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From “E-COMMERCE” to “M-COMMERCE”… Retail becoming a shopping experience !

It is becoming increasingly difficult to attract the attention of consumers who are not only more careful what they want to buy, post recession, but also spoilt for choice. Retailers have been compelled to seek out new avenues to grab eyeballs and one of the latest obsessions is IT-enabled options. This not only increases the visibility of their products, but also brings in an emerging segment of consumers, who are young, have money to spend and are ‘mobile’.

Indeed, long gone are the days when shopping was only possible through traditional ‘in store’ commerce, retail industry today is driven by e-commerce, social media and technology. With the consumer spending more and more time online, e-commerce changed the way people shopped as deals are easily cashed with just a few clicks, bringing in more business for brands and more options for the customer. But with an unimaginable growth in technology the future is in allowing the consumer to purchase when and where he wants to, which includes m-commerce (mobile), f-commerce (facebook), s-commerce (social) and v-commerce (video-enabled, e.g. YouTube).

According to industry experts online sales are predicted to represent 8% of all retail sales in theUSby 2014, up by 6% in 2009. Following the closure of the 2010 holiday season, retailers are hoping higher profits and another year of sales growth specifically from e-commerce. Moving away from e-shops came in picture ‘f-commerce’ with already several retailers creating small stores on facebook, turning the social networking site into a full-fledged channel in the world of retail. Improving further with the times, fusing online with IT, known as next generation e-commerce, 2011 is the year of m-commerce enabling the users to access the internet without needing to find a place to plug in.

Mobile commerce was born in 1997 and the first conference dedicated to it was held in London in July 2001. From 2001 to 2008, there has been a gap of almost a decade for this phenomenon to catch up to the apparel industry, but the sudden velocity with which it has shot forward into 2011, specifically in the apparel sector, is awe inspiring. Needless to say, it is the youth market that has brought in this new trend showing a positive growth with mobile sales getting double in the fourth quarter of 2010. Statistics show that 50% of smartphones owners such as the iPhone, Blackberry and Android, majority of who are above 15 and under 35 have now completed some sort of purchase on their mobile, increasing by 20% over just nine short months. The results clearly indicate the growing trend that smartphones are being used more and more as an essential lifestyle accessory, bringing the entire shopping experience, right into the palms of the consumers’ hand – and fashion retailers have finally risen to meet these demands.

While the concept of shopping through your mobile phone is still relatively new, a recent report from Forrester Research predicts that the mobile commerce industry will take off in the next few years. Currently, only 2 per cent of online purchases are made through mobile devices, but as smartphones and other mobile tools become more prevalent, the industry is expected to grow 39 per cent per year for the next five years, jumping from $ 6 billion in 2011 to $ 31 billion by 2016. However, even with the growth, mobile commerce will only account for 7 per cent of total e-commerce sales by that point, the report predicts.

“Mobile commerce will transform retail, both because the transparency of pricing will force big-box stores to be much better merchants or die because store associates armed with mobile devices can now do everything from save lost sales to carry a POS device in their hand,” Sucharita Mulpuru, a Forrester Vice-President, Principal Analyst and one of the authors of the report, wrote in a company blog post. “And the most efficient retailers won’t even have their store associates doing those things – they’ll have their customers doing them themselves.”

“Spending is higher on the web, but the mobile apps help brands reach the consumer wherever they are with their mobile device, and offer another engaging way to interact with the brands, strengthen brand loyalty and to offer a creative way for shoppers on the go to browse a brand at their own convenience via an iPhone, iPad or another connected device. This ultimately helps drive sales. While a consumer may spend a few minutes window shopping via a mobile app but may not make a purchase, that action helps convert more sales online and in-store.” claims James Gardner, CEO and Co-founder of CREATETHE GROUP, an interactive agency whose clients include Burberry, Calvin Klein, DKNY, Neiman Marcus (NM) and others.

Most recently, L.L.Bean, a leading multi-channel merchant of quality outdoor gear and apparel for nearly 100 years, finally embraced mobile technology and launched its first m-commerce website and will soon launch a mobile commerce site for L.L.Bean’s heritage brand, L.L.Bean Signature in liaison with mobile commerce technology provider Usablenet Inc. Bringing real hype to this concept, Polo Ralph Lauren, was the first luxury retailer to launch a mobile shopping site in 2008 using 2D bar codes. Special software needed to be downloaded into camera phones that scanned the codes and directed it to a phone friendly version of the Ralph Lauren website. Other labels like Zara, Gant, D&G, Donna Karan, Hugo Boss,Victoria’s Secret, Abercrombie & Fitch, and multi-channels like eBay and Net-a-Porter were some early innovators in this area, with only more and more brands to follow the trail.

Observing this sudden boom in demand, big online names are coming up with newer technologies with more applications and easier access comes the need to stock more, provide more choices and quick payment options. For instance, Google Wallet, using NFC-Near Field Communication – a wireless technology that enables data transmission is the new talk of the town. It is a free mobile app that will turn your phone into a wireless credit card and stores virtual versions of your existing plastic cards on your phone, along with your coupons, and eventually, loyalty and gift cards. This Android app has tied up with Sprint’s Nexus S 4G, MasterCard credit cards issued by Citibank which will use MasterCard’sPayPass method to process the payment. Macy’s is partnering with Google Wallet to not only enhance the company’s in-store shopping experience, but set itself apart from competitors in terms of easy payment. The company is launching Google Wallet payments in 5 cities namelyNew York,Washington,Chicago,San FranciscoandLos Angeleswhich will cover 177 stores, the biggest consolidation of mobile retail at the moment. Other companies like American Eagle Outfitters, Guess, Bloomingdale’s, RadioShack, The Container Store, Subway, Foot Locker and Walgreens, have also tied up with Google Wallet, making it the next big thing.

Not only mobile phones, but the I-pad too is not far behind. High-end retailers would look at providing a custom in-store experience for walk-in customers using these tablets. The usability of this tablet could be explored for the store associates/attendants for functionalities such as item search etc. Given the large screen of the tablets, it can prove to be extremely useful in providing a real life experience such as exhibiting products in various colours and viewing merchandise that is otherwise unavailable in stock. With the iPad gaining the status of the IT-handbag accessory, working on the concept of ‘no more waiting in the line’ – IT will take advantage of pay-on-the-spot by using the iPad tablet computer to manage checkouts in the near future. In a most recent example, Conde Nast’s Glamour magazine has partnered with The Gap Inc., an American clothing and accessories retailer based inSan Francisco, to produce a reality show for the iPad that features the retailer’s new spring collection that readers can buy via the application. The ‘Glamour Girls’ reality show application, which is available as a free download, incorporates Gap’s spring collection looks, that includes five primary brands namesake Gap banner, Banana Republic, Old Navy, Piperlime and Athleta.

Using mobiles applications apart from shopping, customers can also read the company’s content, magazines and watch exclusive videos as well. The skyrocketing trend inJapanat present is the integration of websites with magazines, and television programs. Efforts are also being made to sell mobiles in the market within a year with pre-installed bar code readers. This trend is currently spreading throughout Europe, and is expected by industry experts to make its way from Asia to theUSsoon.


One Comment

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  1. Iluminada Langager / Dec 13 2011 11:33 am

    Great post!

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