When Richard Sears essentially invented the mail order business in 1886, I’m sure he came across plenty of naysayers. And I’m sure that number grew significantly when Sears opened their first retail store in 1925. But to the surprise of many, despite the overwhelming success of their brick and mortar stores, the Sears catalog business model remained successful for many many years. And here’s why: while the catalog wasn’t generating a tremendous amount of transactions, it also wasn’t cannibalizing in-store revenue. In fact, it was doing the opposite.
Sears noticed that their catalogs were having a positive influence on in-store transactions. For many consumers, the catalog eventually morphed from a sales channel into a valuable research tool they could use before making their actual purchase at the more convenient retail store.
So while catalog transactions were lower than in-store transactions, does that mean the catalog wasn’t worth the effort? Well, almost 100 years have gone by and it’s still in circulation. Clearly the benefit is still there.
This brings me to my main point. Much like the Sears Catalog, the success of mobile cannot be judged by transactions alone. There’s much more to mobile than just generating sales. But if you read Forrester’s recent US Mobile Retail Forecast, you may believe otherwise.
While the report is a nice piece of research, I believe the author may have missed a key element of the mobile experience. The author, Sucharita Mulpuru, states clearly that her research focused only on mobile transactions. In other words, if a purchase was made using a mobile device, it was worth including in the report statistics. The problem is, much like the Sears Catalog’s impact on in-store purchases, mobile transactions do not represent their ultimate impact on overall commerce.
Without giving away all the details of the report (which I’m sure Forrester would prefer you buy), I’ll briefly discuss a few high points of the research and findings:
- It’s too difficult to check-out/pay via Smartphone: This is (obviously) dependent on the individual mobile site or app. Amazon, Zappo’s and Walmart make it easy to check out via Smartphone. So while it’s true that many companies are not doing it well, that’s hardly a reason to disparage the possibilities.
- A mobile investment does not generate consumer awareness: For brands that think customer first and mobile second, this isn’t an issue. But when a company is involved in a mobile effort just for the sake of saying they’re mobile, it’s obvious the customer isn’t the primary focus. So why should anyone expect higher consumer awareness as a result of anything undertaken with this approach? Frankly, if you generate any consumer awareness through with a “me too” mobile strategy, you’re generating success above the odds. Vegas would love you.
- Mobile conversion rates lag behind personal computer users: This is no surprise, is it? The PC is a more familiar platform with more screen real estate. It’s a known, more-trusted platform to place a secure eCommerce order. But mobile conversion rates have been growing in recent years. And as consumers become more familiar with mobile, (and as companies begin to properly leverage mobile technology) I expect this conversion rate to approach that of PC users.
Mobile is in a similar position today that the Sears Catalog was in when they opened their first retail stores. If you only judge mobile success by transactions, you could be missing the big picture. Transactions aside, mobile has a much greater impact on a brand’s entire spectrum of commerce. In fact, the author points out that the two investments most often made in mobile are:
- Product and Price Information: Included in 76% of retailer mobile efforts
- Customer Ratings and Reviews: Included in 71% of retailer mobile efforts
Investments drop conspicuously off after that. This could lead one to the logical conclusion that what retailers are experiencing is exactly what they’ve paid for. Not rocket science…
In most cases, investments are not wasted just because they don’t result in a mobile endpoint transaction. For example, if a company experiences an increase in conversions from personal computers after making a mobile site or app available, that increase is very likely influenced by the information the company has made available to shoppers on their mobile device.
To be clear, a company must understand their unique customer base and how those customers and prospective customers would engage with a mobile device in the context of their brand. Each situation can be unique. Understanding the relationship to your audience for a given channel is key, not only to reaching them, but to making a successful investment in mobile technology.
Overall, I believe that Forrester’s research misses the overall influence that mobile has on purchases across all channels. If Sears applied the report’s logic to their catalog in the early twenties, I wonder if Forrester would have recommended they ditch the catalog and just focus on their brick and mortar investment. Thank goodness they didn’t. Because without the Sears Wishbook Catalog, Christmas as we know it would have been a much different, less exciting experience for generations of Americans.