New Mobile Audit Reveals State Of Mobile Commerce Among Leading Brands; Identifies Best Practices

acquity group logoEditor’s note: After a record year for mobile marketing spend and success (and a holiday shopping season that saw a spike in mobile commerce), analyst firms report mobile has finally arrived as a legitimate marketing medium. Forrester Research is particularly bullish and predicts marketers and retailers will start investing significantly in cohesive mobile marketing and commerce strategies. What is the current state of mobile commerce readiness among major brands? A recent audit and the results of a follow-up study by Acquity Group reveal the leaders and the laggards in mobile commerce — and offers advice to brands that want to close this gap.

The growth of mobile online shopping in the U.S. has been nothing short of phenomenal. This increase has been fueled by a significant shift in consumer behavior and a massive migration of users to smartphones. According to the latest figures from comScore, a digital measurement company, smartphone penetration has reached 23 percent, up from 13 percent in 2008.

This dovetails with new numbers from Nielsen. It reported that 28 percent of U.S. mobile subscribers had smartphones as of November 2010, a figure it forecasts will hit the all-important 50 percent threshold in the U.S. by end-2011.

All signs are pointing to 2011 becoming the year smartphone adoption reaches critical mass.

However it is the creative and even viral nature of mobile sites and apps that is driving a new wave of mobile commerce interest and activity. In December 2010 ABI Research reported that mobile commerce, excluding the U.S. travel industry, will more than double to total approximately $3.4 billion for 2010. Travel-related purchases such as airline tickets and hotels add another $1.5 billion.

ABI and other research firms have said they were caught off guard by the explosion of highly innovative use-cases deployed by retailers and third-party players, and many have had to adjust their forecasts upwards. In 2015, ABI Research predicts that mobile shopping will be responsible for $163 billion in sales worldwide, 12 percent of global ecommerce turnover. In addition to direct sales generated via mobile, brands will build on mobile shopping schemes to deliver a broad range of mobile marketing campaigns and CRM programs.

Mobile ready

So what are brands doing now to integrate mobile into the marketing mix?

amazon logoIt appears that some of the larger global brands have a first-mover advantage. They began, several years ago, to develop mobile strategies and invest in resources in this channel. A prime example is Amazon, an online retailer that became the first to achieve $1 billion annual sales generated by shoppers using their mobile devices to clinch the deal. More recently, Opera Software ASA’s State of the Mobile Web Report showed a notable increase in the number of visits to’s mobile Web site towards the end of the year, compared to earlier in 2010.

At the other end of the spectrum, many brands have yet to wake up to the pivotal role mobile plays in consumer shopping and buying decisions and develop a strategy to address it. But lack of awareness and absence of a comprehensive strategy are only part of the issue for brands. On a purely tactical level, they also have to step up efforts to optimize their online destinations for mobile.

Fortunately, Acquity Group’s Mobile Audit (which examines the Internet Retailer Top 500 list) shows a marked increase in the percentage of mobile compatible websites. The audit revealed that 12 percent of the Internet Retailer Top 500 websites could be accessed by mobile browsers in 2010, while only 4 percent of those sites were mobile compatible in 2009.

The audit also found that 7 percent of the Top 500 retailers have introduced a downloadable mobile app, compared with just 2 percent the previous year.

Mobile commerce capabilities

Clearly, more retailers are developing and delivering mobile compatible sites and apps. But how many companies are really ready to do business with consumers on their mobile phone?

To find out where retailers are in their mobile commerce approaches, Acquity Group conducted a follow-up study. We looked at the 249 brands already active in the mobile space (having launched mobile websites and/or apps) and focused on three primary industries: Retail, Ticket Vendors and Travel & Hospitality. The goal of this study was to gauge brands’ mobile commerce capabilities and readiness.

The results table (below) shows that these sectors were distributed across a fairly standard bell curve. Of the 249 organizations Acquity Group analyzed, only 19 were ranked “Excellent,” meaning they had both a commerce-enabled mobile website presence and a downloadable app that functioned on the majority of mobile platforms. Nine of the companies we audited had no mobile optimized presence.

mobile commerce rankingsCommerce report card

So who’s succeeding in mobile commerce? Our analysis showed that retailers “get” it better than most. However, some ticket sellers (Fandango and Moviefone, in particular) are also driving results.

mobile commerce leaders

Note: 249 organizations were evaluated (183 Retailers, 56 Travel & Hospitality Organizations and 10 Ticket Vendors). Those listed above are the top players in their relevant industry sector.

In summary, 85 percent of the 249 organizations we audited have a mobile site.

