By Keith Brown, Managing Director and Co-Founder, paythru.
There can’t be a retailer in the country that does not have an Internet channel strategy. The benefits have been well rehearsed – low overheads, 24/7 open hours and better margins than traditional stores.
But once the Internet site is working hard increasing sales can be tough and expensive, especially as key word campaigns become ever more competitive and costly.
So how to generate additional sales revenues while maintaining margins and building on existing digital investment?
Mobile commerce (m-commerce) may well be the answer. We have reached the second cycle of mobile Internet development. The creation of reliable and affordable smart phones with associated data tariffs was the first, and the second is the delivery of true mobile commerce or the ‘digital mall in your hand’ as Forbes described it.
Consumers have become used to making micro-payments for applications and music through their mobiles and Apple, Amazon, PayPal and Nokia have all launched m-commerce strategies to take advantage of the huge opportunities that the second cycle of development offers.
For retailers the benefits are that not only do you create a new revenue stream through m-commerce but you can also increase e-commerce sales through cross promotion, increased customer loyalty and improved web traffic.
Indeed Nielsen forecasts that m-commerce will drive a 14 percent increase in e-commerce for retailers operating both channels.
The reasons for this are many. Consumers are increasingly accessing the Internet through mobile devices and this is not just while out of the office or the home. According to Buzz City 70 percent of mobile Internet access takes place in the home.
Real m-commerce will allow friends to buy tickets for the match while discussing it in the pub, donate to a charity having seen or heard a TV or radio appeal or respond instantly to a marketing message.
In summary, m-commerce lets consumers spend where they want, when they want and, if implemented correctly, how much they want.
This ubiquity of mobile access plays well to another trend – the growth of Generation – M.
This is not about age or socio economic group but more a mindset, for these highly social, always connected communicators are using multiple platforms to communicate, collect information and purchase in any one day.
Because the vast majority of consumers keep their mobile phone close at hand day and night the opportunity to benefit from an impulse purchase is huge.
Retailers can deliver a targeted message, at the time of day that the customer is most receptive and measure the response instantly. You do not have to wait for customers to get home or to the office to respond to your ‘buy now’ offer.
M-commerce should not just be for micro-payments. Consumers are quite used to making large purchases on the Internet – flights, concert tickets, TV’s etc. - using their credit cards.
It is by providing this functionality to customers on their mobiles that retailers will be able to really start taking advantage of the channel.
Reverse billing is fine for a ring-tone or a mobile app but retailers need to use payment methods that consumers trust if they are to increase the average value of mobile purchases.
This means having a mobile payment platform that works across all credit cards and bank accounts and on all mobile phone handsets regardless of manufacturer.
If retailers want to take their own slice of the £300 billion pie that Juniper estimates m-commerce will be worth by 2013 they will need to provide a hugely positive mobile retail experience, based on a system that customers already recognise and understand – bringing e-commerce to m-commerce.
Whilst not forgetting the importance of the right mobile payments system and targeted, relevant marketing to drive sales across all digital channels.
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