October 22nd, 2012

Who are the top and worst performers in m-commerce?

We recently did a study on who are the top performers and worst performers in mobile commerce on behalf of a client. What we found was unsurprisingly a direct correlation between the web and mobile performance of the same brands and thus that many of the companies are failing or falling behind for the second time. Typically the worst performers had simply translated their website to an app or mobile website without using the unique benefits of the mobile device or more importantly taking into account the customer touch points of mobile user.

Before we analyse the findings further here is a short overview of who we identified as some of the the top vs bad performers.

Top performers:

  • Pioneer online retailers such as Amazon, eBay, etc
  • Travel booking companies including e.g. Kayak, InterContinental Hotels, Marriot, etc
  • Offer/Deal companies including Groupon, LivingSocial, etc
  • Brands such as Nike, Coca Cola and Starbucks that are constantly experimenting and seldom compromise on quality

Our criteria for a top performer is that they either
a) have mobile traffic above market average (approximately 15% of total traffic in 2011) or
b) 5% or more of the transactions also come from mobile today
c) proven case studies driving retail store sales and footfall

Bad performers:

  • Fashion Retailers – H&M, Zara, Forever21, Ralph Lauren, etc
  • Electronics / Phone / Gadget Retailers – Media Markt, Dixons (including e.g. Pixmania), Best Buy / Carphone Warehouse, etc
  • Furniture / Home / DYI Retailers – Ikea, Sears, Habitat, Home Depot, Bauhaus, etc
  • FMCG – P&G, Unilever, Masterfood, Nestle, etc
  • …and generally all SMEs as any mobile presence simply consists of a basic mobile website or show case app

Our criteria for a bad performer is
a) no mobile web site presence at all (might still have a few marketing apps)
b) no mobile services that will drive transactions (mobile commerce, online or footfall to stores)
c) mobile revenue considerably below competitors in the segment

So why do so many brands under perform?
The first explanation is that most of the bad performers identified have not yet succeeded online and therefore the leap to succeed in mobile is pretty big. Secondly many of them have old legacy IT systems, content management platforms and e-commerce platforms that lack modern APIs and therefore cannot support a proper mobile platform system design. To get around this some of them like Marks & Spencer, GAP, American Airlines, etc rely on Usablenet to repurpose and render their websites for mobile devices. This works in the short term but it delivers a mobilised web site and not a mobile optimised user experience.

What should the bad performers do to get back on top?
There is simply no excuse for under performing in mobile today. Within 3 years mobile will be more important than traditional web for most brands. In average most brands get about 15-20% of their traffic today from mobile devices and this is rapidly growing. Everyone of these customers is an opportunity whether you want to drive footfall, sell products online or build loyalty. A recent mCommerce study by GP Bullhound concluded that 5 out the top 6 barriers for mCommerce are related to usability. Start by removing these barriers.

For most brands the best solution is to start over with Mobile First (link to article) as the underlying strategy. Develop a customer focused mobile platform that you can continue to build on and expand to other channels including tablets, smart TVs, voice control and future technologies to come. You won’t get it right from day one so plan to experiment until you get it somewhat right and then continue to improve. Decide now what you want to achieve and start experimenting. If you want help, contact us or one of our competitors.

Disclaimer: Several of the companies mentioned in this blog are customers of DMI and the article represents an unbiased analysis and not the views of our customers.

Sources for this article:

Winners:
Amazon mobile revenue: http://www.fierceretail.com/operations/amazon-tops-wal-mart-mobile-revenue-15x-greater
eBay mobile revenue: http://techcrunch.com/2012/04/18/ebay-beats-q1-revenue-up-29-percent-to-3-3b-net-income-up-20-percent/
and http://econsultancy.com/es/blog/8410-ebay-expects-to-see-5bn-of-sales-via-mobile-for-2011
Kayak mobile performance: http://seekingalpha.com/article/823751-kayak-s-mobile-monetization-continues-to-ramp
Intercontintental mobile revenue:
Marriot Hotels mobile revenue: http://www.internetretailer.com/2011/11/28/mobile-commerce-proves-essential-hotelier-marriott
Groupon: http://allthingsd.com/20120813/groupon-misses-revenue-expectations-but-profits-beat/
LivingSocial: http://www.mediapost.com/publications/article/181460/mobile-traffic-tops-desktop-for-groupon-livingsoc.html
Nike: http://www.slideshare.net/EnterpriseCoCreation/nike-8829199 and http://www.mobilemarketer.com/cms/news/content/13173.html
Coca Cola: http://www.shellypalmer.com/2012/03/coca-colas-secret-weapon-for-world-domination-mobile-marketing/
Starbucks: http://www.theverge.com/2011/12/6/2614978/starbucks-mobile-app-110-million-revenue

Losers:
H&M, Forever21, Ralph Lauren, Habitat, Media Markt, Bauhaus, Ikea, Dixons and Home Depot have no mobile websites
Sears, Home Depot, http://www.fierceretail.com/operations/amazon-tops-wal-mart-mobile-revenue-15x-greater
Unilever, P&G, Nestle, Masterfood have no mobile websites for most of their key brands, e.g. Dove, Axe/Lynx, Lipton, Mars, Skittles, Duracell
The Unilever, P&G, Nestle and Masterfood brands that do have mobile websites do not have anything related to purchasing, driving traffic to stores, etc. (e.g. Duracell, Gillette, Nespresso, etc)

Other:
GP Bullhound: Mobile Commerce, From Revolution to Evolution, September 2012 (not published online yet)

Tags: ecommerce mobile apps mobile websites omni-channel

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