Up the Amazon or up the Swanny?
In case anyone is in any doubt, mobile is now a key driver of e-commerce, not just a must have part of an omni-channel strategy. Where e-commerce is very much in the driving seat of retail, much of that growth is coming from mobile sales – especially through tablet.
In fact, the latest study by eMarketer estimates that UK retail e-commerce sales will rise 16.0% this year, total retail sales in the UK, by contrast, will grow by just 3.6% in 2014, and movement will slow after that. Meanwhile, the growth trajectory for m-commerce sales is a predicted 64.8% rise this year.
This shift to m-commerce is largely behind the launch this week of Amazon’s smartphone. And smart it most certainly is: it has a ‘shopping’ button that, at a click, allows the phone to find products from QR codes, web addresses, phone numbers, songs, movies and books thanks to a database of hundreds of millions of products. It truly leverages Amazon’s back catalogue.
It can spot a novel on a friends bookshelf; it can recognize a song playing on the radio; it will even produce a 3D image of it should it find it.
But will this really be enough to sway consumers to ditch their iPhones? Will it tickle the fancy of retailers? The answers are as yet unknown. But it is a strong proposition, which does alter the retail playing field – if nothing else it brings a whole new high tech approach to mobile shopping.
According to Mark Curtis, Chief Client Officer at global service design consultancy, Fjord, which is part of Accenture Interactive: “The launch of the Fire Phone sees Amazon position itself as the first all-in-one mobile, retail, and cloud service provider.”
But Amazon has chosen to target the high end of the mobile market – up against Apple and its strong brand and Samsung with its enormo-marketing budget. Will this new way of shopping be a strong enough pull?
Consumers may dismiss it as a gimmick, but retailers will be running scared. Curtis again: “This move sees Amazon upping the ante when it comes to competing with bricks and mortar retailers, making it easier to lure their customers away. At the very least traditional retailers will need to price competitively or develop value-added services that make shopping in-store more appealing than shopping at Amazon. The risk is that shopping at Amazon through Firefly means that everything becomes a shop.”
Tesco is the only retail giant confident enough to play the same game. It has, with the Hudl and the soon-to-be-launched Hudl phone, a similar play, only much more efficiently priced. Will we see more of the branded device from retailers?
I think it unlikely. While it may look on paper like a no brainer, consumers want to feel at least like they have the pretense of being masters of their own destiny. Making your phone a one-shop-spot cripples this notion. I have a Hudl – but I bought it because I wanted a cheap tablet for the kids, not to make shopping at Tesco easier. Similarly, if I was to spend £600 on a smartphone, I would buy an iPhone not an Amazon one. I already have a app hot line to Amazon, why mess with the form?
The same goes for the other big launch this week: Google Glass is coming to the UK. Again, why would the majority buy it? It looks awful and has no specific user case. It's a great ‘sci-fi idea made real’, but it needs quite a bit of finessing. I am more interested to see what Apple does with Beats: this surely is its wearables play. Beats (poor quality) headphones are, after all, a strong brand in wearable tech. This is why Apple spend all that money on it. Watch this space. And watch out: mobile retail is going to get even more complicated.