Who Does Mobile Commerce Well?

Transcription

1 For: ebusiness & Channel Strategy Professionals Who Does Mobile Commerce Well? by Sucharita Mulpuru, November 13, 2014 Updated: November 18, 2014 Key Takeaways The Top Sites Make It Easy To Buy On Phones The best mobile commerce sites usually do something special that enables them to convert better than most other sites on mobile devices. They reduce keystrokes, they keep shoppers logged on or import critical information when a shopper logs on (e.g., a saved shopping cart), or they facilitate payments through the mobile device. Even Top Retailers Have Opportunities To Fix Parts Of The Mobile Experience While the retailers we evaluated had many strengths and generally offered very good mobile selling experiences, they also had some opportunities for improvement. Findability (ease of finding a mobile site or app through common shopping funnels) is a challenge for many retailers, and few have integrated valuable contextual cues into their apps. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA USA Tel: Fax:

2 For ebusiness & Channel Strategy Professionals November 13, 2014 Updated: November 18, 2014 Who Does Mobile Commerce Well? Lessons From 20 Top Mobile Merchants by Sucharita Mulpuru with Carrie Johnson Fanlo, Douglas Roberge, and Laura Naparstek Why Read This Report One of the most common questions that ebusiness executives currently pose is Who does mobile commerce well? In this document, we provide examples of 20 mobile experiences across a variety of retail sectors that effectively address key challenges to mobile commerce sales and support mobile-enabled commerce in other channels. To quantify the strengths of these mobile experiences and to provide guidance for ebusiness professionals looking to build strong mobile phone shopping experiences, we created a proprietary framework to evaluate these mobile phone websites and their corresponding apps. This report discusses how retailers that excel in mobile phone commerce master six elements findability, utility, searchability, browsability, buyability, and the mobile experience s overall design. Table Of Contents The Size Of The Mobile Phone Commerce Prize Keeps Growing The Attributes Of Great Mobile Sites And Apps Top Mobile Merchants Master Mobile Site Design Groupon, Gilt Groupe, Amazon, ebay, Walgreens, And Target Do Mobile Commerce Well recommendations Focus On Buyability And Utility To Boost Your Score The Most Supplemental Material Notes & Resources Forrester reviewed the mobile websites and mobile applications of 20 retailers from a variety of sectors against a set of criteria spanning six elements in the writing of this report. Related Research Documents The State Of Retailing Online 2014: Marketing August 22, 2014 Three Things Frightening Retailers Now August 12, 2014 US Mobile Phone And Tablet Commerce Forecast, 2013 To 2018 May 12, , Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please clientsupport@forrester.com. For additional information, go to

3 Who Does Mobile Commerce Well? 2 The Size Of The Mobile Phone Commerce Prize Keeps Growing Commerce on smartphones is growing rapidly: Forrester expects mobile device transactions to total $38 billion in 2014; that figure will grow to $74 billion by 2018 (see Figure 1). 1 Though mobile phone sales are growing rapidly, conversion rates for smartphone sales remain much lower than for desktops or even tablet devices. 2 Consumers have fat finger problems, which make transacting on small screens cumbersome, and retailers generally invest little to make their mobile commerce experiences extraordinary. 3 Even among those retailers that believe they need to invest time and money into mobile optimization, deciding what to prioritize is confusing. Figure 1 US Mobile Phone Commerce Will Reach $74B By 2018 US smartphone sales (US$ billions) $28 Travel and food services Retail and daily deals $23 $19 $12 $16 $32 $37 $42 $46 $8 $26 $16 % of ecommerce (excluding travel and food services) (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F) 6% 9% 10% 11% 11% 11% Note: (F) = Forecast Source: Forrester Research Mobile And Tablet Commerce Forecast, 2013 To 2018 (US) The Attributes Of Great Mobile Sites And Apps We created a proprietary rubric to evaluate a retailer s mobile phone presence. The various elements of this rubric are based on research we ve conducted over the past five years. This includes both the features shoppers say they use on mobile phones and the features retailers say they have found the most valuable on mobile phones. 4 We organized the findings into six attributes, each of which had an extensive series of specific questions with different weightings (see Figure 2). Using these, we evaluated 20 retailers with reputations for mobile excellence. The six elements critical to a superior mobile phone experience are:

