your predictions for mobile in the next year? Two years?
In the next year, I believe we will not only see apps geared for consumers, but also for retail associates. For example, a store associate with a mobile device can help out a customer while in the fitting room by searching for available inventory and sizes on each floor so they don’t have to run around looking for different products.
Two years from now, we won’t see the vast number of apps we’re seeing today. Consumers will be utilizing a “My Mall” type of app, where numerous merchants are represented within a single application. Consumers won’t have to browse multiple mobile storefront apps any more, but retailers without a mobile channel will be left behind when only companies with Web storefronts will be included in the “Mobile Mall.”
What challenges are retailers facing in getting m-commerce off the ground?
Retailers must start by deciding which platform to use. Each mobile device uses a different platform, and the development of a mobile channel and operating costs can be very expensive. There’s always the ownership issue, too: Who within the organization is responsible for mobile enablement? Does mobile fall under Internet, store, marketing or somewhere else within the organization? Without distinct ownership and leadership, it can be hard to get m-commerce off the ground.
How can merchants overcome these obstacles?
Retailers should integrate mobile platforms as much as possible within the e-commerce platform to keep costs down. At Sterling Commerce, we have chosen to work with Apple. The application costs are relatively low, and Apple offers many devices—from the iPhone to the iPod touch and iPad. The growth of these devices will continue to explode, delivering to a larger customer base. That said, a unified brand experience across all channels should be the ultimate goal.
What tips should retailers keep in mind when expanding a mobile channel?
Consumers are demanding a premium shopping experience. The m-commerce process should be simple and easy to use, and consumers will gravitate to mobile sites that offer that convenience. Offering inventory information is a good way for retailers to add both customer value and convenience. Knowing whether a merchant has an item in stock at a certain location will ensure that a shopper’s trip to the store will not be wasted.
Retailers can better position themselves for mobile expansion by looking beyond just making sales. To improve the shopping experience, they should consider what special treatment they can offer a consumer, how they can stand out and how they can truly make a lasting mobile-experience impression.
Tiffany’s Q1 profit sparkles
New York City Tiffany & Co.’s net income more than doubled in the first quarter as its revenue rose in the United States and soared 50% in Asia, the company said Thursday.
The jeweler said it earned $64.4 million in the three months ended April 30. That compares with $24.3 million a year earlier. Revenue rose 22% to $633.6 million.
Revenue in the Americas increased 22% to $315.3 million, versus a 31% drop in the year-ago period. Adjusted for currency fluctuations, revenue rose 20%, and same-store sales rose 15%, led by the flagship on New York’s Fifth Avenue, where the figure rose 26%.
In the Asia-Pacific region, which doesn’t include Japan, Tiffany’s revenue soared 50% to $122.3 million. During the first quarter, the company opened its third store in Shanghai; by the end of the period, it operated 11 stores in China. Company officials said that they plan to have a total of 30 stores in China within the next five years.
In Japan, revenue slipped 2% to $115 million. Business in Europe rose 25% to $68.6 million.
Best Buy Mobile enhances Web site
MINNEAPOLIS Best Buy Mobile has annouced the re-launch of BestBuy.com/Mobile. According to the company, the new Web site will include such new features as online purchasing and Instant Ship, the new online hub offers convenient, customer-focused solutions for on-the-go gadget shoppers.
Through the new Web site, customers can now purchase a mobile phone online and have it shipped to their home or they can pick it up in-store. For customers needing assistance while choosing their phone online, Best Buy Mobile has a dedicated call center to respond.
“The capabilities within the enhanced site in combination with our in-store experience give Best Buy something completely and totally unique in the mobile phone marketplace,” said Shawn Score, president of Best Buy Mobile. “Now, we are truly a multi-channel mobile phone retailer supporting customers when and where they choose to engage us.”
Best Buy’s Mobile Web site provides customers with a larger range of functions, which include:
* Online purchases: Customers can purchase a mobile phone with a contract using online channels. Customers place their order, and can then choose to pick up in store or have their new phone shipped directly to their home. * Instant Ship: With Instant Ship, if a customer comes in and is qualified for a device that is not available in-store, the device can be ordered and shipped directly from the Web site. Instant Ship online improves the options of phones and colors for customers, and allows customers to have their new handset delivered right to their home.