Of this total:

  • 96 percent allow catalog browsing on at least one mobile platform
  • 89 percent of Travel & Hospitality organizations allow reservations to be made on at least one platform
  • 75 percent of Retailers and Ticket Vendors allow for mobile checkout on at least one mobile platform

Our audit also examined the range of mobile apps brands offer and the functionality they enable. Roughly half (48 percent of the 249 organizations) provide consumers at least one mobile application. Of that total, most (74 percent) allow catalog browsing on at least one platform and 59 percent allow for checkout on at least one platform.

Predictably, a breakdown of the apps and the platforms they support shows Apple iPhone stealing a lead on other vendors. A whopping 45 percent of brands have an iPhone app. BlackBerry comes in a distant second.

  • 9 percent have a Blackberry app
  • 8 percent have an Android app
  • 2 percent have a WebOS app
  • 0.8 percent have a Nokia Ovi app
  • 0.4 percent have a Windows Mobile app

Best practices

The analysis shows Amazon and Fandango lead the pack when it comes to enabling (and benefitting from) mobile commerce. Their formula for success combines a holistic multi-channel strategy with strong tactical execution across platforms.

Amazon’s mobile strategy also delivers because it effectively extends its Internet offer and reach to a range of connected devices including mobile phones and — more importantly — the Kindle. Put another way, Amazon has migrated its vast ecommerce experience and expertise to mobile devices and platforms it knows are front of mind with its target demographic: iPhone, iPad and Android.

Likewise, Fandango has also had great success because it can seamlessly extend its tickets sales and offers to consumers on the move and people accustomed to making instant purchases using their mobile phones. What’s more, buying a ticket is a no-brainer. There is no color choice to make, and no worry whether a movie ticket is the correct size. Mobile is the perfect vehicle for this type of transaction.

It’s encouraging that Amazon and Fandango are leading the way in mobile commerce. But what can other companies do to follow their lead and extend their offer to mobile?

Of course, deciding the correct approach depends on the organization’s industry sector, business objectives and own efforts to develop and coordinate cross-channel strategy.

However, there are mobile basics that apply to all brands across all industries. With this in mind, Acquity Group has identified three best practices to guide brands in developing strategies for the mobile channel:

  1. 1.) Usability. Understand the experience, task flow and design you want your brand to communicate to mobile users. This is part of knowing your audience’s needs – where they spend their time, when and in what context they use their mobile device and their mobile platform preferences – and developing functionality around those key areas.
  2. 2.) Context. It is important to consider mobile as just one tool in a multi-channel program, but always remember that mobile cannot be just a miniature extension of your existing presence. Mobile user experiences are extremely context-sensitive, and you have to plan accordingly. Maybe putting your entire catalog into a mobile shopping experience isn’t the optimal approach. Instead, work to match your audience’s needs while on-the-go. Mobilize, don’t miniaturize.
  3. 3.) Value. Meeting your audience’s usability and contextual needs will provide the basis for offering them actual value in the mobile channel. But providing value in the mobile channel requires much more. It needs to incorporate a multi-channel view and make doing business with your organization that much easier for the customer. Value is also a two-sided coin: your mobile tactics have to offer benefit to your organization through increased revenue, greater customer satisfaction, and/or the metrics most important to your business.

The takeaway: The mobile channel should be considered an integral and strategic part of a company’s marketing plan. Organizations are advised to make it a central part of the marketing and communications mix and abandon strategies and approaches that view mobile as a separate and siloed tool.

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tom nawaraTom Nawara is Vice President of Digital Strategy & Design at Acquity Group. He oversees the strategic direction and tactical execution of key client initiatives in a variety of digital areas, including content & collaboration, commerce, digital marketing, social media and mobile. As a mobile and emerging media strategist, Tom has worked with many leading brands to develop solutions that successfully integrate mobile applications, sites and marketing platforms into true cross-channel initiatives that leverage digital content, commerce and social media capabilities. Each year Tom also plays a key role in the release of the Acquity Group Mobile Audit, which assesses the level of mobile adoption by the world’s top eCommerce brands. His deep expertise in this space has landed him in multiple publications, including Internet Retailer, ComputerWorld, eWeek, MediaPost, Reuters and eMarketer, among others.

Tom further extends his industry knowledge by being active in the local mobile development community, with frequent participation in groups such as Mobile Monday (MoMo) Chicago. He is also a regular speaker on topics related to the digital channel, and you can connect with Tom directly when he speaks on mobile payments at Bricks + Mobile 2011 (March30, Chicago) .

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