May 2008 - Channel Crossing: Mobile

Leveraging ‘The Mobile Imperative’

By David Gould

As founder and CEO of mShopper, a mobile shopping application, I am excited at the opportunity to address a broad audience of electronic retailers who have expressed so much interest in mobile commerce. We have learned the lessons of “traditional” e-commerce well, so it is only natural that enthusiasm for the new m-commerce sibling runs high.

Even three years ago, during the Jurassic Period of m-commerce, it was obvious that rabid consumption of mobile content was inevitable-just around the corner. Fast-forward to today, and mobile content is the dominant growth sector of the entire wireless industry. Voice minutes have been commoditized: witness the recent explosion of $99 all-you-can-eat voice plans. The growth sector for the next several years or longer, is and will continue to be, mobile content. Indeed, the “high priest” of the Internet, Eric Schmidt himself (along with many analysts), has repeatedly and publicly promised that the mobile web will be bigger than the Internet.

The raw numbers easily support Schmidt’s supposition. In the U.S. alone, the Cellular Telephone Industry Association (CTIA) estimates that there are more than 250 million cell phone subscribers. Best estimates suggest that nearly 40 percent of these folks already access the mobile web and mobile content. More impressively, data revenues are growing at a 50 percent-plus per annum clip. The worldwide numbers are even more impressive. In some countries, like India and China, there will never be a substantial, wired, broadband network and the wireless web will be the only way for people to access the web, and by extension, electronic commerce.

mShopper is a privately held corporation. As such, I usually do not disclose our performance figures. But, in order to prove my point, I will do so. Depending on platform and mobile browser type (mShopper will shortly power seven versions of our platform for the major carriers in the U.S. and the UK), we are converting anywhere from 0.2 percent to over one percent of all traffic that enters our ecosystem. We’ve achieved these numbers in less than one quarter of full operation. Further, we project that before the end of 2009, m-commerce conversion rates will rank parri-passu with standard e-commerce conversion rates.

But, online marketers must beware: the mobile web is not the Internet. Marketers who make the mistake of equating the two do so at their own peril.

What are the crucial differences between the Internet and the mobile web? Well, what we’ve learned in the past three years is that there exists a mobile imperative, a unique framework and mindset that marketers must absorb in order to succeed in this newest realm. We think of the mobile imperative as a unique, customer-centric value proposition that takes into account three different facets. The first is that the cell phone (I call it “the device”) is ubiquitous and increasingly well connected. This is the great opportunity that has us all so excited. Still, the second facet is no less important. By design, the device is meant to be small and unobtrusive. Screens are small and data entry is cumbersome, at best. This will remain true for a long time. Finally, and perhaps most important, is the context surrounding the user. That context is simple: Mobile shoppers are mobile. Mobile shoppers are not sitting in a comfy chair in front of a full-size screen and keyboard. They are out and about. Their needs are spontaneous and impulsive. To succeed in mobile commerce, marketers must take this mobile imperative into account.

The mobile imperative means different things to different businesses. Apparel retailers face a different mobile shopping imperative than ticket merchants. There is no one-size-fits-all success algorithm. Choose your strategies and partners wisely. That said, I can offer some universal advice:

Be active. If you build it, they will not necessarily come. Success in the mobile world is no different than anything else. The more you put into it, the more you get out of it.

Be smart. People do not “surf” the mobile web-at least not yet. They log on for a specific purpose or to answer a particular question. Note also that technology will shortly solve the “mobile enabling” conundrum. New phones and browsers like the iPhone render and version existing websites in real time. (And note that people acquire new phones every 18 to 24 months). Still, relying on technology to simply replicate your site is a mistake and will not lead to success. New versions of your site, optimized to address the mobile imperative, are required. In other words, successful mobile sites will shortly be more a function of design and marketing and not technology.

Aggregators work well. Aggregation plays resonate profoundly with the mobile imperative. Because of device limitations and because mobile shoppers are mobile, well designed, one-stop shops offer great value to consumers and, by extension, to the retailers who join them. Better still are aggregators that offer tools and services so that merchants can proactively control their own destinies. The mall analogy is viable. Malls aggregate merchants and therefore, generate lots of traffic. Still, once in the mall, placement, marketing and merchandising are what determine the winners from the losers. Make sure your mall provider offers all the tools you need as a marketer to succeed-including lots and lots of traffic! (By the way, this is where partnerships with the carriers make the most sense. Your aggregators should offer robust carrier distribution deals that include great placement within their wireless portals. At least in the near term, carriers have the ability to steer a lot of mobile traffic in any direction they like. Make sure your partners have these relationships.)

There are quite a few mobile commerce enablers, some of which are selling snake oil. Look for partners who offer more than simple “mobile enabling” services. Be leery of services that promise to create a mobile website for you for a monthly fee. They may mobile enable you, but that does not guarantee you any traffic.

Focus on content verticals and offerings that resonate with the mobile imperative. We’ve had great success with a service we call “GetFirstDibs,” a permission-based, text alert program where people sign up to receive a first chance at liquidations, close-outs and limited quantity, deeply discounted items. This resonates well with the mobile imperative. Consumers want text message alerts and the immediate, ubiquitous notification minimizes the risk that the item will sell out by the time they get back to their computer. A recent research report issued by the Gartner Group suggests that more than 20 percent of U.S. cell phone subscribers have indicated an interest in receiving such text alerts.

David Gould is the founder and CEO of mShopper, a provider of mobile commerce applications based in Boulder, Colo. He can be reached at (303) 800-0806, or via e-mail at [email protected].


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