Scott Todaro, Sr. Director, Product Strategy

In case you happened to miss the press release, Sterling Commerce and Demandware conducted an independent research survey to gain more perspective on the mobile commerce explosion. The end result is that people seem to fancy their mobile phones and transacting on these devices is just the tip of the iceberg. Now if we could just find a way to get grandma feeling more secure about buying stuff online. Below are some enlightening statistics generated from this independent survey of 3,600 U.S. consumers:

• 15 percent of consumers have used their mobile devices to make purchases.
• Nearly all (96.2 percent) of consumers surveyed own a mobile phone, just under half owned a smart phone, which are designed to deliver a more optimal shopping experience.
• Nearly half of consumers would like the option of using PayPal.
• Nearly 40 percent would feel secure knowing that the mobile phone app would not store their credit card number.
• More than 60 percent believe that being able to use their mobile phone while shopping to verify product availability at a particular store location is important to very important.
• Nearly a quarter of shoppers use their phone while in a store to competitively price shop an item.
• Approximately 20 percent of consumers currently use their phones to create shopping lists or baskets, and slightly more than that number would be interested in a mobile app to help with shopping list or basket management for their favorite retailers.
• Two thirds are interested in the possibility of using their mobile phone to scan and purchase items, thus enabling them to bypass checkout lines.
• A quarter of shoppers believe that receiving specials/promotions (such as coupons) would be an important use for their mobile phone when shopping, although they were less enthusiastic about receiving advertising via their phones.

To see the press release containing more statistics click here.  The entire survey findings will be shared at the 2010 Shop.org Annual Summit on September 28th in Dallas, Texas. More information on the Summit can be found at www.shop.org/summit10.

It’s the holiday season, well almost. Although it seems distant to many, it’s imperative that retailers start to prepare now. Retailers should be thinking of affective ways to lure in consumers and boost sales during the 2010 holiday season now. One way to ensure a major holiday turn out is by going mobile. For the first time, there are more smartphones than computers being sold. This creates a gigantic opportunity for retailers, especially those who are quick to act. It’s important to keep up with competitors who have already become mobile and are able to provide customers with hassle free shopping this upcoming holiday season.

Mobile will help capture consumers on the go. I, like many, enjoy things that make my life just the slightest bit easier. This becomes a major bonus during the holidays when all people want to do is avoid stores - but know gift giving is a must. Not only does mobile allow you to purchase items at any given moment, it also makes in-store shopping easier. Many of today’s consumers like to use the internet to plan how they will spend the limited time and budget they have for shopping. With mobile, they can simply search for the desired items on their phone, find them at the store, and make the purchase - allowing them to avoid browsing in a crowded store during the holiday season.

Not only does mobile drive in-store purchases, it can help close the deal once consumers are there. Often times, mobile devices are used as in-store shopping tools to help you decide that the price for that flat screen TV you have been pondering is in fact a good deal. The quick research customers conduct on their mobile phones while in-store is usually the final push needed to make the purchase. Retailers will ultimately close more sales by taking this approach and enabling their customer’s access to their mobile site.

Mobile helps the indecisive shoppers that enjoy the opinions of the crowd but can’t seem to convince our friends or family to head out on Black Friday. For those instances when we look for guidance, we are able to take a photo, share a link or ask advice from friends in our social networks prior to our purchase. And accessing product reviews will help build customer confidence in purchasing a big-ticket item. Mobile consumers are looking for facts to support their purchase decision as well as approval from friends and/or other consumers. Retailers must be sure to create a social media presence so that their websites are optimized for mobile viewing and sharing, and their brands are visible and accessible to holiday shoppers.

Help make the holidays a little easier for your customers and give them a worry free shopping experience. After all, it is the season of giving.

(This article was contributed by Meagan Armaral)

By Scott Todaro, Sr. Director, Product Strategy

I woke up this morning thinking that I finally had a grip on where the mobile commerce market was going and how fast it was going to get there. Note to self, guess again. I was blown away by some of the mobile adoption numbers as I read the latest reports.

We have now crossed over 60 million smartphone users in the U.S., more than double the number of a year ago, and Nielsen projects the number will more than double to 140 million web-based phones by the third quarter of 2011, when smartphones will overtake conventional cell phones. Mobile commerce in 2010 will generate upwards of $5 billion in revenue, more than double 2009.

What does this mean? Quite simply, if you are not thinking about mobile commerce now you will find yourself crushed like an ant by your competition. That said, mobile commerce does not need to be a daunting task as many online retailers already have the tools they need to build, maintain, and grow a mobile site. All the same data that is stored in your ecommerce platform (catalog, pricing, promotions, orders, customer information, etc.) can be reused for the mobile site and your merchandising and marketing can be managed through the same UI you are using today.

Learn how Demandware Mobile can give you the strength to achieve your “high hopes” of launching your first mobile site.

by Scott Todaro, Demandware Product Strategy

I don’t know about you, but recently I have been doing a majority of my shopping through my mobile device. Apparently, I am not the only one since retailers are starting to see their mobile revenue reach as high as 5% of their overall online revenue (Forrester reports that it is between 2-3% on average depending on company size). Billions of people worldwide rarely leave their house without their mobile phones and, as a result, PC’s are slowly becoming passé. 

