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Is enthusiasm for mcommerce waning?

The level of enthusiasm for mobile commerce – online sales made from a smartphone or tablet – appears to be leveling off, not from any inherent issues but because early hype is giving way to a more realistic understanding of the challenges and potential that lie ahead.

This is not to say that mcommerce sales growth is slowing – the upward trajectory continues unabated. However, from comments made by industry experts at the recent Mcommerce Summit and in discussions after that event, the suggestion is that the early heady days of mcommerce may be nearing an end.

“Reality has sunk in,” said Sheryl Kingstone, Toronto-based research director at Yankee Group. “You always have your typical hype cycle where everyone jumps on and then reality sets in and it takes off eventually in a more normal, acceptable scale.

“Right now, we are wearing off on the glamour and sex appeal of it and the fact that everyone was forecasting this huge amount of dollars in mcommerce,” she said.  “The bottom line is that the fundamentals of the business forecast haven’t changed.

“The early adopters, the ones that were going to do it, really jumped in, were really doing it and were very excited. Now all of a sudden we are going into the mainstream and the average person is not going to shop on their phone only.”

Healthy growth
Mcommerce sales continue to be very healthy.

A recent report from Branding Brand found that smartphone-generated retail revenue was up 115.9 percent in April versus a year ago. Additionally, smartphone visits to mobile-optimized retail sites were up 83.8 percent while the number of smartphone orders increased 96.4 percent.

However, there is a growing understanding that mcommerce narrowly defined only as sales made from a smartphone or tablet will always be a percentage of ecommerce sales, which is a small percentage of overall retail sales.

“I don’t know that there is less enthusiasm,” said Julie Ask, vice president and principal analyst at Forrester Research, San Francisco. “For a bricks-and-mortar retailer, digital overall is typically a small part of their business.

“Mcommerce is not the biggest opportunity,” she said. “For them it is driving consumers in store.

“In-store is the next frontier or challenge facing many retailers. The low-hanging fruit has been picked. Tough challenges are ahead.”

The customer journey
Of course, the story is slightly different for online-only retailers, some of whom are seeing a significant percentage of their sales come from mobile devices.

But for traditional bricks-and-mortar retailers, the bigger potential is the role that mobile plays throughout the consumer path to purchase. That is where the excitement is right now, with retailers quickly adopting beacons, for example, as a way to engage with their in-store shoppers.

With mcommerce just one piece of the puzzle when talking about mobile’s impact on the path to purchase, industry experts are split on whether retailers will be investing less resources on mcommerce going forward.

“There still needs to be a focus on it especially for bricks-and-mortar,” Yankee Group’s Ms. Kingstone said. “The thing is you have to meet consumers across their customer journey.

“If it is only about the transaction of the sale, then you are missing the boat, especially if you are talking about bricks-and-mortar,” she said.

“If mobile commerce is about the customer journey with the mobile phone – huge. That is where I think the energy needs to be put.”

Further investment needed
Retailers need to continue to invest in mobile commerce if it is to continue to grow at healthy rates because there is still a lot of for improvement in the user experience.

What needs to happen for mobile commerce sales to continue to grow includes addressing data breaches which make consumers fearful of sharing their personal data and developing more seamless payment experiences.

“We are such in our infancy here in making it easier,” Ms. Kingstone said. “We still haven’t figured out NFC, we still have multiple digital wallets and everyone is fighting about this.

“The consumer is not going to adopt it until we figure out where we are going.”

An evolutionary process
Retailers also need to focus on driving convenience for users via mobile and making experiences more contextual.

In other words, mcommerce will be one part of a bigger picture about mobile’s growing role along the entire path to purchase, with in-store experiences a crucial element for bricks-and-mortar retailers.

“Mobile in-store will be an evolutionary process as each retailer learns what works in their environment,” said Lauren Freedman, president of the e-tailing group, Chicago.  “There will be fits and starts as there always have with mobile.

“We probably all will look back and find that mobile checkout will be standard and certain basics will universally in place,” she said. “The remainder may turn out to be category-centric or based on age or retail type as it always has.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York