4 Who Does Mobile Commerce Well? 3 Findability of the site/app. This represents the ease of finding a mobile site or app altogether. How easy it is to discover a site or app given that many shoppers use web-based search or other third-party engines (e.g., RedLaser)? 5 Does the retailer have a reasonable mobile presence in expected places on search engines or other discovery tools? We also looked at whether the merchant did an effective job of exposing its app(s) through the channels available to it, including promoting the app on its mobile website. Utility of the site/app. How useful is the site or app for shoppers? Are the elements of shopping or browsing that are relevant to sites customers available and easy to use? For multichannel retailers, store locators, inventory availability of products in stores, and coupon downloads are usually most important, but for flash sale retailers in the fashion space, for instance, mobileoptimized images are critical. For restaurants, the ability to specify something very specific (e.g., how much cheese a customer wants on a pizza) represents significant utility for a shopper in that mobile shopping moment. For virtually all merchants, assurances of mobile security are essential to enable engagement with the site or app. Searchability on the site/app. An easy and accurate mobile site search is critical for a shopper to find what she is looking for. Shoppers often spearfish that is, they look for specific items or brands. Search that autofills text or corrects misspellings is particularly useful on mobile devices where typos are common. In the future, we anticipate that more retailers will integrate functionality that can search a visual image through a mobile app (e.g., user takes a photo and similar items are found, versus a user entering text into a search engine) or search based on voice recognition. 6 Browsability of the site/app. Because consumers use phones on the go, they are often snacking on content. As a result, a site that is fun and easy to browse is also essential to mobile commerce. Browsability includes elements like vertical and horizontal scroll, high-quality photos, videos, voting, or other social features integrated into the mobile shopping experience. Overall website or app design. Effective mobile design covers the ease of navigating content on mobile sites and apps, as well as other mobile content that shoppers engage with, including and text messages. Retailers should optimize their mobile sites for phones, minimizing the pinching and squeezing required. For apps, the best retailers bring in contextual signals like location, proximity, or time of day to take advantage of the unique features of phones. Buyability from the site/app. Because phones have low conversion rates, it is important for the checkout process to have as few keystrokes as possible. Merchants that partner with third parties like PayPal or have alternative payment methods like cash on delivery have high buyability scores. Starbucks has a widely used mobile wallet solution that enables speedy transactions from an app and allows customers to check account balances any time. Perhaps Uber represents mobile commerce s most effective example of buyability, in which the card.io function enables customers to upload their credit card with a photograph that then populates their account. Uber automatically bills customers thereafter for any car ride they take on that card.

5 Who Does Mobile Commerce Well? 4 Figure 2 Attributes Evaluated Attribute Percent of total Explanation Specific criteria Findability of the site/app Utility of the site/app 10% 25% Ease of finding the company s mobile presence (e.g., mobile search, app store search, third-party retail aggregation sites) Company s choices in addressing key customer needs in mobile commerce (store locations, product research, purchasing) Do search results on the major search engines (e.g., Google, Bing, etc.) lead users to the mobile website? How visible is the site on mobile comparison shopping engines (Google shopping, RetailMeNot, RedLaser, Shopping.com, Nextag, PriceGrabber)? Does search on the app store(s) lead users to the correct mobile application? Is there ambiguity around which search result is the primary app? Does the mobile website and/or mobile web searches prompt users to download the firm s app? Is there deep linking from the website or company s sent to mobile devices? Is the firm s mobile website/app transactional? Are users able to log in? Are users automatically logged in if coming from another touchpoint that identifies the user (e.g., app, , etc.)? Does the mobile website/app provide multiple ways to support the shopping experience offline? Are the firm s policies (e.g., shipping, privacy, returns) available on the mobile website/app? Is there easily accessible customer service? Is a store locator available on the mobile website/app? Does it support user goals? Searchability on the site/app 10% Presence of and ease of use of on-site search capabilities, if relevant Does the mobile website/app have an easy to find/use search box? Are keyword-based searches appropriate and precise? Does the mobile website/app allow users to sort search results/categories? Are the sorting features rich?

