Hot Topic: M is for mobile

Mobile commerce - m-commerce - is booming in the consumer sector as shopping on smartphones becomes ever easier. But can the same be said for the B2B industry, and is it worth investing in mobile capabilities? Michelle Sturman finds out...

Shopping on mobile devices went through the roof last year. In fact, 2017 could well turn out to be the pivotal year for m-commerce. Amazon recently released some extraordinary figures about the December 2017 holiday season shopping period. According to the e-commerce giant, customers’ worldwide shopping using the Amazon app increased almost 70%, with more than 1,400 electronics products ordered per second on a mobile device. 

The C-side

On the consumer side, boundaries are being pushed in order to entice people to buy more online, and mobile is frequently at the forefront of revolutionary technologies and new types of business models – think Uber, Instacart and TaskRabbit. 

In November 2017, Amazon launched AR View which lets shoppers view products in their home before buying. Launched in the Amazon app, the augmented reality technology works by users taking a snap of their kitchen, for example, and then searching for products with AR View and ‘placing’ them within the picture. Each available product is configured and rendered for size, colour, etc. Amazon didn’t release figures for AR View, but did report its highest usage on Cyber Monday with furniture, toys, Amazon devices, kitchen items and consumer electronics reported as the top categories. 

Still, even Amazon’s mobile shopping statistics pale in comparison to Chinese online titan Alibaba. The company’s version of Black Friday/Cyber Monday is known as the Global Shopping Festival, held in November. In 2017, $25.3 billion of gross merchandise volume (GMV) was conducted through Alibaba’s eWallet, Alipay, in the 24-hour sale. Mobile GMV through Alipay accounted for 90% of total GMV. 

As mobile is so important to Alibaba, it has concentrated on providing services for both merchants and buyers. Sellers on Tmall, Alibaba’s dedicated B2C platform, benefit from the Tmall Smart Choice system that helps merchants identify products which have the potential to become best-sellers. According to Alibaba, the analysis and forecast provided by Smart Choice can help manage inventory better and encourage traffic for popular items. 

Both Tmall and Taobao (a C2C platform) offer buyers a mobile virtual fitting room app. Customers simply take a picture of themselves on the phone, add their body measurements and the app ‘virtually dresses’ them with their chosen clothes. Participating fashion brands include Guess, Levi’s, Gap and adidas, among many others.

eMarketer’s Mobile Commerce Roundup survey estimated that retail m-commerce in the US would account for around one third of e-commerce sales in 2017, surpassing 50% by 2021. The volume of m-commerce sales is expected to more than double, from $156.28 billion in 2017 to $336.98 billion in 2020.

Putting these numbers into a global perspective, the US is only ranked seventh in terms of countries with the largest volume of mobile use for shopping, according to the Criteo State of the Mobile Commerce 2016 report. Japan leads the pack, followed closely by the UK – both of which now sell more on mobile than through a desktop – then South Korea, Australia, Germany and the Netherlands. 

The B-side 

While the B2B market is usually much slower to embrace new technologies and trends, m-commerce including mobile retail, mobile payments, mobile apps and on-demand services, are so ubiquitous in everyday life that the overspill is inevitable, and for many sectors it has already happened. 

Often, if you want to see where the trends and market are heading, follow the advertising spend. According to eMarketer’s recent US B2B Digital Advertising study, B2B advertisers will increase their spending on digital advertising by 13% in 2018 to $4.60 billion. Mobile ad spend, which was calculated to reach $1.53 billion in 2017, has been steadily increasing, but this year is expected to leap 25% to $1.91 billion – the biggest growth in overall B2B digital spending.

While these are all impressive numbers and clearly indicate the growing trend in m-commerce, B2B still lags behind. And a traditional industry such as business supplies is particularly slow on the uptake, especially independent resellers, many of which still only operate basic websites. 

Having said that, as B2B companies embark on omnichannel journeys, m-commerce is becoming an increasingly important part of the mix. And while the majority of purchases in the business supplies industry are still made using a desktop, the movement of millennial workers into purchasing positions, combined with the growing trend of working outside the office, will likely accelerate the adoption of m-commerce.

There are mixed opinions from the OP world on how mobile is shaping B2B e-commerce, but the overriding view is that, given time, m-commerce will become a major force for buying and selling. 

Ireland-based reseller Codex says that while m-commerce has minimal impact for the company currently, it is growing at a fast rate, albeit from a low base. Director of Operations Patrick Murphy told OPI that mobile traffic has grown in the past year from 2% to 5% on its ordering platform, and 7% on its corporate brochure site. Still, although traffic is up, it has had little bearing on sales conversions. 

UK wholesaler VOW expects sales on mobile to increase as the handover to the next generation comes to fruition. “Most orders are still placed by a generation that is a slow adopter of technology. As time progresses, the uptake will increase. In 2017, around 3% of VOW’s sales came via mobile devices,” says EVO Group of Companies E-commerce Director Darren Mack. 

