How to make the most of the potential of mobile shopping

MOBILE COMMERCE Online retail is growing and mobile internet usage is on the rise. Nevertheless, many store operators are holding back from mobile commerce. The reasons for this and why it makes sense to follow this trend after all - even if a few things need to be taken into account.This article appeared in the 12/2015 issue of MK. Subscribe Now.The woman screams when she sees the mail carrier at the door. He’s delivering a package she’s been waiting for a long time. She’s clearly delighted—a well-known scene from television. The “screaming” ad campaign by the online retailer Zalando still resonates today: The brand retailer has since grown into one of Switzerland’s top-grossing online stores. So it’s no longer just a theory that online retail is gaining importance. According to a study by the EHI Retail Institute, sales at the top 10 Swiss online retailers have increased by 38.5 percent compared to the previous year. This means that more than one in every three francs flows into e-commerce at the most popular retailers. Compared to brick-and-mortar retail, which recorded zero percent growth, online retail grew by 10.6 percent in 2014, as shown by a study conducted by VSV in collaboration with GfK.The Smartphone GenerationThis growth is not only due to consumers’ increased knowledge, improved service levels from providers, and lower prices; the most important driver is, in particular, the increasing use of mobile devices. In 2014, 69 percent of Swiss people owned a smartphone. The previous year, that figure was 58 percent, as a study by comparis.ch shows. In the coming years, that percentage is expected to rise further to 75 percent. Among Generation Z—that is, 12- to 19-year-olds—the figure is already 89 percent. This growing mobile trend is also reflected in usage patterns. While the average internet user spends 3.2 hours a day on desktop devices and only 1.2 hours on mobile devices, teenagers spend 2.7 hours on a PC or laptop and 2.3 hours on a smartphone, as A study by Yahoo shows.Cautious Mobile ShoppingIn line with this trend, the top 250 online stores have redesigned their websites to be «responsive.» The proportion of such sites rose from 24.4 to 63.2 percent in 2014—another finding of the EHI study.Nevertheless, mobile shopping in Switzerland still appears to be in its infancy, as a study published by the IAB in November 2015 found. Among other things, the study examined how often users shop via their smartphones. Forty-one percent stated that they never shop via a web browser. Four percent shop daily, ten percent at least once a week, 18 percent once a month, and 26 percent less frequently. Smartphone users apparently prefer to use an app.

While music (17.3 percent), clothing, shoes, and accessories (16.5 percent), as well as books (12.8 percent) and travel tickets (11.9 percent) are the most commonly purchased items, groceries lag behind at 8.3 percent.The Untapped PotentialHowever, these high traffic figures are offset by modest conversion rates. Possible reasons for this include the fact that mobile use cases and offerings have not yet been implemented very efficiently. Examples include cumbersome scrolling, endless loading times, or abandoned shopping carts. In addition, many people consider PCs or laptops to be more secure. Users expect mobile stores to offer specific added value that compensates for the small screen size and the resulting, often somewhat more difficult navigation. Such mobile shopping solutions are still lacking.There are, however, a few pioneers: Just as it did back in the days of “Schrei” advertising, Zalando demonstrated the necessary intuition for customer needs in this area as well and struck a chord with its app solution. As a result, the online retailer won the 2015 E-Commerce Award in the Mobile category.M-Commerce with a StrategyThis example clearly shows that there is still a lot of potential in this area. But when is it worth getting into m-commerce, and what exactly do online store owners need to keep in mind to adapt their offerings and services to the mobile landscape?

«You can’t make a blanket statement like that,» says Tobias Wirth, Head of Digital Products at the Aduno Group. «It’s important to first carefully analyze your own customers» journey and understand their shopping behavior in a mobile context.« Wirth is also a lecturer at HWZ in Zurich, where he teaches the CAS Mobile Business program and highlights the ways companies can offer added value through mobile devices. »For them, a mobile-first strategy is essential if they want to reach Generation Z,” says Wirth, describing a scenario for the transition to m-commerce and thereby confirming the study mentioned at the beginning. He goes on to outline three approaches that can be chosen when developing a mobile commerce strategy: 1. The existing online sales channel is expanded to mobile. An example of this is the SBB app. 2. Customers are in a brick-and-mortar store and use their mobile devices as an additional sales and information channel. The U.S. retailer Walmart is leading the way. 3. Customers use their mobile devices to research products before they go shopping. The device is thus used as a bridge between the offline world and the online channel. An example here is PayPal QR Shopping.Viewed from every angleIn addition to the chosen strategy, there are three levels to consider: «At the corporate level, decision-makers should ask themselves to what extent the corporate culture and processes are geared toward m-commerce activities, whether systems already exist, and what initiatives can be implemented,» explains the lecturer. Then there is the customer level, which takes into account interaction with customers and examines existing services. The offering level deals with the added value that can be delivered via mobile devices. These different perspectives enable a concrete entry into the field or the optimization of existing offerings in the mobile sector. «Generally speaking, m-commerce makes sense when there is a connection to the situational and real-world environment,» adds Wirth.Perceived TrendsAs the real-world example of Zalando shows (see below), it’s not enough to simply convert your online store for mobile; the mobile solution must also offer added value.These can be features like those offered by Zalando or the new app from the Spettacolo coffee bar, which allows users to pay in advance and then pick up their coffee at a location. Special designs or unique content, such as videos, further enhance the app’s value.«»However, current technological developments are largely overlooked by retailers,« notes Tobias Wirth. As a board member of Smama, the Swiss Mobile Association, Wirth co-conducted a study in which 113 Swiss retailers were surveyed about m-commerce. In the study, they indicated, among other things, which technologies they are using. For example, 23 percent rely on responsive design, followed by in-store mobile payments and optimized omnichannel experiences. Retailers make little or no use of technologies such as augmented reality or 360-degree videos. »Augmented reality via smartphone currently has very little customer acceptance. The virtual reality headsets from Samsung and Oculus Rift, on the other hand, seem to be generating more customer interest. However, these headsets are not suitable for m-commerce in a mobile context,« explains Wirth. iBeacons, on the other hand, seem to have more of a future, as the 2015 Smama M-Commerce Study further shows. »iBeacons are still rarely used. However, 16 percent of retailers stated that they plan to use this technology in their brick-and-mortar stores for proximity marketing purposes in the future,” says Wirth.Check or credit cardOne of the most important points of contention in m-commerce is payment. Which method has proven to be the most reliable? «Currently, m-commerce stores mainly offer well-known payment methods such as invoice, credit card, and PostCard. These are well-suited for this sector, as they allow customers to save their payment information in the mobile store and then pay with a single tap. In addition, more and more digital wallet solutions—such as PayPal and Master Pass—are being used. These solutions offer the advantage that customers do not have to save their card information with the mobile store; instead, it is stored directly in the digital wallet,« says Tobias Wirth.Let's head into the futureAs the studies show, online shopping has long been a part of everyday life in Switzerland, and the smartphone has become a «digital extension of the body.» It is therefore only a matter of time before the user share reaches the 90 percent mark and online retailers are forced to offer a mobile solution in order to remain competitive in the market.