Analysis: Retailers in slow lane to mobility
Brad Dorfman and Mark Potter
NEW YORK/LONDON (Reuters) - When pop icon Britney Spears tweeted a sneak-peak picture of a new outfit from her line for the Candie's brand, the fashions swiftly became a top seller at department store Kohl's Corp (KSS.N).
"When she Twitters, it actually sells thousands of products within 24 hours, so the woman has the gift of Twitter," said Neil Cole, chief executive of Candie's owner Iconix Brand Group Inc (ICON.O).
After years of agreeing that mobile commerce was a good idea in theory, executives told the Reuters Consumer and Retail Summit this week that they are finally getting serious about reaching consumers wherever they are, via mobile phones and other devices they seldom put down.
"It's definitely the buzzword in the industry at the moment," Daniel Latev, retailing research manager at Euromonitor International, said of mobile commerce. "A lot of companies that have an Internet presence are finding this is not enough and they have to go a bit further."
Some retailers are latching onto the tool as they look to drive sales growth again coming out of the recession.
Others cite the mass adoption of devices like Apple Inc's (AAPL.O) iPhone, with its colorful touchscreen, as paving the way for shoppers to compare prices, receive coupons and buy goods on the go.
"People will still choose to shop in a whole host of ways," said Mark Price, managing director at British grocer Waitrose. "What you have to do is adapt your business to allow customers to shop how they want to shop, when they want to shop."
But while retailers said mobile retailing will be big, they also approach it cautiously due to memories of missteps in the early days of web commerce.
"I think it's the future, although it's going to happen slow," Cole said. "In our opinion, it's similar to the Internet and e-commerce, where people went crazy 15 years ago and a lot of people lost everything (by) going too quick."
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Just as the Internet meant that consumers were no longer required to go to stores or sit on hold on the telephone to shop, the spread of smartphones means consumers can exercise their urge to shop anywhere they can get wireless service.
Japan is out in front in the mobile marketing arena, with 10 percent to 12 percent of all online retail sales being conducted on mobile devices, Euromonitor's Latev said.
In the United Kingdom, Verdict Research forecast that mobile commerce sales could double in three years.
Analysts also expect mobile marketing to jump in the United States. Experian Plc's (EXPN.L) Experian Marketing Services noted that the number of mobile phones in the United States is now equal to 90 percent of the population.
Retailers are learning that their marketing materials need to be modified to fit the smaller mobile devices.
"It's important that you create your e-mails in way that they are able to view it" on a mobile device, said Regina Gray, vice president of strategic insights.
Retailers are also developing more mobile applications, including one by Tiffany & Co (TIF.N) that lets a shopper pick and size an engagement ring.
That makes mobile retail an additional expense for retailers who are still recovering from the recession, which could slow the pace of developing applications and other materials.
"We are still recovering from our profit slide, so we are much more careful today than we were in 2006 and 2007," said Perry Ellis International Inc (PERY.O) CEO George Feldenkreis. "Mobile is still very small and requires a large investment."
There is also some question about how much consumers want to be bombarded by marketing messages.
Collective Brands Inc PSS.N, the owner of shoe store chain Payless ShoeSource, is developing an app that will show you where the nearest store is based on your location. But customers must be able to turn off an app that would send a marketing message when they near a store.
"You're not going to just all of the sudden start getting 800 dings every time you drive by a little shopping center," CEO Matthew Rubel said.
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