Mobile Commerce Experts Talk Small Business

Tuesday May 3rd 2011 by Lauren Simonds
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Forget about shopping from home. Everyday millions of people buy goods and services with a mobile device. Are you missing out? Our experts tell you if mobile commerce is right for your business.

Mobile commerce is one of the biggest trends to affect small business owners, and it hasn’t even fully arrived yet. Consider this: between 2010 and January 2011, the number of Americans that owned smartphones grew from 45.5 million to 65.8 million. And those Americans are doing more with their smartphones than just talking, texting and watching YouTube videos. According to a ComScore survey, 48 percent of them -- that's more than 31 million people -- are shopping, too.

Those numbers will only grow, with some analysts betting that mobile commerce will quickly outpace traditional ecommerce. This presents a great opportunity for small business, which makes now the perfect time to assess whether mobile commerce makes sense for you and your customers.

We recently invited an all-star cast of mobile commerce analysts, experts, vendors and journalists to kick off our inaugural Twitter chat. Here's what came of the discussion, with great tips and advice to help you decide whether mobile commerce should be part of your business plan, and what you can do to get started.

We'll start with the list of our panelists and their Twitter names -- follow them to stay informed on mobile commerce and other small business issues:

  • Laurie McCabe, principal analyst and co-founder of SMB-Group (@lauriemccabe)
  • Mike Craig, co-founder and vice president of Ruxter (@ruxtermobi)
  • Aaron Maxwell, founder of Mobile Web Up (@mobilewebup)
  • Annette Tonti, CEO of MoFuse (@atonti)
  • Aaron Sandoval and Melissa Vincent, vice presidents at UR Mobile (@urmobile4good)
  • Igor Faletski, CEO of Mobify (@igorskee)
  • Dan Muse, editor in chief, B2B, Quinstreet, Small Business Computing (@dmuse)
  • Lauren Simonds, managing editor, Small Business Computing (@SmBizComputing)
  • Ecommerce expert Vangie Beal (@AuroraGG)
  • Jennifer Schiff, principal, Schiff and Schiff Communication (@jenniferlschiff)

An Expert Take on Mobile Commerce for Small Business

The most basic question of course, is why should a small business consider mobile commerce?

"So many consumers are using smartphones, and they have the Internet in their pockets," said analyst Laurie McCabe. "It's a great way to get a competitive advantage."  The fact that so many people are moving to smartphones and Web-enabled devices is the force driving this trend.

"Everyone," said Annette Tonti, CEO of MoFuse, "is walking in to your store, restaurant, etc., with a full computer in their pocket." 

With so many people accessing the Web through a mobile device, doesn't it make sense to cater to your customers? "Yes," said McCabe. "We see customer convenience as a big factor for mobile commerce."

And small businesses that have already made the leap to mobile commerce are seeing positive results. "The best answer I have [for implementing mobile commerce] is that it's ramping up very fast. One client has literally seen 10 percent growth per month," said Aaron Maxwell, founder of Mobile Web Up.

Igor Faletski, CEO of Mobify, offered yet another reason why having a website that can be viewed easily by a variety of mobile devices is increasingly important. "For a growing number of people, mobile is the primary (and sometimes the only) way they access the Web. 

But mobile commerce is about more than just buying products. People use mobile devices to research products, schedule appointments, recommend products to friends on social network sites and compare product pricing online to what they see inside brick-and-mortar stores. As a result, mobile commerce is about more than just selling products.

Small businesses "need to deliver information that can facilitate a transaction -- e.g., make it easy for your business to be "found" via a mobile Web browser, [conduct] mobile marketing campaigns such as text promotions and loyalty programs," said McCabe.

How Big is Mobile Commerce?

It is one thing to say mobile commerce is a big trend that could supersede ecommerce, but how does that translate into real dollars? Our panelists use a variety of measurements, but all agree that the mobile commerce future is both big and bright.

Laurie McCabe: "The mobility market will reach $1 trillion by 2014." 

