M-Commerce is Here, Get Used To It

Launching a mobile app by the end of the week is most certainly not a matter of life or death. But, said speakers at the recent Internet Retailer Conference and Expo, it is something worth trying.

Moosejaw Mountaineering, an outdoor merchant that skews to a younger audience than, say, American Eagle and L.L. Bean, has seen a positive response to the channel, said Gary Wohlfeill, executive vice president of marketing.

Though it does allow customers to purchase—and use PayPal—on their smartphones, Moosejaw has also been able to foster loyalty through its text message program. It once sent a text to its customers telling them to reply back with a text that says “Wang City” and they would get 112 additional Moosejaw points. The response rate was 51%.

While Moosejaw’s young audience suggests a reason for its early adoption of the channel, 1-800-Flowers.com’s ultimate goal with mobile commerce was to generate a younger group of buyers, says its senior director of Web merchandising Vibhav Prasad. The average age of the 1-800-Flowers.com buyer is 43.

The floral gifts merchant, which launched 1800flowers.mobi about a year ago, had a hard time getting its mobile shop up and running with text-to-win campaigns and banner ads. But when it engaged in social networking—and allowed Facebook and MySpace users to send virtual flowers to their friends’ phones —1-800-Flowers.com was able to ” speak” to a younger crowd.

Commerce over mobile devices such as cell phones is accelerating in the United States, according to data released at the show by Nielsen Mobile.

According to the report, more than 9 million U.S. mobile subscribers say they have used their mobile phone to pay for goods or services, and half of all data users (49%) say they expect to participate in mobile commerce in the future.

Among the findings presented:

§ As of the first quarter of 2008, 3.6% (9.2 million) of U.S. mobile subscribers use their phone to pay for goods or services
§ Men are more likely than women to use their phone for commerce: 4.5% (4.9 million) of men and 3.0% (4.3 million) of women say they have made a purchase using their phone
§ Adults ages 25–34 are the most likely to have made a purchase using their phone: 5.4% (3 million) of adults ages 25–34 have made a purchase, compared to 3.6% of all mobile subscribers
§ 49% of mobile data users who have used one or more data features on their phone – such as text messaging or the mobile Internet – within the past 30 days, say that it is likely they will conduct mobile commerce in the future

But Nielsen’s study also reveals that security is the number one concern among those mobile data users not yet participating in m-commerce:

§ 41% of data users who do not participate in mobile commerce say security is their biggest concern
§ 23% say they worry about being charged for the airtime
§ 21% say they don’t trust that the transaction will be completed

“U.S. consumers need proof that mobile transactions will be a safe, affordable and efficient complement to other modes of shopping,” said Nic Covey, director of insights at Nielsen Mobile, at the conference. “As long as retailers continue to meet those expectations, more consumers will come to view mobile shopping as a compelling and viable option.”