How to Know if Mobile Commerce is Right for You

Sep 03, 2011 12:40 AM  By

Read any etailing trade publication or talk with any marketing consultant and you will quickly believe that you need a mobile website, yesterday. But not every retailer will benefit from a mobile site. Here is an example of how a mobile-optimized website was awesome at one company and simply not needed at another.

After managing the company for about eight years, I launched a mobile website for Company A in 2010. By then, we had been etailing for 10 years. We had an award-winning website, above average conversion rate, a good PPC program, a good SEO strategy, and basically were a well-oiled machine. Launching a mobile website seemed like the logical next sales tactic.

Company B is a cataloger with limited ecommerce experience. We had lots of things we needed to do—redesign the website, improve our conversion rate, launch an AdWords campaign, write product descriptions and other content necessary for SEO, and plenty more. With so much to do, how do you know where to prioritize a mobile website?

The answer is simple if you can ignore the hype and look only at these numbers:

Ecommerce sales = (# Of Visitors x Conversion Rate) x Average Order Value.

Etailing is really quite simple when you look at it like this. You can increase sales in three ways:

1) Increase the number of visitors to your website (via AdWords, SEO, comparison shopping engines, email marketing).

2) Increase your conversion rate (via personalized upsells like MyBuys, advanced site search like SLI Systems, better usability, better product mix).

3) Increase your average order (better site design, product assortment).

How does a mobile website fit into this equation? It has the potential to increase the conversion rate and average ticket of shoppers on mobile devices (the logic being that the mobile-optimized website is easier to use than your standard site, so mobile shoppers will therefore be better suited to convert and spend more).

So in order for your mobile website to produce a positive return on investment, it must produce enough of an uptick in sales to offset the platform’s cost. Or:

(# Of Visitors x Conversion Rate) x Average Order Value > Mobile platform cost + internal labor

This was a no brainier at Company A. Nearly 10% of our visitors were on mobile devices, so even the slightest uptick in conversion rate or average order would yield a positive ROI.

But Company B was much smaller. It had fewer total visitors and even less of them were on mobile devices. Even if a mobile site could provide such an outstanding user experience as to double conversion and average order, it wouldn’t cover the cost of the mobile platform.

Nonetheless, most etailers can likely benefit from a mobile website, especially if you can keep the cost side of the equation small. Luckily, many vendors that you may already use are offering affordable mobile websites, like SLI Systems and MyBuys. We saw these robust platforms provide the enhanced user experience necessary to increase conversion and average order, at a price that makes the math work.

But keep in mind, if you have low site traffic to begin with, the math may not work, and that’s okay. It’s okay if your mobile strategy is, “wait and see, until we get more mobile traffic” and not, “Now. Now. Now.”

Ian MacDonald (Ian.Andrew.MacDonald@Gmail.com) is division vice president, ecommerce & marketing at PartySuppliesDelivered.com, adivision of US-Mattress.com.