Watch CBSN Live

7 Ways Brick-and-Mortar Retailers Are Moving into Mobile Commerce

Imagine you're a major e-commerce player and you need a mobile Web strategy. You have to navigate a bunch of fast-changing technologies -- hyperlocal, social Web, payments -- with little precedent and high capital costs. What do you do?

You think about the customer. Three years after the iPhone, those companies are finally getting a handle on how to leverage the smartphone, says Jason Taylor, VP of Global Product Strategy of Usablenet, a mobile Web development company that has built sites for a litany of major clients including Amtrak, Bloomingdales (M), Crate & Barrel, Aetna (AET), Brookstone, JetBlue (JBLU), CVS (CVS), Staples (SPLS), American Airlines (AA), Marriott Hotels (MAR), Sears (SHLD) and American Eagle (AEO).

According to Taylor, here's what's happening now in mobile commerce.

  • Eighty percent of clients opt for mobile websites instead of native apps for iPhone, Blackberry or Android. "We get involved in app build-out primarily with companies that want to add an entire app strategy in addition to their core mobile Web presence," says Taylor, but most clients simply want a mobile website. The reason: accessibility. "A successful mobile experience is one that works for all users, no matter what phone they use. One tool we use extends the company's main website into mobile browsers; that doesn't require IT development, feeds or code."
  • Retail companies with an established brick-and-mortar presence want two things from their mobile Web presence. "The first thing is a replacement for desktop Web. You need those top ten things that people use on the main website to be mobile," says Taylor. "Number two is the component of location. Whether you're traveling or in actually standing in a store, we want to be able to thin out the top features based on how close you are to the brick-and-mortar store. A good example is coupons. How do they make sure that their coupon strategy on the Web is working? One way is to use the phone to deliver them to store."
  • The challenge around hyperlocal is getting feature parity across platforms -- and keeping costs down. "Local features needs to support GPS and other location-based elements, but they need to have mass-market capability so there's a predictable cost structure. Anything you build natively is a code-up build, unique to that app, and it may not translate. If you have a feature you like on iPhone but it's not easy to replicate on Blackberry, you start to fragment the story a client can tell about their apps.
  • Retailers want users on their apps when they're inside the store. "Most of our big retail clients are brick-and-mortar retailers," says Taylor. "The interesting thing about mobile is this ability that supports both environments: real-world and online. Most of our clients are taking the stance that they should bring some of that Web knowledge into stores -- reviews, gift registry, mobile gift cards -- and a lot of attention on the mobile front is the ability to create and share a wish-list." Crate & Barrel and American Eagle are two companies most eager about the potential of the in-store wish-list.
  • Retailers could go further still with location-based notifications. "More and more we see that brick-and-mortar stores could take mobile another step. One of the new features on Apple [iOS 4] is local notifications, which allow you to create notifications that are specifically based on GPS location -- promotions based on proximity to, say, your local Sears. We're actively talking to a number of clients that want to enact store-specific promotions: you just open the mobile site inside the store," Taylor says, and the app will know which store you're in, presenting you with that store's specials for that week.
  • Mobile users are taken very seriously. "Our analytics approach records the same views and knowledge as other sites do online: bounce rates, promotions, views and so on. It's critical because it opens up real knowledge of purpose. A number of retailers have surveys that show that 5-7% of total visitors are mobile, and that 3-5% of revenue is coming in from mobile as well. So they know it's a real channel, and they're saying: we have to spend more money here."
  • The most future-forward strategies take into account that a user is just one node on a personal social network that influences their decision-making. "Some of our most aggressive clients are the ones catering to a younger demographic. American Eagle is a good example. They see mobile as a long-term strategy for them. Because of heir clientele, they approach mobile as being the way to reach the influencers of a purchase, so they've created a mobile environment that can affect the way the psuedo-decision makers -- the kids -- to affect the way the actual decision makers -- the parents -- make purchases." That's where the wishlist functionality comes in handy, Taylor says: when it takes more than one person to initiate a purchase without involving a computer. "Those are the most interesting scenarios: where the demographic is really totally mobile, throwing their computers away."
Taylor says that despite the popularity of gaming amongst young adults, his clients haven't been quick to jump on any gaming paradigms in their own app development. Instead, he says, gaming is much more of a branding opportunity. "Some companies are interested in making a hybrid game-store experience. Definitely for that kind of market space, you need to be integrated socially, and everything they're using their phone for," says Taylor.

That may or may not hold true for long; the next generation of mobile apps may be drastically different than the current one, as companies experiment and refine what works. For Taylor, the big break will come in six to 18 months: "Two-thousand and eleven is when you'll see Web apps really start to play a major role."