In the US, Ohio-based reseller FriendsOffice agrees that m-commerce in the B2B sector is still a few years away, as supplies are ordered when people are in the office at their desk. However, President of Sales and Marketing Betsy Hughes believes that one area where m-commerce can excel in the B2B sector is approvals and order tracking. “Approvers and executives that travel can utilise our mobile technology to do things that they would previously have needed a computer for.”

Mobile first

Many OP resellers have been slow to provide m-commerce facilities for customers, with a large proportion failing to even yet offer a mobile-optimised website. And it’s not necessarily a question of cost. “Adding a mobile site is not cost-prohibitive,” says BMI USA VP of Sales Craig Greitzer. “Dealers need to be ready for customers that want to transact business this way. Losing even one or two mid-range customers over their inability to support mobile users will begin to negatively impact the bottom line,” he adds. 

Providing mobile capabilities can also help win business, as FriendsOffice has discovered. “We recently won a bid with a predominantly online-focused company and our mobile app capabilities were something we believe played a role in obtaining that business,” comments Hughes. 

Indeed, in the pursuit of online business, a mobile-optimised website is more than just a ‘nice to have’. Competing against giants like Amazon is serious and as Richard Sinclair, Product Director at UK-based dealer platform Office Power, points out, mobile-friendly websites are becoming more important, not only for a seamless customer experience, but also to enable office supplies dealers’ websites to rank higher on search engines. 

According to Google, adds Sinclair, on average 56% of all searches are now performed on mobile devices and this number is growing year on year.

Without being alarmist, there’s also the small issue of Google’s mobile-first search rankings, building on a process that began in 2015. In December 2017, the first websites were transitioned to mobile-first, which will undoubtedly be ramped up this year. “Essentially, this means that Google is giving priority to sites that are mobile friendly. Their primary index will be their mobile index and will even be used the majority of the time for desktop search results. Think about that… if you don’t have a mobile site, you will soon fall off the search engine results page in most cases,” warns Logicblock President Alexander Nicolaides. 

App or not?

Clearly, a mobile-optimised website is a must in today’s competitive landscape, but what about mobile apps? Conversion rates for apps used for consumer shopping are increasing substantially, but the jury is still out for B2B applications. “In a retail context, an app may be an option only for larger entities, as the effort to develop and maintain it must be combined with a push for users to download and use it,” says Bernard Dahl, Creative Director for North American e-commerce agency Absolunet.

Sinclair agrees, adding that B2B office supplies dealers probably won’t want to invest a huge amount of time and money in building and maintaining a separate mobile app if the web platform is designed to feature as many mobile benefits as possible. 

But could this be a case of chicken and egg? Technology solutions providers are unlikely to develop mobile apps for the OP industry if dealers and customers aren’t willing to make the leap. But, if mobile apps aren’t made available or continuously enhanced, then adoption rates will remain low. 

Is the solution to educate customers first? FriendsOffice seems to think so, stating that its number one priority for mobile is informing its customers of its capabilities. Hughes admits that the FriendsOffice mobile app is currently at a standstill as its technology provider has halted any updates due to minimal interest from dealers and few app downloads. She adds that this will likely remain that way “until we can show developers it’s worth their time to continue to add features to the app”.

Don’t get left behind

Responses from the Q4 OPI Confidence Survey regarding m-commerce and the business supplies industry highlighted widespread apathy towards doing business through mobile. It also threw up some interesting replies, including the scary “what’s m-commerce?” which appeared numerous times, particularly from dealers. 

Contrary to what’s happening in the consumer world, it’s not likely that B2B customers buying office products will require all the bells and whistles that are currently being launched by Amazon or Alibaba. But, a mobile-optimised website would be a good start. “Dealers should make it as easy as possible for their customers to transact business. Whether that requires desktop or mobile access, the dealer needs to be ready,” says Greitzer.  

As Nicolaides points out, not only are dealers competing with the big boxes, but also with the major internet retailers including, of course, Amazon. “The fact is, without a fully-responsive mobile web presence, dealers will simply be left behind the times and lose business to the more adaptive online retail outlets. Not to mention fall off the search results pages. It’s really not a debate or choice anymore,” he concludes. 

M-commerce trends to watch out for…

Augmented reality (AR)

Remember Pokemon Go? That’s augmented reality. Basically, AR is computer-generated images superimposed over a real-world view.

Mobile image recognition 

The essential element of this is recognising images captured on a mobile phone. There are countless applications being developed. For example, a person could take a picture of someone else wearing a pair of jeans they like, and be automatically directed to the retailer online. Also, objects included within pictures of immediate surroundings can be identified through voice to help the visually impaired. 

NFC payments

While not new, Apple Pay, Android Pay and Samsung Pay are paving the way for a huge increase in the use of smartphone payments.

Chatbots

These are familiar in scenarios such as customer service in banking and Apple’s Siri, but they are fast becoming more ubiquitous. 

Single-click payments

Made famous by Amazon, the one-click payment takes a lot of the pain out of m-commerce and significantly reduces shopping cart abandonment. Now Amazon’s patent has expired, expect this to boom.

Read more from the interviews in the Hot Topic Xtra