American Marketer


Retailers settling into analysis paralysis over mobile commerce progress

October 10, 2014

Mickey Alam Khan is editor in chief of Luxury Daily Mickey Alam Khan is editor in chief of Luxury Daily


As the rubber hits the road for most retailers heading into the holiday season, some key decisions about mobile commerce are being kicked into the long grass for seeming want of clarity.

While retailers are understandably overwhelmed by the speed of technological change in the mobile space, the swift adoption by consumers of smartphones and tablets to run their work, play and home lives leaves little choice but to follow them, no questions asked. And yet, it seems that retailers are dawdling on the porch, watching the growing dust cloud kicked up by consumers speeding away to those who show them more mobile love.

The continued skepticism is underpinned by several unresolved misgivings. Interacting with retailers and marketers throughout the year and most recently at this week’s Mobile Shopping 2014 conference in Litchfield Park, AZ, yielded insight to several issues to seamless integration of mobile across all channels and mediums, most crucially, in-store retail. Here they are, in no particular order.

Mobile Web versus applications. The lower degree of complication involved in maintaining and upgrading mobile sites for smartphones and tablets – be it via responsive design or mobile-specific renditions – is giving mobile Web an upper hand.

This gravitation to the Web is also buoyed by growing evidence for most retailers that consumers prefer shopping via mobile sites over apps – unless, of course, the retailer is the one that gets mobile absolutely right: Amazon.

But there is much evidence that consumers who download and consistently engage with the retailer’s app are far more loyal than those who shop via Web.

The fight for more user-friendly apps must continue. While apps are more expensive to maintain and live in a walled-garden atmosphere, their day will come when wearables become mainstream. Oh, wearables – more on that later.

In addition to being a badge of loyalty, heavily engaged-with apps also deliver mounds of information about user behavior. The costs to build and maintain the app have to go down significantly for retailers to continue full-throttle embrace.

Speed of technological change is overwhelming. Some retailers are close to calling time-out on the mobile-on-steroids pace. They have barely gone past getting mobile Web right, justifying spends on apps, integrating mobile into CRM and marketing programs and now they have to contend with continually upgraded operating systems and mobile software that means undoing work wrapped up within the last 52-week cycle. Something has to give.

Manufacturers such as Apple, Samsung and Microsoft as well as software players such as Google may face pushback from the marketing and retail side with marketers opting to sit on the sidelines until the upgrade mania subsides.

Add to this cacophonous mix the debut of the Apple Watch to kickstart a sclerotic wearables category and the confusion is compounded.

The skepticism over smartwatches, especially from the retailer side, is astounding. Wait-and-see is the prevailing attitude. That might change if consumers fully embrace the Apple Watch, transferring some smartphone activities to the watch. But the weariness is apparent at the retailer end.

One more thing.

Apple Pay. So now Apple has skin in the mobile payments game. Already, the manufacturer has the most number of consumer and business credit cards on file worldwide.

But its jump into the payments space makes it easier for only three constituencies: the consumer, the credit card issuer and Apple. The gorilla in the room is still on the sofa – the sizeable cut that card issuers take per transaction, rendering that the equivalent of another tax for retailers.

With regular data breaches and card-data thefts, retailers are no closer to a secure mobile payment solution than they are from resolving issues at point-of-sale or server breaches.

Heard on the retail street: skepticism about broad Apple Pay adoption to make enough of a difference. Time will tell. Apple Pay, like the Apple Watch and the iPod, iPad and iPhone before them, are designed to be behavior-altering products.

Mobile is Big Data. The sheer number of interactions via mobile devices has created a nightmare situation for retailers, brands, advertising agencies and publishers.

Analyzing and making sense of the prodigious amount of data generated to deliver pinpointed offers via mobile is turning into a healthy business for database marketing and analytics firms. And yet, the rallying cry of most retailers is that they cannot track or measure their spends with the same accuracy as they do online in the traditional Web world.

Have the marketing service providers failed in simplifying analytical insights for retailers? Or is it a question of the messaging? Perhaps both. Mobile is a digital medium and everything can be tracked. The only worry is violating consumer privacy to the extent that it generates a debilitating backlash and dents a brand’s reputation.

Visit trade show after trade show, summits and conventions. What is the shared angst among retail executives with mobile responsibilities? Measurement, conversions, analytics, Big Data insights, cookies – all lack of. Or all not properly delivered. Common standards are needed more than ever.

Budgets – the lack of them. It is just too obvious: mobile trials are being denied significant budgets. Senior retail executives have adopted a defensive posture as opposed to setting aside money for experimentation. They demand precise ROI from a nascent medium. Judging a five-year-old for her presidential potential will not cut it. But that is precisely the attitude.

What mobile needs is gobs of investment. Mobile is not just a layer across all channels. It is not just a traffic driver to stores or ecommerce. It is rapidly becoming the front door to the business. Keep the door open with a mobile welcome sign. Think tapfalls in addition to footfalls.

Retailer mindset has to change. Mobile budgets must not be set on a dollar-for-dollar basis. Instead, the investment must be viewed as building buttresses and firm foundations for the retailer’s long-term stability.

HERE IS the reality for retailers still muddling in mobile.

The threat of inaction or anemic offense and defense – for whatever reason, and there can be many – is the hard-won customer walking away to a door not too far away.

That door worships at the altar of market share – not margin.

That door pursues a scorched-earth policy.

That door is not afraid of failure, nor content with success.

That door seeks total retail domination, and money is no object. Its means is pointed customer service – wide product assortment, extremely competitive pricing, free or highly subsidized time-sensitive shipping. Its effect is corrosive to competitors, eroding the loyalty with their own customers.

Like the river, Amazon lets nothing come in its way. Its customers are impatient. And so is the retailer: it has determinedly set its sights on mobile. What most retailers see as weeds, Amazon sees as green grass.