U.S. Retailers Tip-Toe Through Mobile Commerce Minefields

Written by Evan Schuman and Fred J. Aun
August 13th, 2009

It began, arguably, with the iPhone two years ago and it hasn’t let up: Consumer excitement about today’s breed of Web-friendly smartphones is undeniable. So it’s reasonable to expect that, by now, most major retailers would be running great mobile commerce sites designed to capitalize on this long-awaited blossoming of the Mobile Web. Reasonable, perhaps, but not real.

Instead, the U.S. M-Commerce space is floundering as merchants drag their feet deploying purchase-capable mobile sites or find their mobile initiatives stalled by an avalanche of obstacles beyond the anticipated mountain of incompatible platforms and mobile browsers. The problems encountered are legion. They include a vacuum of standardization for everything from design, programming, payment processing and even URL naming to fears about carrier conflicts over the types of permitted content and a Catch-22 business strategy about how much, and when, they should embrace M-Commerce.

(Related stories: A Mobile Retail Quagmire: The Checkout and Mobile Site Designs: A Standards-Free Wild West.)

The definition of true M-Commerce varies wildly, so we offer our own: The ability for a consumer to make a purchase solely by using a mobile phone. Most existing mobile sites don’t, and some _ such as Walgreen’s mobile site _ allow actions but not transactions (in the sense of actually buying something). If the process requires the consumer to use a desktop/laptop for each purchase, it’s not true M-Commerce. (We’ll give a pass to chains that force the consumer to make a one-time Web visit to initially set up the account.) If the process merely sends text message promotions, that’s not M-Commerce. Limiting the phone’s purchases to items that must be picked up in a store doesn’t count and when a retailer does buy-online-pickup-in store for products that Amazon could have easily shipped, that’s not true M-Commerce.

With these hurdles, it’s no surprise a look around the mobile commerce world reveals a rather barren landscape, at least if the goal is to find major retailer sites with full functionality. Amazon has one, but that’s to be expected as it is a company born not of brick and mortar but of technology. Not having brick-and-mortars to worry about makes life so much easier. Also, Amazon operates on a home-grown E-Commerce platform that _ unlike some other legacy business platforms used by traditional retailers _was comparatively simple to mobilize.

There are a handful of major multi-channel retail chains that have true mobile commerce sites, including Sears/K-Mart, Wal-Mart, Barnes & Noble, CVS, Dell, Foot Locker, Ralph Lauren and Victoria’s Secret. But most of the majors either have no mobile presence or it’s mobile but not at all M-Commerce. Target is the quintessential example of such a chain.

Target allows mobile customers to search and browse its site, see product ratings, access a store locator and view general Target ads along with mobile-only ads. For iPhone users, it also offers a gift finder function. Almost everything it seems, except being able to actually buy anything.

Target spokesperson Kelly Basgen said that Target currently does not have the ability to offer a true M-Commerce site.

Business issues aside, the underlying technical reason for all these problems is clearly the inherent differences between sites on phones and on desktops. That’s certainly not a surprise to anyone, but there has been an expectation of standardization, an implicit belief that there would be general rules for how such sites would function. To date, there has been no widespread acceptance of any such rules. “The mobile phone is fundamentally incompatible with the Web as we know it,” said Stephen Slezak, marketing director at Digby, a company that creates M-Commerce sites. “Everything on the Web is designed to work with powerful processing and big screens. Some retailers spent millions optimizing for those screens and all is lost on a 2-inch or 4-inch screen and a device that can’t run stuff like Ruby. There isn’t even Flash on the iPhone.”

Retailers should accept the fact that merely porting their existing E-Commerce sites to mobile devices is a dead-end idea. Most bells and whistles must be sacrificed. For example, Tom Emmons, the man in charge of mobile development at Sears Holdings, said there are significant content and functionality differences between Sears’ main Web site and its Sears2Go mobile site. The mobile version has most, if not all, of the same products, but little of the design pizzazz. It’s also not easy to determine which products are available for purchase from the mobile site until a consumer tries to make a purchase.

“Sears2Go versus is like night versus freakin’ day,” Emmons said. “Mobile users are insanely utilitarian. They want to go in, look at something and get out.” If Sears’ experience is any indication, those mobile users also want to buy things. Emmons is fond of telling M-Commerce skeptics about the $3,000 lawn tractor purchased by one customer over a cellphone

But this is not necessarily a problem. Customers legitimately seek a very different—and much faster—experience on a mobile device. But streamlined and small is not something most E-Commerce development teams warm to easily.


One Comment | Read U.S. Retailers Tip-Toe Through Mobile Commerce Minefields

  1. Todd Leiser Says:

    Very well written piece. Thank you. The Amazon experience is amazing and gives them yet another leg up on brick & mortar. By the time traditional retailers figure this out I (and others?) will have already emotionally, habitually, and financially committed themselves to Amazon’s experience for many products, and to your point, leave them where they were in the dialup-to-broadband transition years.


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