6 Who Does Mobile Commerce Well? 5 Figure 2 Attributes Evaluated (Cont.) Attribute Percent of total Explanation Specific criteria Browsability of the site/app Overall website or app design Buyability from the site/app 20% Ease of navigating around the site and discovering new products or services 10% 25% Mobile site optimization; use of contextual cues (e.g., location) for app Ease of purchasing through the mobile touchpoints Does the global navigation support user goals? Are there multiple options for what users can do on the mobile website/app (e.g., shop, find a store, call customer service, etc.)? Does the mobile website/app include photos, copy, pricing, and ratings and reviews information on the product detail page? Does the website/app allow users to check in-store availability of products? Does the website allow users to reserve items at a store? Is there an element of fun incorporated into the mobile website/app? Is the mobile website optimized for mobile phones? Does the app content change based on location or time of day? Does the app support cross-touchpoint customer journeys? Does the app integrate with Passbook and/or loyalty programs? Does the app allow users to share products via social networks (e.g., Pinterest, Facebook, Twitter)? Does the app integrate beacons or make you access the Wi-Fi network? Does the application have a bar code scanner? Does the application allow credit card information to be entered with the camera? Does the mobile website/app have alternative payment options (e.g., PayPal Express)? Is there a clear call to action on product pages? Does the shopping cart follow best practices? Can users explicitly save items in the cart for later? Is the total cost of purchase displayed in the link to the cart? Is the cart persistent across devices? If the site/app enables transactions, how well is checkout executed (e.g., minimum keystrokes)?

7 Who Does Mobile Commerce Well? 6 Top Mobile Merchants Master Mobile Site Design We evaluated the mobile websites and apps of 20 retailers across the six attributes detailed above and averaged the findings from each of the attributes (see Figure 3). We scored each attribute on a scale of -2 to +2, and then weighted them based on which factors inhibit mobile usage and conversion most. We prorated totals to a 100-point scale; a score of 100 indicates that all of the retailers received +2 on a given attribute. The attribute that retailers scored highest on was the overall mobile design for their websites (94); incidentally the lowest score was overall mobile design for apps (55). After evaluating 20 merchants, several key findings emerged: Browsability trumps searchability for mobile Web. Most mobile sites had strong browse experiences, meaning that photos were well presented and easy to scroll. Shoppers can easily pivot on most sites and apps to other categories to discover new products. Spearfishing consumers, however, will find mobile search lacking on many retailer sites and apps. The key challenge is that the limitations of screen size inhibit sorting and filtering effectively, which makes it difficult for shoppers to navigate through search results that often yield hundreds of products. Mobile utility has many creative use cases. The merchants we evaluated went beyond the standard offerings of store locators or ratings and reviews on product pages. The average utility score for mobile apps was 90. Many deliver impactful solutions to support commerce in other channels. Walgreens enables shoppers to order prints from their mobile phones, which can then be picked up in stores. Apple allows customers to schedule appointments with the Genius Bar from within its app. Target provides information on where products may be in a particular store. Buyability is generally strong across the board. The retailers we evaluated for the most part all enable shoppers to purchase easily on mobile phone sites and apps. Often this happens through unique, merchant-specific solutions. Pizza sites and apps, for example, allow for cash on delivery, which eliminates keystrokes for that retail sector. Many flash sale and daily deal apps force shoppers to log in before they even begin browsing. After logging on once, repeat shoppers can quickly purchase with a few clicks. None of the merchants we evaluated took the clever step on mobile devices that ebags did, allowing shoppers to their mobile cart to themselves (see Figure 4). Retailers have optimized their sites for small screens. Top merchants, with a few exceptions (including Apple, ironically, whose mobile shopping pages require pinching), have all created mobile-optimized experiences for their mobile sites on iphones and in some cases on Android devices, as well. The majority of the retailers we evaluated have mobile-phone-specific sites, while a few rely heavily on responsive design for key pages in the mobile shopping experience. Context integration remains weak for apps. Few retailers integrate elements like location or time into the mobile shopping experience. Some exceptions are Apple and Starbucks, which do sense location and offer information related to nearby stores. But the idea of mobile moments,