Even though the mobile browsing experience can be rewarding, the one step in the process most shoppers find tedious is checking out. To type in all of your billing and shipping information on a tiny on-screen keyboard is downright painful.  In order to improve the mobile shopping experience, especially as it pertains to checkout, it is no surprise that retailers are turning to PayPal and Amazon Payments for driving conversion on the mobile web.

PayPal, for instance, recently launched their mobile Express Checkout which offers online retailers a more direct and simplified payment process. For consumers shopping on iPhones, Blackberrys and Android devices, PayPal’s mobile express checkout provides an effortless payment experience. With the understanding that shopping on the go has become more common, PayPal’s payment process ensures less complication and frustration. According to PayPal, Mobile PayPal transactions keep increasing and the company expects to see $500 million in mobile transactions this year.

Although integrating payment solutions into your mobile storefront or native application can be time consuming, Demandware offers pre-built integration code and documentation to both PayPal Express Checkout and Amazon Mobile Payment free for all customers. Check-out the Demandware LINK Marketplace to learn more about other free integrations.

The 2010 Internet Retailer event was the most well attended ecommerce event ever with 6,371 attendees (4,250 paid) and the most content rich with 4 tracks on a variety of digital commerce related topics. The event also featured a large contingency of over 400 exhibitors ranging from ecommerce platforms to mobile storefronts to social applications. The keynote session commenced with an industry update that featured a 14% growth in sales for Q1 2010 over Q1 2009 for the US. Also, the ratio of overall web revenue to in-store revenue grew from 7.2% to 8% year over year for Q1, strengthening the claim that retailers can no longer be channel neutral. What struck me most were four recurring themes that echoed throughout the event: multi-channel integration, mobile, social, and international expansion.

Multi-channel Integration
Retailers have been talking about true multichannel integration since 2000. At IRCE several retailers presented multi-channel examples of how they have realized this goal. None was more heartening then the presentation by Imran Jooma's, Sears VP of E-Commerce, who spoke about their "Manage My Life" initiative. I highly recommend you see firsthand how Sears has unified the purchasing experience between the online, call center, and mobile channels for creating customer convenience. It was abundantly clear that retailers are thinking beyond just sharing basic order data across customer touch points, but are now focused on differentiated strategies for consumer interactions.

Mobile
Although there were many topics covered during the sessions, a good number of them discussed how mobile would affect their business. An eye-opening number was delivered during the keynote that currently 60% of people on earth have a cell phone. Of that 60%, smartphones are now making up 30% of the mobile phone market. Brian Walker from Forrester shared a stat that up to 3% of purchases made online were influenced by a mobile device. The overall view across the retail community is that within the next 2 years, transactions made on a mobile device would represent a significant portion of overall revenue.

Social
Social marketing took center stage as a number of retailers presented their best Facebook and Twitter campaigns. What I found most interesting was hearing that retailers were making money selling through Facebook; there were many applications that were built to allow consumers to find products and transact without leaving the friendly confines of their Facebook page. Open Graph was a hot topic as many retailers discussed the indexing of their product pages into Facebook and seeing results. Twitter on the other hand, had mixed reactions as to its level of success, many citing that their customer base did not use Twitter often enough to make it a worthwhile marketing medium.

International Expansion
Retailers are now seeing the advantage of using digital channels to expand their brand reach into other countries. For the first time in recent memory I heard US brands clearly articulate strategies as to how they would go into other markets.

In conclusion, though there is plenty of room for growth in the online retailing sector, retailers have truly embraced and realized the benefits of selling through digital mediums. A sign of good things to come.

As Mobile Internet Devices Outsell Computers In 2009

By Adam Forrest

Thanks to the folks at Practical Commerce we know that for the entire year of 2009 Mobile Internet Devices outsold computers.  According to the article, 450 million Mobile Internet Devices were sold compared to 306 million computers.  Now while the amount of commerce currently completed via mobile is neglegible the steep adoption curve is right around the corner...are you ready?

Consumers are smart, savvy, and more technologically advanced than ever before.  They are constantly using the mobile phone as an extension of everyday life.  Forget dialing 411 phone numbers or addresses, forget needing to go home to compare prices on your computer, and forget having to rely on Consumer Reports for recommendations.  All of this information is at the fingertips of consumers, and whether they will transact today, tomorrow, or in the future; if you are not prepared for the battle, you may have already lost.

Make sure your site is ready for mobile commerce.  Pick the medium that best fits your company - whether it is through a WAP site, mobile optimized site, or native application - put your best foot forward or risk your competitor taking your consumer.

By Scott Todaro, Demandware Product Strategy

So you are an online retailer who wants to be on the cutting edge by being first to market with a mobile store. The big question is how do you get started?

