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Spending Less On Mobile Often Yields The Same Results
Because so few of the mobile-influenced sales easily show up on spreadsheets, it can be almost impossible to prove ROI. “It’s so small and marginal that it won’t move the needle,” Mulpuru said.
So the question stands: Once an app or mobile site enables products to be found and compared, how much is each new level worth? And is there any realistic way to establish that it will bring in additional revenue to cover the higher cost? “We found the commerce numbers exactly the same for those spending a lot and (those spending) a little,” Mulpuru said.
Then again, one of the clearest statistics in the report may be the best explanation for retailers moving cautiously when it comes to investing in mobile technologies. In answer to the question, “What are your company’s greatest internal challenges to successfully deploying and managing smartphone and tablet device initiatives?” the top answer—from 60 percent of the organizations surveyed—was, “Business objectives for mobile initiatives are unclear.” That blew away “lack of experience,” “staying up to date on market/consumer needs” and other responses.
Any time a retail IT shop isn’t sure what the business objectives are, that’s a truly deadly sign. It means someone came up with a seductively attractive technology and wants to use it, rather than identifying a business problem and looking for a technology that will fix it. That’s backward—but worse, it also means that business-side sponsors of the project have either fallen in love with a what’s-it-good-for? technology, or they’ve been talked into backing the project by IT.
In the case of mobile, that means those business people will bail on their support as soon as it becomes clear that, with no specific problem to solve, there’s no way to justify spending lots of money on the non-solution. And that’s exactly the blind spending they shouldn’t be doing.
On the other hand are those lightweight low-cost projects to dip a toe into mobile. They probably do have simple lightweight goals, even if they’re nothing more than the mobile equivalent of a sale flyer or a guy wearing a sandwich board.
Maybe no one will be very impressed with a cheap, simple mobile project. But an expensive mobile project that doesn’t deliver on any business goals will definitely impress your CFO and CEO. If nothing else, it will get you remembered.
-Marc
September 14th, 2012 at 9:42 am
As you wisely pointed out, the research comes with one significant caveat concerning infrastructure and overheads. Case in point: we recently had a prominent distributor pilot our mobile and cloud based software. Sales managers loved it and so did head office. Pricing for the software itself was a non-issue. However the project was put on hold. Why? They would have had to equip their sales managers, the very people responsible for visiting stores and placing orders (the heart-beat of the company’s cashflow), with smart phones which they deemed too expensive. Are you thinking what I am thinking? You mean they don’t *already* have smartphones? To me, this is borderline unbelievable in 2012. It’s easy for many of us to look out of our glass towers and assume that connectivity and smartphones are ubiquitous. Unfortunately, the reality on the ground is different, especially outside of metropolitan centers. The lesson here is that those who forgo those critical infrastructure investments today will struggle to remain competitive against leaner, faster and better equipped competitors tomorrow.