SAN JOSE, CA, Jun 03 (MARKET WIRE) --
Mobile devices represent a major growth opportunity for the retail industry by
providing a new purchasing channel for consumers, a Cisco (NASDAQ: CSCO) study
reveals. The company's third annual e-commerce study indicates that mobile
devices are quickly joining physical stores, websites and catalogs as an
important retail channel. The rise of social networking and advanced mobile
technologies has redefined the online experience and is enabling retailers to
capture new sources or revenue by implementing mobile strategies. The
e-commerce study was conducted by the Cisco Internet Business Solutions Group
(IBSG), the company's global strategic consulting arm that works with Global
Fortune500 and public sector organizations to help transform the way they do
business.
"Mobile presents a revenue opportunity for retailers and opens up a new
eraof multichannel retail," said Dick Cantwell, vice president of IBSG's Retail
/
CPG Practice. "Multichannel retailing has morphed into a web of shopper
touchpoints across stores, catalogs, mobile devices, and the Internet.
Retailers must start offering shoppers an 'interconnected shop' if they are to
take advantage of the mobile opportunity."
Advanced Capabilities Puts Retailer Sites into Top 10
The Cisco IBSG study assessed 45 retailers from North America and Europe
inthree categories (Global 500, Web 15 and Innovators) and looked at two
aspects of online shopping from the consumer's point of view. The first is
"foundational" capabilities, which are nonnegotiable, "must have"
characteristics. These include an intuitive graphical user interface, search
capabilities and a convenient purchasing process. The second is "emerging"
capabilities, which are the more sophisticated aspects, such as social
networking and multichannel integration, that add even greater value to the
customer's experience.
The top 10 sites not only delivered flawless execution on the foundational
capabilities, making shopping exceptionally easy for customers, but they also
offered advanced capabilities that are redefining the online experience. While
customers always demand foundational excellence, expectations for emerging
capabilities have shifted rapidly from last year, catching some retailers
off-guard. The study found that the top 10 overall e-commerce sites, from first
to tenth, were Amazon.com, Best Buy, Sears, Circuit City, Quelle, Otto, Macy's,
FNAC, Bol.com and Argos Home Retail Group.
The opportunity in e-commerce continues to grow. Forrester Research
estimates
that online sales will reach $204 billion this year and $335 billion by 2012.
E-commerce accounts for 6 percent of all retail sales in the United States.
Mobile Advantage
By executing the basics of e-commerce well, retailers can gain the trust,
and
the repeat business, of customers who want a fast, reliable and hassle-free
experience. New technologies and capabilities such as mobile access can help
retailers provide a unique, satisfying e-commerce experience. Customers will
soon
expect to use their mobile devices to find stores, research products, make
purchases and manage their accounts. In anticipation of this market
opportunity, retailers should evaluate mobile and multichannel strategies that
allow customers to access retail product information anytime, from any device.
In addition, with the rise of social networking, web-based multimedia, and
mobile commerce, retailers can now select from a broad range of technologies
to reach customers. Monitoring what innovative companies are doing in retail and
in
related industries like financial services will help retailers adapt best
practices
to their own circumstances and strategies.
The Rise of Mobile Commerce
Currently, there are three times as many mobile-phone subscribers (3.3
billion) as Internet users (1.3 billion) worldwide. Cisco expects mobile
commerce to follow an adoption pattern similar to that of cell phones. Early
retail adopters are already finding ways to factor the mobile phone into
multichannel service delivery. For the more basic mobile offering, retailers are
using SMS (Short Message Service) to communicate promotions, provide a two-way
service for customers' questions, and offer item availability and delivery
updates. The Cisco IBSG survey found that:
-- 42 percent of retailers provide the ability to view product
information on a mobile device through reformatted web pages or specific
mobile pages
-- 15 percent offer the ability to conduct transactions (make purchases,
complete inventory queries, etc.)
-- 10 percent are using SMS to provide information or answers to
customers' questions
-- 6 percent have webpages and a URL specifically designed for mobile use
The Social Networking Influence
The explosive growth of social networking sites like MySpace and Facebook,
virtual
worlds like Second Life, and multimedia sites like YouTube have transformed
customer behavior and expectations for online experiences. While social
networking
started with the young and tech-savvy, it is increasingly reaching the
mainstream as consumers 35 and over are joining social networking sites in
droves. For example, Facebook reported 286 percent growth in members aged 35
and over from May 2006 to November 2007. Social networking has grown on a
global level, with the number of European log-ons (127 million) surpassing that
of
the United States (124 million). The Cisco IBSG survey of e-commerce sites
found:
-- 17 percent provide the capability to connect to communities of
interest
-- 52 percent provide customer reviews for products
-- 50 percent have advanced visualization tools
-- 50 percent provide multimedia such as video
-- 50 percent offer customer support through multiple channels, such as
click-to-chat
The majority of e-commerce innovation over the past year has focused
onengaging and interacting with shoppers. Peer-based reviews and interaction are
becoming a baseline expectation, and retailers will need to continue to
develop advanced visualization and video capabilities (in addition to mobile
commerce technologies) to resonate better with shoppers. Retailers need to
consider
these capabilities now so that they are incorporated into future platforms.
Sidebar - Key Insights for Retailers
-- Create and become a trusted destination site for your core shoppers
-- Do not miss the opportunity to use social networking to attract and
retain the Gen X and boomer age groups
-- Develop your mobile strategy now; "Multichannel" retailing is
continually being redefined
-- Ensure that user security is integrated into your approach when
creating your mobile strategy
-- Identify and choose the critical new capabilities that your shoppers
will really value, and execute them superbly
-- Recognize that innovation is an ongoing process and not an annual
event
About Cisco
Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms
how
people connect, communicate and collaborate. Information about Cisco can be
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