US retailers and shoppers go mobile

30 November 2009

NEW YORK: Growing numbers of retailers and consumers are turning to mobile phones as a key part of the purchase process, with Best Buy, eBay and Toys R Us among the companies heightening their activity in this area.

According to a recent study by Deloitte, the consultancy, 19% of Americans plan to use their wireless phone for shopping over the course of the holiday season.

This total rises to 39% for those aged between 18 and 29 years old, with the main activities said to include identifying nearby stores, accessing coupons, and researching prices and brands.

Moreover, 25% of this group expect to use their handset to buy goods in this period, helping boost this emerging revenue stream, which generates sales of around $750 million (€503m; £457m) at present.

Figures from Internet Retailer, a specialist industry title, suggest that more than 110 retailers have built a mobile-specific portal or iPhone application to date in an effort to tap into this new potential means of reaching customers.

Best Buy, the consumer electronics giant, is now among this cohort, having established a presence on this medium in June, and started allowing shoppers to acquire goods on the move in September.

Michele Azar, its vp, emerging channels, argued this tool serves a variety of purposes, as "when customers are mobile, they expect to shop, learn and buy."

Toys R Us, the toy chain, introduced its own mCommerce facility last week, boasting features such as a store finder, product information, "mom ratings" and the ability to buy goods directly.

Greg Ahearn, the firm's svp of marketing and eCommerce, suggested that "mobile technology use is growing among all age ranges."

"Some youngsters have their own phones and are looking things up, showing them to mom and dad and putting the items on their holiday wish lists."

Ebay, the online auction service, has previously predicted that its sales via cellphones will reach $500m this year, and more than triple that amount in 2010.

The web pioneer has developed an application specifically for Apple's iPhone, which is one of the main drivers of changing behaviour in this area.

Steve Yankovich, vp of business solutions and mobile at Ebay, predicted "it's quite possible more people this year will use mobile commerce through eBay and avoid the stores altogether."

Other organisations investing in this area are Walgreens, American Eagle and Victoria's Secret, all of which have unveiled mobile tools in recent weeks.

Wal-Mart and Target have also produced bespoke systems, although, unlike that for Best Buy, these do not provide dedicated mCommerce options, but direct customers back to their main web portals when they want to buy a product.

Sears, the department store chain and owner of Kmart, was an "early adopter" in this field, having first enabled shoppers to make acquisitions via wireless handsets in November 2008.

Looking forward, the increasingly advanced nature of smartphones, which will come to offer everything from high-speed web access to a variety of location-based services, is likely to heighten their role in the lives of users.

Nita Rollins, director of thought leadership at digital agency Resource Interactive, said "the majority of American consumers will be mobile device-centric in a few years."

"Now that it's technologically feasible, possessing such power literally in the palm of our hands is quite irresistible."

Data sourced from USA Today; additional content by Warc staff