Joseph McConellogue is managing director of Reprise Media, a search engine marketing agency within IPG Mediabrands – the media innovation arm of the Interpublic Group.
Mobile marketing has become a $40 billion market in the U.S., according to a recent report from Custora, up from $2 billion in 2010. (I’ll save you the math, that’s a compound annual growth rate of 111%.) However, you’re likely not surprised to hear how underdeveloped mobile commerce is up north.
The numbers we see every day paint an underwhelming picture for Canada. We have witnessed firsthand mobile search queries surge far beyond projections, yet even a brief search shows that very few Canadian companies actually offer e-commerce on their websites, and when they do it’s not a particularly good experience. The website may have been up for a long time but not updated, let alone optimized for mobile.
Mobile searches speak volumes. Not only do the words tell us what customers are searching for, but the time, location and device tell us how they want it. Once you see it this way, mobile commerce is a no-brainer. There are tens of millions of people searching for product information on mobile and they are all saying the same thing: I am ready to buy right now, so long as it’s on my terms, on my device.
So why isn’t Team Canada doing better? A lot comes down to investment in infrastructure. Too often, IT departments are bogged down putting out fires, dealing with CRM systems, and the broader infrastructure that keeps a company running.
These teams are strapped for time and that creates roadblocks. To get past them, retailers must invest to create dedicated web teams focused on e-commerce to make it work especially in mobile.
Without question, it’s a significant outlay to make mobile e-commerce work, but if you’re one of the larger advertisers in the country, it’s something that must happen. For the average big box retailer, setup and maintenance expenses for a solid mobile e-commerce website could run in excess of $500,000 per year, which seems high. But compared to opening and maintaining a new store – which can easily top $10,000,000 – it seems like a no brainer.
The website is a storefront and should be treated as such. Retailers are consulting with their shopper marketing agencies on a daily basis and making tweaks to their stores. If they were to make the same sort of investment and effort online, they would see huge returns.
What’s more, they can do this with mountains of data at their disposal. Mobile commerce is a science for retailers like Amazon. Retailers large and small should be taking the same approach.
But there’s one piece of data all Canadian retailers need to consider. Smartphone traffic has traditionally been perceived as incremental traffic. That’s not the case anymore. Desktop traffic has plateaued and will decrease significantly over the next few years, while mobile usage is on the up.
Today, the conversion rate using a mobile phone is about one third that of desktop computer users. The tide is turning quickly. If mobile traffic is cannibalizing desktop traffic and converting at only a third of the rate, that represents a major business problem.
Two-thirds will continue to shift over to mobile. It’s only a matter of time. Mobile has already changed from a luxury few can afford to a staple no one can operate without.
Few can doubt this means Canada must raise its game and invest in mobile. But I for one won’t be happy until e-commerce is up there with manners and hockey as things we do better than America.