Six Steps for Building a Mobile Strategy:

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1 Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy Endeca Whitepaper for RETAIL

2 Table of Contents EXECUTIVE SUMMARY 2 Introduction 2 Mobile Commerce: A Reality etailers Can t Ignore 1 Start with a clear strategy 3 Define Mobile s Purpose in Your Organization 2 Select the right mobile environment(s) 3 Understand the Benefits of Mobile Sites and Mobile Apps 3 Prioritize devices to support 4 Study Usage Patterns to Drive Platform Support 4 Decide whether to own or outsource technology 5 Research the Approaches Available to Build Your Offering 5 Determine what existing technology you can repurpose 6 Identify Web site Technologies to Leverage in Mobile 6 Align technology with short-term and long-term goals 6 Build a Tiered Roadmap That Supports Your Strategy CONCLUSION 7 ABOUT ENDECA 7 Footnotes and Recommended Reading 8

3 executive summary If you re an online retailer without mobile commerce capabilities, you re missing out on sales. Organizations are working fast to meet the mobile demand and compete for the billions of dollars up for grabs, but many are rushing into mobile without realizing that success hinges on the right technology. Selecting a technology approach for your mobile goals will be critical to drive cross-channel activity, your user experience, and ultimately, the profitability of your mobile initiative. In the following pages, we ll describe the six steps every organization must take in order to make the best mobile technology decisions for their business. INTRODUCTION Go transactional Capture additional sales by allowing users to purchase from you anytime, anywhere. In their first three months, Marriott and Pizza Hut were able to generate over $1 million in mobile transactions. Look for the Endeca paper 10 Tips for Creating Mobile sites & Apps Mobile commerce: a reality etailers can t ignore Smartphones have dramatically changed the commerce landscape. Beyond a retail research tool, mobile commerce has evolved from a lightly-used, nice-to-have option for early adopters into a profit center for organizations early to the game. Millions of users are now engaging with retailers via mobile devices, and doing so more frequently with daily mobile Web access doubling every six months. In fact, traffic to mobile commerce sites and apps increased 50% in the first half of Having a mobile presence will soon be just as critical as having an online presence. However, many businesses have a panicked approach, spurred by thoughts like we need an app or our competitors are mobile. Replace reactionary thinking with defined goals and a phased strategy for moving into the mobile space. Many firms quick to market with haphazard solutions have scrapped their initial mobile offerings and replaced them learning lessons they couldn t anticipate, but that you can benefit from. In order to avoid this same fate, how should you start focusing your company s mobile initiative? The answer arrives in two stages. The first revolves around the decision of technology: selecting what infrastructure and resources will be needed to support your strategy. The second focuses around functionality: how developing a compelling experience will drive usage and help you achieve your mobile goals. This paper focuses on six steps that will help you make the best technology decisions for your mobile strategy. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 2

4 Questions to ask when developing a mobile technology strategy: How does mobile fit into our overall strategy? What are our tiered priorities for mobile? How can mobile drive cross-channel activity? What is our timeline and internal readiness like for mobile? How will mobile benefit our customers? 1 Start with a clear strategy Define Mobile s Purpose in Your Organization To avoid pitfalls, define the mobile goals of your organization to guide budget, internal support, and development timelines. Is your goal to initially provide shoppers with a research tool to assist them through the buying process? To boost customer loyalty? Adding a channel to capture more sales? Are you targeting sophisticated smartphone power-users, or looking to provide a one-size-fits-all solution to reach a broader audience? There is no right answer and there is no one solution. Instead of bending your goals based on what s available today, build a mobile strategy around what s right for your business in the long term. Regardless of your specific objectives, define how mobile will play into your multichannel strategy, and how it will ultimately improve your customer experience. 2 Select the right mobile environment(s) Understand the Benefits of Mobile Sites and Mobile Apps Once you have your goals defined, understand where and how your target audience is already interacting with the mobile channel. There are two mobile environment options to choose from: sites and apps. Both mobile sites and apps have benefits, so align support based on the goals of your strategy, and what your audience is likely to use. > Mobile sites appear inside the browser on any Internet-enabled mobile device. For example, the iphone utilizes Safari, Android phones use Chrome, Blackberry devices use Opera, etc. The advantage of mobile sites is that they are accessible by 99% of Web-enabled devices. Mobile sites do not require the user to download anything, and if set-up properly, can detect the user s device and automatically format the content for optimal viewing on that specific platform. > Mobile apps require a device-specific download from a marketplace, like the App Store or Android Market. Because apps are native on devices, they provide enhanced functionality, like GPS-enabled location services, barcode / picture scanning, and the ability to store saved browse and shopping cart information. Separate apps have to be built for each mobile platform, so prioritize build-outs based on the device usage of your audience and the greater market. So, should you develop a mobile Web site, or a mobile app? We know that the traffic to retail mobile applications has increased 91% in the last year, and mobile Web use for the same purpose has increased 47%. 2 Both mobile sites and apps will likely be valuable to your longterm mobile strategy, and you may chose to invest in both environments to ensure proper coverage. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 3