First look at your customer base to determine if they are the right demographic to adopt smartphones, with average income level and education being two of the key determinates. If your customer base does not fit the bill, then until the market matures and costs come down, a mobile strategy might be a few years in your future.

Next look at how your mobile commerce strategy can be part of a larger multi-channel strategy. Consider your mobile commerce initiative as an extension of your website and brick and mortar experience instead of as a separate selling channel. Technologies such as bar code scanning with a mobile phone camera and GPS will enhance consumer facing functionality such as store locators, in-store pick-up, price checking, product reviews, search and store inventory availability for delivering a fully integrated multi-channel experience.

With 61% of consumers unwilling to make a purchase on a mobile phone, according to Gartner, it is quite likely that your customers will use their smartphone to improve the shopping experience at your other retail channels.

When building a plan there are three things to consider before taking the plunge:

1. Brand: Today brand is often lost in the translation from physical store to Website. A poor mobile experience will only exacerbate this trend. Take into consideration your Web experience and your offline branding elements when you build the mobile commerce experience.


2. Product Catalog & Navigation: The goal is to keep the mobile purchasing experience as consistent with the online shopping channel as possible. Search and navigation on such a small form factor can become very difficult if you offer hundreds of thousands of SKUs. Also, you must address your staffing needs for managing the catalog, especially if you need to change the resolution of the images to fit the mobile form factor or manage different product categories from what is offered on your Website.


3. Promotions & Marketing: If you have a comprehensive promotions strategy that has a multi-channel approach, you need to look at how to accept diverse promotion types and optimize the presentation of promotions on a mobile phone for marketing consistency. Many companies offer mobile commerce but they fail to market the mobile site. With text message marketing still a little invasive and costly, promoting the mobile site must be a true multichannel initiative.

All indications and research shows that mobile commerce is not going to hit critical mass until mid-2010. That said, it is prudent to start your homework now, but wait to see how the market shapes up. Watch closely which operating systems become dominant and build a strategy for the masses that focuses on getting better than 70% market share of smartphone users. Write a comprehensive business plan that includes all elements of marketing, merchandising, services, technology and globalization-and don't forget staffing. Then pray that mobile commerce continues to buck the current economic trends.

By Stephan Schambach, Demandware Founder & Executive Chairman

One of the most frequent "vision" questions I get from clients and industry experts alike is "Tell me about mobile ecommerce." Until recently, my answer was that I don't see any killer app from mobile commerce outside of ringtone downloads. But this was before the iPhone.

Before addressing the iPhone effect, I would like to share some hands-on experiences with mobile ecommerce. In 2000, when I was still running my last company (Intershop), we had several customers who experimented using WAP, or wireless application protocol. WAP, of course, is slow, text-only and the user experience wasn't engaging-it was barely tolerable. The consistency of the user experience between devices was, and still is, a major problem. As a result, the revenues realized through WAP were negligible and the cost of running this service more than eliminated margins on sold merchandise. Clearly, it was an idea whose time had not yet come. This has been my experience with countless other attempts by technology companies and startups-mobile ecommerce seemed to be applicable to only very narrow use cases such as ringtones, tickets and payments. The availability of GPRS, EDGE and HTML browsers on mobile phones did not change this at all.

With the advent of the iPhone, I believe the time for mobile ecommerce has come. We are looking at a perfect storm of mobile broadband availability, a shift in mobile customer behavior and the availability of the first user interface on a mobile device capable of delivering a stunning user experience beyond making calls. Let me address the individual points:

Mobile broadband availability: 3G (or UMTS as it's called in Europe) delivers data rates of up to 7.2 MBit/sec. This is as fast as your home cable or DSL modem. Forget WiMax; Wifi-like experience for mobile devices is coming to us from existing mobile operators who merely upgrade their transmission towers.

Change in mobile customer behavior: While mobile phone use was and still is the #1 application of a mobile device, it is quickly changing to the numerous modes of Internet communication-such as mobile email, chat, video, sharing pictures, listening to music and more. As these uses increase, a device's ability to access websites at high resolution and speed will be an important consideration. In other words, the phone function will be one of many features, but customers will-and often already do-expect more out of a mobile device.

Mobile user interface: Apple, for the first time, managed to crate a truly mobile user interface with the combination of a high-resolution touch screen and gestures. This is important because the type of visual interaction required to have a positive, exciting shopping experience is key to mobile ecommerce.

Price no longer a barrier to mass adoption: $199 for an iPhone, plus a monthly charge not significantly higher than other combined cell/data plans, will foster massive adoption.

Now, how will it work? Will the iPhone just be used as a browser to access existing ecommerce sites? I don't think so. I believe that purpose-built UIs for the iPhone and similar mobile devices will be much more exciting than simply compressing the pre-existing interface. I envision that the gesture-driven touch screen UI will be exploited to deliver a never-seen-before mobile and interactive experience. Some of these possibilities are already being exploited as the iTunes App Store now sells hundreds of applications to enhance functionality (eBay is already on board) utilizing all the iPhone gestures we know so well. This combination of convenience and user experience will make the difference and pave the way for true mobile ecommerce success.