Annette Tonti: "Last year both Ebay and Amazon recorded more than $1B each in sales originating from mobile devices."

Aaron Maxwell: "Juniper research predicts that mobile payments will reach $600 billion globally before 2013."

What's the Difference Between a Mobile App and a Mobile Website?

Many small business owners who have yet to jump on board the mobile commerce express are a bit fuzzy on the finer points, like the difference between having a mobile app versus a mobile website. Our panelists aimed to bring the issue into focus. Mike Craig, co-founder and vice president of Ruxter.

"Very briefly, it's the difference between a program (app) downloaded to a phone, and a mobile-friendly website," said Mike Craig, co-founder and vice president of Ruxter. For example, if you have a mobile-friendly website, people can use a mobile device to access your site and they can easily see the content and navigate the site.

If your website is not optimized for mobile devices, the site doesn't translate well at all, and the bad experience can frustrate your customers. Laurie McCabe concurred. "If you haven't created a mobile-friendly version of your site, you risk turning off visitors who come to browse."

Another consideration is the size of the audience you're trying to reach. "Apps generally provide better experiences, but mobile websites have wider reach," said Aaron Maxwell. For example, "an iPhone app reaches about 7 percent of U.S. cell phone users; Android reaches 8 percent; a mobile website reaches about 35-40 percent; sms text reaches about 70 percent."

And for small businesses, cost is a major factor. According to Annette Tonti, a mobile-friendly website is a better option for cash-strapped SMBs. "Another big difference is the expense of implementing an app, and then the long-term upkeep of mobile app. A mobile website is far less expensive to build and manage," she said.

Melissa Vincent, vice president at UR Mobile agreed. "A mobile website gives you a broader audience, without the cost of developing for multiple platforms or handsets."

A mobile-friendly website offers benefits beyond the cost savings. Igor Faletski, CEO of Mobify put it this way, "A mobile website provides the unique benefits of being search, social and email-friendly, which is key for user acquisition."

Mobile Commerce is All About Your Customers

When it comes right down to it, mobile commerce works only if it benefits your customers. That means you need to determine how your customers find and shop at your site or store. Our panel of experts and small business owner Pamela O'Hara (CEO of BatchBlue software) agreed on this point.

Mike Craig: "Small businesses need to think about what's useful for their customer's mobile experience."

Aaron Maxwell: "I'd say ask (1) where your revenues are coming from now, and (2) how that can be augmented via mobile channels."

Pamela O'Hara:  "A mobile app is important if there is a compelling business product or service you can offer. It's not necessary for every business.

Annette Tonti: "I agree. Apps are not necessary for every biz. A mobile-enable website is."

Aaron Maxwell: "So true. For some businesses an app can be immensely valuable; for some, little value at all."

Laurie McCabe: "Something else that's very valuable – you can use mobile marketing to send customers appointment reminders, e.g., dentists, salons, etc."

 Mike Craig: "Exactly, mobile can be an amazing marketing and commerce tool, but don't just fall in love with technology." 

Mobile Commerce First Steps

Like any new technology trend, small businesses are aware of mobile commerce, but that doesn't mean they’re signing on in droves…yet. Adopting new technology always involves a learning curve as SMBs sift through the hype to find whether or not there's real value for them.

"Our December 2010 survey found that most very small businesses see the importance of having a mobile website, but 43 percent have no plans [to get one]," said Laurie McCabe.

Educating SMBs on the value of mobile commerce may be the key, but it's a challenge when SMBs are often overwhelmed. But Annette Tonti remains optimistic. "I think mobile commerce will be what ignites small businesses to [invest in] mobile [technology]."

She also remains realistic and offered suggestions on what SMBs should ask any prospective mobile commerce vendor. "I just saw a panel of small business people at a BIA/Kelsey conference. They don't have time to think all of this thru. They need real help," she said. "Questions SMBs can ask about getting mobile include: How easy is it? What can I do with it, long term? How do I manage it affordably?"

McCabe added that SMBs should also ask vendors how much guidance and support they can expect.

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