Retailers at Shop.org consider m-commerce strategies

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M-commerce and mobile marketing were among the hottest topics at this year's Shop.org summit, as more consumers use their phones to research products and complete sales.

Coda Research Consultancy expects m-commerce sales to reach $2.4 billion this year but to skyrocket to nearly $24 billion in 2015. A recent Forrester Research report found that 2% of mobile phone users have completed a purchase through their device.

“I do think 2010 has been a watershed year for mobile,” said Brendon Kraham, mobile sales manager with Google AdMob, during a Shop.org session on mobile advertising. “You've got to get aggressive now.”

Nonetheless, many retailers have approached this channel with caution as they learned a new trade and waited for the technology to advance and consumers to begin spending money. Two retailers – Crate & Barrel and Petco - shared with the Shop.org audience the results of September mobile advertising campaigns they ran with AdMob. They also talked about their approaches to mobile, offering a study in the diverse strategies that retailers are taking to m-commerce.

Crate & Barrel launched its m-commerce site last December. The vendor Usablenet helped it to upload the entire catalogs of Crate & Barrel and CB2 and enabled the mobile site for product browsing, search, reviews and purchasing. John Seebeck, VP of e-business and direct marketing director at the home products lifestyle retailer, said the company expects to turn its attention to apps next and is exploring an iPad app in particular.

“We wanted to go first with our mobile-enhanced website,” he said. “We have ideas on apps and we're thinking mostly about the iPad. Ideas range from putting the catalog up to creating apps to service the wedding or gift registry experience.”

A campaign with AdMob in September that included graphic interstitials and full-page animated mobile ads resulted in a 3.48% click-through rate across all ad units, but among iPad users the rate increased to 15%.

The company is also exploring how it can use location-based tools.

Petco, on the other hand, is focused on building its first mobile-enhanced website, which it hopes to get off the ground with Digby by the close of the third quarter, said John Lazarchic, VP of e-commerce at the pet supplies retailer. A mobile ad it ran in August and September offering $10 off a $50 purchase resulted in a 0.6% opt in, and 4.6% of those consumers redeemed the coupon. It spent about $5,500, earning an effective CPM of $1.21.

“For our business, apps don't apply well… for the shopping experience,” he said. “I think the mobile site will be the biggest app for us. Our customer is buying every six to eight weeks, and they're buying the same dog food and same treat. Once we're making revenue from the mobile-enhanced site, we'll begin looking elsewhere.”

Lazarchic said Petco had planned to launch its mobile site in January 2011 but consumer demand prompted the company to move its timetable ahead. Between January 2010 and August, website traffic from mobile users jumped from 3% to 8%.

Crate & Barrel's Seebeck said that about 5% of its total website traffic comes from mobile devices. “People are purchasing beds and glassware from the registry on their phones,” he added. “It mirrors what people are doing on our e-commerce site.”

Both retailers said the majority of consumers who find their sites via a mobile device arrive through organic search, though e-mail marketing prompts a small portion of the traffic.

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