Cisco Suggests Retailers Need to Focus on Mobile Commerce

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 Fortune 500 and public sector organizations to help transform the way they do business.

"Mobile presents a revenue opportunity for retailers and opens up a new era of 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."

The Cisco IBSG study assessed 45 retailers from North America and Europe in three 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.

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.