Stefan Schmidt, Director of Product Strategy at hybris examines how enterprises can move beyond today’s first-generation “iPhone App” strategies and to a model of integrated mobile commerce that drives customer value and satisfaction and streamlines operations.
Mobile commerce is one of the most overhyped and least understood disciplines in e-commerce. What passes for mobile commerce today often amounts to little more than a simple iPhone application or a mobile-optimised website. Both of these are building blocks for a greater mobile commerce strategy, but they do not even begin to tap into the potential of the mobile platform.
Mobile truly has created an “always on society,” where people are online and accessible 24 hours per day. Mobile platforms have become more than simple communications devices; they are lifestyle assistants that enable people to connect, interact, inform and influence. Because of this, they are also an incredibly valuable piece of the commerce puzzle – no other channel provides such a direct and persistent connection to customers, partners, prospects and suppliers.
Understanding mobile’s strengths is critical to successfully integrating mobile into the commerce equation. And when one understands those strengths, one understands that mobile as a standalone commerce initiative is not nearly as compelling as mobile as part of a multichannel commerce strategy. When implemented properly, mobile complements other channels and vice versa.
And yet, from a technology perspective, most mobile commerce initiatives today are either standalone efforts, or “bolted on” technology to existing e-commerce platforms. Both approaches represent a problem: mobile commerce is limited as a standalone function and can actually be counterproductive if it is out of sync with other channels. Mobile is infinitely more powerful as an integrated function with the rest of the commerce infrastructure.
For example, an iPhone application that shows simple product information and pricing is of limited use unless it includes some sort of mechanism to drive customers to a store or online where they can purchase the product. And it is of no use whatsoever to the majority of customers who own Blackberries, Android handsets and other non-iPhone platforms. This is not to say there is anything wrong with iPhone applications that show product information and pricing – it simply illustrates that such an application does not a mobile commerce strategy make.
However, the use of mobile barcodes, text-messaging and location-based services designed to drive customers to both bricks-and-mortar and online destinations will increase revenue. And cross-platform applications designed specifically for customers, partners and suppliers will streamline operations and grow transaction volume across all mobile handset users. When fully integrated both on a technical and strategic level, these types of initiatives improve existing processes by effectively delivering information and incentives across the “always on” mobile channel.
The Evolution of Mobile Commerce
Mobile commerce first gained notoriety more than 10 years ago when Coca-Cola rolled out dispensing machines in Finland that could accept payment via SMS text message. Since then, most mobile commerce technology deployments have not been transaction oriented. In recent times, the most common initiatives have been mobile-optimized websites and iPhone applications.
This evolution mirrors the evolution of the Internet as a commerce platform in the 1990s. Initially, “super portals” like America Online provided a controlled gateway to the online world, just like iPhone applications and mobile service-provider home pages do today. And, first-generation websites were little more than static product catalogues, just like most mobile-optimised websites are today.
Over time, the world came to grips with the interactive power of the Internet and it ultimately subsumed the entire commerce landscape. For example, in the early days of Internet commerce, there was a vision of “clicks and mortar” – that is, the integration of the Internet channel with physical store locations. Today, customers expect this capability, which is why it is commonplace to be able to purchase a product online and pick it up in a store location. The integration of the online and physical worlds now extends across virtually all functions in the commerce value chain: manufacturing, sales, supply, service, etc.
As part of this trend, customers have come to expect a consistent experience across all channels. They expect the products and pricing they see online to be the products and pricing they find in the store (unless, of course, there are specials running “online only” or “store only.”) They expect the call center to have a complete view of their relationship across all channels. And they expect efficient product delivery and returns processing, regardless of whether they ordered the product online, at the store, or over the phone.
Because of this trend, mobile must be fully integrated, both technically and strategically, with the greater commerce ecosystem. The mobile channel can only achieve its full potential if it is consistent with, and complementary to other channels. And in some cases, the mobile channel could be counterproductive if it is not in sync with the commerce ecosystem, because it will only frustrate customers with inaccurate or out-of-date information, and impair efficiency and transaction volume by creating channel conflicts.
It is for this reason that mobile commerce must evolve beyond its current “super portal/iPhone app” phase of development. Mobile platform capabilities are progressing rapidly with the continuing proliferation of smart phones, powerful mobile browsers and faster cellular networks. These fundamental building blocks open a world of possibilities for commerce professionals. The time has come for mobile to become a rich, multifunction commerce platform that drives traffic, sales and efficiency.
Unlocking Mobile’s Potential
Mobile technology is evolving very rapidly with ever-more powerful handsets, networks and applications. However, mobile commerce remains at a relatively embryonic stage of development. According to a study by Stores.com and Forrester Research, 62 percent of retailers today either have no mobile strategy, or are developing a strategy. Those that do have a mobile strategy in place are primarily using mobile for product, price and store information, and customer reviews.