8 Who Does Mobile Commerce Well? 7 special features that address a person on the go with her phone in hand, are still rare. Merchants could leverage context to locate a store associate or to provide real-time feedback on store experiences or inventory levels, but none of the retailers we evaluated did that. Findability is the Achilles heel of many retailers. Retailers that focus on paid search on desktops also tend to invest in paid search on mobile search engines. However, shoppers often use tools like RedLaser and RetailMeNot on their mobile devices, and many of the merchants we evaluated did not have a presence on those third-party engines. Furthermore, app search tools on the Apple App Store do not correct misspellings or help to find apps for generic search terms. A few merchants like Gilt Groupe encourage shoppers to download an app or open an already downloaded app from their mobile phone site, but that was not ubiquitous (see Figure 5). Figure 3 Averages By Attributes Attribute Mobile website Mobile app Findability Utility Searchability Browsability Overall mobile design Buyability Figure 4 ebags Enables Shoppers To Their Mobile Cart To Complete Transactions Later Source: ebags mobile app

9 Who Does Mobile Commerce Well? 8 Figure 5 Gilt Groupe Promotes Its App On Its Website Source: Gilt Groupe mobile app Groupon, Gilt Groupe, Amazon, ebay, Walgreens, And Target Do Mobile Commerce Well Of the 20 companies that we evaluated, four were pure plays, and all of them scored more than 85 out of a possible 100 (see Figure 6). Large pure-play sites have effectively simplified their mobile user experiences and figured out how to capture sales through small screens. Overall, the companies that did mobile commerce best were: Groupon and Gilt Groupe. Of the companies Forrester evaluated, Groupon had the highest score: 93. Gilt Groupe was not far behind with a score of 90. These sites deliver simple yet high utility to shoppers, lovely browsability, and easy buyability. While daily deals and flash sales are different types of businesses, the playbook for their success is similar: mobile-optimized (often personalized) s that engage customers, universal customer IDs with payment information attached to accounts, apps that use that payment information if a shopper logs into the app, and inventory that may disappear, which creates a urgency among buyers.

10 Who Does Mobile Commerce Well? 9 Amazon and ebay. We gave the behemoths of US online retail mobile commerce scores of 88 and 87, respectively, for their strong small screen experiences. Buyability and searchability are the strongest elements for these sites, which are often able to capture transactions for shoppers on the go who quickly want to purchase something with a minimal number of keystrokes. The large customer base of these sites is particularly helpful to their mobile presence, as their millions of frequent shoppers can use the same login details for phones as for desktops. Walgreens and Target. The top-scoring brick-and-mortar retailers were in the drugstore and mass-merchandise categories. We gave Walgreens and Target scores of 89 and 88, respectively. These companies are particularly strong at enabling mobile sales in their store channels, delivering against specific use cases that shoppers value: finding and saving coupons, refilling prescriptions, checking local store inventory, and where possible locating items on a shelf in a particular store. As mobile wallets grow in reach and ease of use, we expect these mass, national chains to propel their mobile commerce presence even further. Figure 6 Overall Mobile Scores Of Sites And Apps Evaluated Site Aggregate score Groupon 93 Gilt Groupe 90 Walgreens 89 Amazon 88 Target 88 ebay 87 Nordstrom 87 Best Buy 86 Sears 86 Walmart 85 Site Aggregate score Staples 85 Sephora 84 Gap 83 Papa John s 83 Victoria s Secret 81 Macy s 80 Dominos 80 Starbucks 80 Kohl s 78 Apple 72

