3 ways to solve the mobile e-commerce mystery

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Now that it seems pretty much everybody on the planet has a smartphone -- and has it on nearly every minute -- no one should be surprised that mobile commerce is going crazy.

Mary Meeker, in her annual look at internet trends, recently concluded that smartphone use has exploded in the last five years and will continue to climb dramatically. Deloitte Digital now says that smartphones are driving $539 billion in in-store purchases by helping consumers find stores, compare prices, and learn about products. And eMarketer says 125 million Americans are using smartphones today while they shop.

But here's something that is a surprise: Consumer's use of smartphones is growing so quickly that many retailers are essentially in the position of playing catch up. Sure, they know that mobile phone traffic to their sites is growing dramatically, but they also realize that even so, smartphone revenue remains tiny by comparison.

Maybe we shouldn't be surprised. Anyone who's used a smartphone (and OK, that's approaching everyone) knows the determination it takes to shop with one: small screens, tiny keyboards, impossible credit card forms to fill out, and the need to scroll and scroll and scroll.

"Mobile e-commerce websites are not set up for transactions because of various issues," says Siva Kumar, CEO of TheFind, a Mountain View shopping comparison site, "including the fact about stubby fingers and pop-ups and pop-unders."

And adding to that, the smartphone is a tool that consumers use in particular ways, Kumar says. A shopper might pull an iPhone out at a store to research a product. Or maybe a driver (or preferably a passenger) sees a billboard and wants to check out the item being advertised. Or maybe a couch potato is watching T.V. and wants to begin looking for that next pair of skinny jeans (might be time to get off the couch). None of these examples result in a sale on the smartphone, but all of which might result in a sale some time. Think of that as the "mobile influence," revenue that Deloitte Digital estimates is about 15 times the size of revenue attributed directly to mobile purchases.

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Some numbers to consider: eMarketer recently reported that figures from e-commerce platform MarketLive show that smartphone traffic to retail sites has increased from nearly 18 percent in 2012 to just over 28 percent in 2013. At the same time, e-commerce revenue generated by smartphone purchases rose from 2.3 percent of the total to 3.9 percent.

That might sound good -- traffic up, revenue up -- but think about it for a second: Nearly 30 percent of traffic is coming from smartphones, but not even 4 percent of sales can be attributed to the devices. And even those increases have more to do with the mega-trend of rapidly growing e-commerce than anything retailers are doing right, says Andy Smith, co-author of "The Dragonfly Effect: Quick, Effective, and Powerful Ways To Use Social Media to Drive Social Change."

"Bigger commerce sites have really been lagging in terms of being smart about how they change the shopping experience to adapt to the mobile device," says Smith, a Silicon Valley digital marketing consultant.

And for many retailers, the worst part is that they don't know exactly what's happening to those smartphone visitors who stop by their online emporiums, but don't buy. Are they returning later on laptops or desktops? Are they coming to the retailers' brick-and-mortar store to buy? Or are they browsing the aisles of an online competitor, like Amazon, for instance.

 

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