5 3 Prioritize devices to support Study Usage Patterns to Drive Platform Support Once you ve selected the environment(s) to develop, focus on mobile devices to support. You should start by researching which platforms your target audience uses, and reconcile that with the behaviors of the larger consumer landscape for the greatest impact. It s no surprise that iphone users engage with the mobile channel the most. Android-based phones are a close second, distantly followed by Symbian, RIM Blackberry and Windows Mobile OS-based devices. 3 The mobile device landscape is fragmented. Because of user adoption rates and the speed at which devices and capabilities change, platform-specific user engagement will fluctuate. However at this time, here s some of what we know: iphone is the Safest Starting Point The iphone presents the highest immediate likelihood for success. Research shows that iphone users have the highest level of engagement among users of all devices, are evenly segmented throughout the entire market (ages ), and are more likely to pay for their apps. 4 According to Nielsen, iphone users consume the most apps by far, averaging thirty-seven apps per individual user. In addition, 85% of iphone users access the mobile Web weekly, drastically higher than the average 9% of the total market. 5 Android is a Growing Trend and a Hit with Men Android is second only to the iphone for users that actively engage with mobile content. 73% of Android users are male, and Android has a stronghold on the year old market, quickly gaining on Apple. According to Nielsen, Android users have an average of twenty-two apps per user. 6 After the iphone, this is the platform to target for development efforts. Blackberry is Everywhere, but Stay Focused on Web Blackberry is a distant fourth for user engagement. But given its popularity (and with executives granting budget dollars), it usually comes up in the discussion. The majority of Blackberry users are 26 42, are evenly male-female, tend to have higher incomes, and use the mobile Web frequently. But according to Nielsen, Blackberry users only have an average of ten apps, with iphone users consuming up to 50x more data than Blackberry users. 7 So if you re going to design for Blackberry, it s generally safer to develop a mobile Web site that presents well in this environment over an app at this time. To ensure the greatest adoption rate possible, do your research and carefully examine where and how your target market is engaging. If your budget does not permit building out a series of device-specific apps, choose one or two of the best-fit devices to support, and enable other users to access your mobile storefront via a mobile Web site. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 4

6 4 decide whether to own or outsource technology Research the Approaches Available to Build Your Offering Technology will be the backbone of your mobile initiative. There are many options for building a mobile offering ranging from fully outsourced, to service-driven solutions, to homegrown technologies built and managed internally. Many organizations struggle with the technology decision. Will a low-cost, outsourced solution be able to support long-term growth? Will investing in a robust infrastructure cost too much upfront? Available-to-hire mobile skill sets are scarce, which is why the vast majority of organizations have engaged a provider. Below are examples of four technology approaches to evaluate when developing a mobile strategy, and the pros and cons of each. Use this framework to determine the best approach to support you current need and future growth: Mobile Services Providers Software Providers Agencies Homegrown Description Fully outsourced mobile solutions. Includes development and hosting of mobile sites for upfront fee plus ongoing subscription costs. Number of small, start-up firms in the pure-play mobile space. ecommerce software companies with an expanded offering into mobile. Typically established companies with long track records in ecommerce. Full-service design and implementation firms. Management is handed off to customer, or managed for a fee. Typically large, established interactive agencies that have expanded into mobile. Mobile site built in-house with existing expertise. Typically expands on technology and skill sets currently owned. Pros Rapid time to market Relatively low upfront cost Mobile-specific expertise Tight integration with existing infrastructure Robust capabilities and features Leverages existing internal skill sets and tools Easily maintained and supported over long-term Advanced, custom designed features Rich environments Integration with existing infrastructure Tight control over features Integration with existing infrastructure Cons Limited features Duplication of Web site data and configuration into a second technology stack Not typically integrated with existing site infrastructure and design App development not typically offered High TCO over long-term Risk associated with small startups Mobile a portion of their overall technology investment Entire cost incurred up-front Higher cost engagements Lack of in-house control Long lead times Scarcity of mobile development skills Significant upfront & ongoing maintenance costs Internal resource ramp time means slower time to market Bottom Line These providers create good-enough mobile environments quickly, but lack a consistent user experience with your primary Web site, and integration with existing ecommerce technologies. Subscription model means lower cost to get started, but higher cost over several years. View as a short term fix. Using an established software provider will guarantee quality, provide consistency, and utilize existing skill sets, but some providers may lack mobile expertise and require a greater up-front cost in year one. These custom engagements result in highly-differentiated user experiences, with the added benefit of integration with existing technologies. However, they often carry a hefty cost, are custom built and thus expensive to manage, and difficult to change the user experience. Homegrown solutions ensure total control over features, and the ability to develop to your specific needs. However, in-house development often doesn t anticipate future needs, and may prove inflexible with changing market demands. To be successful, be sure you have a dedicated team with experience developing transactional mobile environments. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 5

