Retailers surprised by speed of march to mobile

 

By Chris Lee

The leading UK mobile retailer Argos received £400m in m-commerce sales, accounting for a tenth (10 per cent) of its overall online sales.  However, on average the top 20 UK retailers generate five per cent of revenue from m-commerce, according to the 2013 Internet Retailer Global Mobile 500.

According to Skava’s McCormick, the rapid rise of e-commerce caught many traditional retailers out, and mobile commerce has taken it one step further.

“In addition to e-commerce booming m-commerce took many retailers by surprise and many retailers simply don’t know how to handle it,” she told NMK. “The fact that mobile has only been around for a few years also means there are very few mobile experts.”

Don’t cut corners with mobile commerce

McCormick argues that many retailers went with a quick and cheap mobile solution to have an offering on the market.

“But you get what you pay for and these ‘quick and cheap’ sites are poorly designed and have poor performance, which means that they are not an easy shopping experience from a customer perspective,” she added. “The senior management look at the conversion figures on mobile – some people in the UK report only 0.2-0.4 per cent conversion on mobile and assume that this is because people simply don’t want to shop via smartphone – but this is actually just a reflection of a poorly designed site. The retailers who have invested big in their mobile strategy and take it seriously are seeing much higher conversions.”

According to McCormick the quick and cheap sites usually use the same layout and navigation as the desktop site but mobile actually requires its own unique navigation.

“[The reasons] why people come onto a mobile website is different than a desktop,” she explained. “The store locator for example is buried on the desktop website but needs to be front and centre on a mobile website. Mobile requires a much more shallow navigation compared to desktop websites. People have little patience on mobile and if your website is slow and heavy to load they abandon it and go to your competitor or Amazon.”

The Amazon factor

McCormick added that every retailer must remember – if Amazon sells their products – that it provides an “amazing mobile shopping experience”. As soon as a consumer thinks of an item they need to buy it is so easy to buy on Amazon mobile and this will continue to increase as a threat, she added.

“If your mobile website is slow and cumbersome to shop from a large portion of your customers will simply quit and go to Amazon and how long will it take a retailer to win that customer back?” McCormick said. “Just like desktop websites before them – it is a learning experience of what works and what does not work.”

Another factor is that, according to Forrester, even in the US 45 per cent of the major retailers do not even have analytics on their mobile websites.

“There is no similar data for the UK but considering the UK seem to be lagging behind the US on their mobile strategy we can assume that many UK retailers don’t have analytics on their mobile websites or someone within the company analysing them,” McCormick added. “Every day more and more people are giving up feature phones for smartphones. There is a whole new segment of the population who will use their smartphone as their main computer.”

Smartphone traffic grew 78 per cent in the UK last year and now accounts for 20 per cent of all e-commerce traffic. 

“For many retailers it is simply a case that they don’t have the internal resources, internal understanding to keep up with the rapidly shifting trend from brick and mortar to desktop to mobile,” McCormick concluded. “Whenever there is a major shift in an industry such as this you will see old slow to change companies lose significant market share to new more nimble startups.”

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