Mobile’s evolution is impaired in part by the “Three Great Myths of Mobile”:
• Mobile commerce technology is too expensive to deploy.
• It is too difficult to support all of today’s mobile platforms.
• Mobile commerce requires a separate infrastructure and staff to drive business value.
In fact, there is a vast array of opportunities to drive business value today with mobile, without incurring undue expense or complexity. Some of these opportunities include the following:
• Mobile Barcodes: Mobile barcodes are a powerful way to drive in-store transactions. For example, retailers can provide a mobile application that enables customers to use the camera in their mobile phone to snap a picture of a barcode, which then brings up a special landing page for that product or group of products. This can provide customers with instant product and pricing information and create opportunities for cross selling or up selling. These same capabilities would also provide the ability to generate coupons or vouchers that encourage impulse buying in the store.
• Location-Based Services: Mobile store-locator applications can guide customers to the nearest store, or the nearest store that has a specific product in inventory, and also provide coupons for use in the store.
• In-Store Shopping Applications: Mobile devices can become “virtual salespeople” by providing applications that enable customers to check product availability (both in-store and online), compare prices with other outlets and access reliable product information. (Enabling price comparisons with other outlets seems counterintuitive, but it actually is beneficial because it helps keep the customer in the store to negotiate pricing rather than having them leave to investigate pricing elsewhere.)
• Multichannel Engagement: Mobile can become the first point of contact with a potential customer, who can then be transferred to other online or offline channels. For example, a coupon could be used as an incentive to download a mobile application, with the coupon redeemable at the online or offline store. Mobile is also an excellent channel for customer updates. SMS messages, email or automated phone calls can be used to notify customers to product availability or special promotions, driving them to online and offline stores, and providing them with vouchers while in-store to encourage impulse buying.
• Closing the Sale: Actual mobile transactions have been slow to evolve since those initial Coca-Cola machine rollouts, due primarily to technical and security considerations. Most of those issues have been overcome today, making mobile a suitable mechanism for capturing customer information and executing transactions.
Technology Considerations for Rich Mobile Commerce.
Mobile commerce technology should provide the flexibility to adapt to emerging business requirements, so it can support mobile commerce operations both today and in the future – even if future requirements are not yet known.
In addition to being fully integrated with a broader commerce platform, mobile commerce technology should have the following core capabilities that will enable a truly rich mobile commerce strategy:
• Integrated Content Management: This will enable easy development of mobile-optimised websites and ensure content consistency across different sites and channels. The solution should have a single interface for content creation, and advanced search and navigation capabilities to make content access simple and intuitive. It should also integrate with promotions functionality, to facilitate the rapid creation and deployment of promotional content.
• Mobile Barcode Generation: As detailed earlier in this article, mobile barcodes open a broad range of opportunities to influence customer behaviour – from driving them to online and offline stores, to encouraging impulse purchasing, to promoting up-selling and cross-selling opportunities.
• Standards-Based APIs: These APIs – most often based on Web services standards – will enable seamless integration with other systems and support for all varieties of mobile platforms. This enables mobile and commerce platforms to integrate with back-end systems, and all major mobile platforms.
Internet commerce in the 1990s was an exercise in trial and error for most enterprises, simply because it was a brand new discipline. Many mistakes were made along the way – exemplified by the collapse of the dot-com bubble in 2000.
Mobile commerce is at a similar evolutionary stage as early Internet commerce. However, there is no need to engage in trial and error. The lessons learned from Internet commerce make it relatively easy to understand how mobile commerce needs to be integrated into a commerce strategy and what infrastructure capabilities are required.
Essentially, however, the emergence of multichannel commerce means mobile commerce must integrate with existing enterprise commerce platforms. Mobile content must be consistent with content on other channels, and mobile strategy must complement the greater commerce strategy. With these requirements in mind, a mobile commerce platform should have the following characteristics:
• Seamless integration with existing commerce platforms, to enable a true multichannel strategy.
• Integrated content management, to enable rapid content development and consistency across channels.
• It should be handset-agnostic, to enable applications to be deployed on any mobile device – not just iPhone.
• It should enable the full exploitation of the mobile platform by enabling the use of text-message-marketing, Web browsing, advanced search and navigation, bar code generation, and more.
Today’s mobile infrastructure has leapfrogged mobile commerce strategy. Millions of consumers have adopted powerful smart phones and other mobile platforms and are connecting with ever-more-advanced networks. With the right technology underpinning it, it is relatively simple to envision multiple useful mobile commerce applications that can drive significant value today.