- June 2011
- Posted By Nitzan Shaer
- 0 Comments
The MIT/ Stanford Venture Lab event Beyond Bricks and Clicks saw a great discussion earlier this week on the opportunities and innovations in mobile commerce for retailers, banks, startups, and brands. Most importantly, what it all means for consumers. It was yet another sold-out event for VLAB, attracting entrepreneurs and investors from all across the valley.
I was fortunate to be moderator of this panel (see my slides embedded at the bottom of this post), which included some of top thinkers in this space: Aaron Emigh, CTO and Co-Founder, Shopkick, Inc. (which has already delivered retailers a boost in sales through their mobile commerce), Ben Hedrington, Director of Web Strategy and Mobile at Best Buy Co. Inc. (one of the most innovative tier-one retailers when it comes to mobile commerce), Matt Weathers, VP Product, ShopSavvy (boasting over 10 million registered users) and Bob Borchers, now General Partner at Opus Capital Ventures and formerly head of product marketing for the original iPhone team— check out Bob rapping about iPhone here.
As I flew back to Boston, I jotted down some of the ideas we discussed at the panel.
1. How big is this mobile commerce thing, after all? The prevailing perspective at the session is that mobile commerce isn’t a subset of e-commerce. It’s a part of total commerce. To give you a feel for the numbers, US e-commerce retail sales are estimated to be $200 billion in 2011. But if we think of mobile commerce as a subset of total commerce, which is estimated to be $3 trillion in 2011, the magnitude of the opportunity begins to be clear. Why is it a subset of total commerce? Because so much of offline commerce will be driven by the information and influence available to consumers via online resources while they are in the retailer’s physical store. Price comparison, consumer reviews, friend’s reviews, up sell and personalized advertising will all impact offline purchases.
Aaron put it best when he said that mobile commerce combines the best parts of e-commerce with the best of offline commerce.
2. Mobile commerce is impacting every phase of the consumer purchase cycle, including awareness, intent, purchase, loyalty and social recommendations. The panel elaborated on examples for each of these phases, but this framework helps us to think about the various use cases in which mobile commerce will play a major role.
3. Retailers and advertisers have a tough task ahead of them. In many of the hyped mobile commerce opportunities, at the end of the rainbow we found a technology in search of a need. But the consensus here was that the retailers that figure out what consumers truly need and then drive them to a change in behavior will win. It still remains an open question whether consumers will choose retail-driven applications or third-party apps when shopping. The results of this tension will have wide ramifications on the value each of the players will be able to capture in this fast changing value chain.
4. Another important area in mobile commerce is the idea of curation. Typically, a consumer has 30-120 seconds in an average mobile commerce transaction. So retailers need to curate the selections available to consumers to ensure that they have personalized, highly appealing and enticing offerings. One startling statistic: 56% of consumers rate their mobile shopping experiences as poor. It’s obvious there is much opportunity to be had here.
Overall, I think it’s important to remember that although the potential impact is immense, we are just at the beginning. We’re just scratching the surface. This is TV in 1948.
Back in 2001, Clay Christensen wrote a piece in HBR. The article, entitled Skate to Where the Money Will Be, recounts the story of hockey great Wayne Gretsky, who said the key to winning was to skate to where the puck will be next. Where the puck is now is useless. This story, which I’m sure we’ve all heard in a business context, is an important lesson.
Instead of focusing on the present, we need to think down the road a bit—past the hype and excitement of the present, past the wild forecasts of tens of billions of dollars in revenue, and toward the ultimate goal.
What will mobile commerce be in a few years? How will it satisfy consumers? How will advertisers and retailers drive and take advantage of this major change? The ones who get those questions right will be the winners.