11 Who Does Mobile Commerce Well? 10 Recommendations Focus On Buyability And Utility To Boost Your Score The Most While mobile commerce is in its early stages, ebusiness professionals in retail can learn many lessons from the largest and most successful mobile commerce companies. ebusiness professionals looking to expand their mcommerce presence should heed these recommendations: Consider your customer s mobile moment(s). Forrester s mobile mind shift introduces the concept of mobile moments : opportunities to address a customer s specific need when they have their phone at hand (e.g., hailing a cab on a crowded city street or paying for a coffee with a digital wallet). Evaluate your journey map and look for solutions that can enhance a shopper s interaction with you before, during, and after the moment of truth when he engages with your product or brand. In stores, for instance, shoppers are often looking for store associates. Can a retailer use a store associate s own devices, beacon technology, and a shopper s app to help pinpoint someone s location within a store? Be creative about buyability. The standard format for buying on a desktop device is to enter credit card information, shipping details, and a billing address. This can add up to dozens of keystrokes. If new checkout tactics are cumbersome, consider allowing customers to their shopping carts to themselves so they can complete transactions at a later time on a larger screen. Promote customer service on the phone. Calling a customer service agent can sometimes be the fastest way to resolve an issue, particularly for transactions that may require human support. Search results through Google, for instance, often turn up merchant contact details and one-click dialing for local businesses. Web businesses should experiment with making customer service contact details (e.g., phone, , text even, chat) more transparent on their own sites and apps, as well. Additionally, ensure customer service is responsive, particularly with or text feedback. Dashboards and SLAs with reporting tools ensure that all shopper questions and concerns are responded to within a set time frame. Cross-market your app if you have one. Because it is difficult to find an app through the search boxes in the various app stores, it is essential to market one s own app aggressively. For multichannel retailers, this means promoting it in stores but also marketing it on packaging, within , and on the mobile site itself.

12 Who Does Mobile Commerce Well? 11 Supplemental Material Methodology We selected 20 retailers from a variety of sectors that are important to retail overall and to mobile commerce. We chose mass merchants, department stores, pure plays, flash sale and daily deal sites, quick-service restaurants, and specialty retailers. We ultimately selected those retailers that we knew to have a commitment to mobile internally, that likely generated substantial revenues through their mobile presence, and that had a mobile app. We evaluated the various mobile sites and apps on the iphone 5S device on a Wi-Fi connection. All of the attributes were scored on a scale of -2 to +2, and we prorated totals to a 100-point scale; a score of 100 means that a retailer executed each element in a manner substantially above industry standard. Each of the scores for an individual attribute was then calculated to a composite score; attributes received weighted scores based on their importance to the overall experience. Endnotes 1 Source: Forrester Research Mobile And Tablet Commerce Forecast, 2013 To 2018 (US). 2 In August 2014, the average conversion rate for a retailer on a smartphone was 1%. The average conversion rate on a desktop or laptop was 2.7%. Source: Adobe Digital Index, Adobe ( 3 In 2013, 41% of ebusiness professionals said that their organizations spent less than $500,000 on mobile initiatives. Source: Q Global ebusiness And Channel Strategy Professional Online Survey. 4 Forrester s joint study with Shop.org, The State of Retailing Online, showcased a number of top mobile priorities for retailers. Additionally, Bizrate Insights/Connexity has surveyed shoppers on behalf of Forrester to gather the consumer perspective. To learn the results of the most recent State Of Retailing Online report, please see the August 22, 2014, The State Of Retailing Online 2014: Marketing report. 5 Forrester s joint study with Shop.org, The State Of Retailing Online, shows that search is a key way that consumers find a mobile experience. For more information, see the August 22, 2014, The State Of Retailing Online 2014: Marketing report. 6 Functionality was introduced on the Amazon Fire phone, but other companies like Superfish have more promise as a white-label solution to other retailers.

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