Australia’s retail businesses should explore mobile commerce to supplement their in-store activities in order to boost sales, the Australian Retailers Association has warned.
The warning comes on the back of a new report from mobile commerce giant PayPal, which has found that mobile payments grew by 14 fold year-on-year in 2010, with 68% of Australians saying they will make a mobile payment sometime in the near future.
The report also found the total amount of mobile transactions hit $155 million in 2010. PayPal notes that in 2009 the total of its mobile commerce transactions was $141 million, and says that number is expected to be surpassed by just Australian transactions in the year ahead.
PayPal Australia managing director Frerk-Malte Feller says retailers need to start jumping on the mobile bandwagon immediately, or they will miss out.
“eCommerce has been lagging development of other markets such as the United States or Britain. Retailers are just responding to that, and then now all of a sudden comes the need for mobile sites.”
“But retailers need to embrace it quickly, whether they like it or not, because people are accessing your site, and if they don’t like it you might not only be losing that sale but a customer at the same time.”
Australian Retailers Association deputy executive director Jennifer Cromarty says businesses need to start working on integrating mobile within their stores sooner rather than later.
“We’ve been out there talking about getting online, but the opportunity is really now. Consumers see a brand, and want to transact with that brand if it’s trusted. That’s what Australian consumers actually want – to get into the space, talk to people who have doing this and buy things on their mobiles.”
The report identifies some key growth figures for mobile commerce. It found the most popular time for mobile shopping is when consumers are travelling, with 76% citing convenience as the main reason for shopping while doing so.
PayPal recorded 25% month-on-month growth in mobile payments during 2010, the report states.
The first step, PayPal and the ARA say, is developing some sort of ability for your customers to purchase things using their mobile phones – especially as the report finds more people are using mobile commerce while travelling.
“When you think about it, it’s quite obvious,” Feller says. “When you see people on a bus or a train, they are using their iPhones and so on. People are replacing magazines and newspapers with phones and tablets.”
Cromarty says the mobile solution needs to be easy to navigate – especially during the checkout process as many customers will become confused and disoriented if a retailer tries to fit too much information on a small screen.
The report found 76% of consumers cite convenience as the main reason for transacting on mobile sites, but the other half said the screen is often too small and difficult to use.
“For many people, the task of entering a 16 digital credit card number, an expiry date, and a CSV number is enough to drop out of the conversion flow,” the report states.
Cromarty says a demonstration held today by PayPal showed off their mobile express checkout, and says retailers need to find similar ways of creating fluid checkout experiences, otherwise the participation rate can drop off.
“If retailers can make that transaction seamless and easy without putting multitudes of data on a phone screen, it’s a good thing.”
But the ARA and PayPal say companies don’t need to just be thinking about how to make a mobile site. The report found over 45% of consumers said they see themselves using mobiles in non-online stores in the future, prompting calls for the integration of mobiles in bricks-and-mortar locations.
“Some might say they don’t know how it all works, but you don’t need to have every piece of wiz-bang technology. If a consumer goes into your store with a mobile phone, do you know what they’re doing with it?” Cromarty says.
Those comments come as Starbucks revealed earlier this week it has already seen over three million customers pay for their products in-store using their iPhone and Android app, which allows the customer to hold up their phone next to a barcode reader.
“They could be scanning the barcode and finding a better price, or they could be researching other products. They may not want to buy something on the mobile, but use the mobile to do things in-store. The mobile platform doesn’t necessarily have to be a website.”
Feller says it is important that small business don’t over-engineer themselves when creating a mobile solution.
“Start leveraging other technology providers to sell online. There are eCommerce systems out there that allow you to develop an online site and a mobile site at the same time, and those are good for small businesses.”
For larger businesses, he says it’s important to realise that mobile sites can’t just be a carbon copy of the original.
“If you do have the resources to create a more sophisticated mobile solution, it’s not just a copy. You can take advantage of some of the unique capabilities the phones have to create a far more rich experience than just online.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