7 5 determine what existing technology you can repurpose Identify Web site Technologies to Leverage in Mobile In most cases, you should not have to make large investments in new technologies to support mobile expansion. If you have a Web site, your core technologies (ecommerce platform, merchandising tools, CMS, user reviews, product information) should and can be leveraged in the mobile channel. Regardless of your specific strategy or approach, extend as much of your existing technology into the mobile channel to maximize your investments and simplify management. If you find the need to stray from your existing ecommerce systems for pieces of your mobile offering, you should still strive to incorporate the tools used to manage your Web site user experience. Forrester Research has been a proponent of this approach, advising that existing Web site tools should be leveraged to control the mobile user experience, merchandising execution, and costs. 8 Your mobile storefront should be as actively analyzed and managed by your internal business users as your.com Web site. Integrating these tools into your mobile offering will not only maximize the value of your existing technology investments, but will also ensure greater consistency of the user experience and branding efforts across all your channels. 6 Align your technology with short-term and long-term goals Build a tiered Roadmap That Supports Your Strategy Maximize your budget and get projects moving by aligning development of mobile services with your strategy, and stage build-out accordingly. Chances are you won t have the budget or resources to build-out your entire mobile program upfront, and you ll need quick results to secure additional funds and support in the future. Make sure you re selecting the right technology to support your specific mobile goals and long-term strategy. If your goal is driving mobile sales, incorporating confidence-building user reviews or investing in a streamlined checkout process will prove more fruitful than barcode scanning. Rate what s most important to your strategy, adjust build-outs accordingly, and iterate based on how your customers are interacting. Keep reevaluating, and revisit your roadmap every quarter. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 6

8 Conclusion In order to stay competitive, you will need to have a long-term mobile strategy. For the greatest opportunity of success in the mobile channel, root your strategy in technology aligned with your mobile goals, the usage patterns of your target audience, and your budget. Build a phased mobile roadmap and leverage as much of your existing technology as possible to get projects moving, maximize budget, and extend a consistent experience into the mobile channel. About Endeca Endeca s search applications and merchandising tools power the user experience, boost revenue, and increase customer loyalty for 45 of the Top 100 sites. ecommerce organizations can now extend proven Endeca solutions into the mobile channel, utilizing the same tools and technologies powering their Web sites. With Endeca, merchandisers can use one platform to control their mobile sites, apps, and.com Web site. About the Authors John Andrews is the vice president of marketing and product management for ebusiness at Endeca. John has spent his career helping retail, distribution, manufacturing, and media organizations define and execute on their online strategies, providing guidance on best practice technologies and processes for optimizing the online customer experience. Brenna Johnson is the product marketing manager responsible for marketing B2C ecommerce and Mobile solutions to ebusiness clients at Endeca Technologies. In addition to developing multichannel best practice strategies, she also assists customers with analyzing Endeca s impact post-implementation. To learn more about Endeca Mobile Commerce, read the Endeca paper 10 Tips for Creating Mobile Sites & Apps, or visit endeca.com/mobile. ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 7

9 Footnotes and Recommended Reading 1, 5-7 The State of Mobile Apps, The Nielsen Company, June See also, US Mobile Forecast, 2009 To 2014, Charles S. Golvin, Seth Fowler, Forrester Research, November How to Build a Mobile Web site, Julie Ask, Forrester Research, June Mobile Apps and Consumer Product Brands, Tobi Elkin, emarketer, March Creating a Mobile Services Product Road Map: A Framework for Prioritizing Proposed Mobile Services Offerings, Julie Ask, Forrester Research. July Making the Case for the Mobile Internet, Julie Ask and Seth Fowler, Forrester Research, July See also: Profiling your Best Mobile Customers, Thomas Husson, Forrester Research, July Retail Research, 2010: Aligning Business Processes and IT, Hung LeHong, Gartner, July The State of Retailing Online 2010: Marketing, Social Commerce, and Mobile, Sucharita Mulpuru, Forrester Research, July AdMob Mobile Metrics Highlights, Admob, May Why Mobile s Time Has Come: Consumer-Facing Firms Must Develop, or Revive, Their Mobile Strategies, Ian Fogg, Forrester Research, July ENDECA TECHNOLOGIES Six Steps for Building a Mobile Strategy: Tech Considerations for Your Long-Term Strategy 8

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