Yahoo! Shopping’s Mobile Momentum

There are about 200 million cell phones in use in the U.S. today, and the majority of those are capable of using the Internet. The major search engines, and some minor ones, have all shown they recognize that as a gateway to Web information, search will find a way onto the mobile phone someday. The big questions are, what search services will users want to use and pay for, and how far out ahead of this just-emerging market do the engines need to be?

A July OneUpWeb research effort hinted at the search formats that most people will value. The study revealed that potential mobile searchers break into two camps distinguished by task: the “need-it-now” group, with an immediate need for information, and the “killing-time” searchers who are just conducting Web research during downtime—say, stuck in an airport lounge. The two groups indicated they will have different search techniques, too. The “need-it-nows” will use short search queries and favor low-graphics, factual text that can be read fast.

Google, Yahoo!, MSN and AOL have calibrated their mobile search testing to target this immediately needy demographic with functions, primarily by adapting their local directory search and mapping tools for cell phone users. That makes sense. When you’re out and about, your most likely questions are going to revolve around where something is located, how near to it you are now, and the best route to get there. And the results format favored by the “need-it-nows”—short search terms and text-heavy, low-graphics results pages– is easier to provide right now, given the screen size of today’s average cellphone and the hand-eye coordination needed to type queries using a dialpad rather than a keyboard.

But in September, Yahoo! began beta testing another mobile search service that may do more to bridge the gap between search on the go and search from a desktop. Yahoo! Shopping Search on Mobile allows users to enter a generic product name or a specific make and model and call up a list of merchants from the Yahoo! Shopping online site that offer that item, together with their most recent pricing information.

The service will work on the major U.S. wireless carriers—Cingular/ AT&T, Verizon, Sprint Nextel and T-Mobile—and on any phone that’s equipped with a browser running on a wireless application protocol known as WAP 2.0, which covers most cellphones shipping today. Users can go to the site, type in a product or model, and get specific pricing information served up on their mobile screen. A generic search for “plasma TV” will produce a list of models, through which they can drill down to a particular make and then find the merchants selling that specific item.

Google and other rival search engines offer versions of mobile shopping search, but Yahoo!’s is the first to permit comparison shopping in real time rather than via text messages sent to the phone. Rob Solomon, vice president of the Yahoo! Shopping division, says the comparison service makes sense because it’s location-dependent, aimed largely at shoppers who are already in the store considering a purchase.

“Getting mobile comparison shopping out there makes a lot of sense,” he says. “These people may want more information but don’t want to search through the full [Yahoo! Shopping] database of 60 million products and thousands of retailers. Now, when you’re at Best Buy, Circuit City or Target and thinking about buying an item, you can check the 60 or 100 merchants selling the same thing to find out if you’re getting a good price.”

Producing relevant results may be even more important in mobile search than in the standard PC version. Small display screens mean more scrolling—something those “need-to-know” mobile users are not going to want to do a lot of. So that search for “plasma TV”, for example, will produce product results ranked in order of their popularity in that category on Yahoo! Shopping. Users who know the make, model and even the SKU they’re researching can enter those and go straight to the seller list. Right now, the lists of merchants selling a specific item are also ranked in terms of their Yahoo! Shopping click traffic.

That list of sellers could provide one answer to another big question surrounding mobile search functions: Who’ll pay? A JupiterResearch study published in September found most consumers are saying it won’t be them. Twenty percent of respondents said they were willing to pay for 411 directory services such as phone numbers and addresses (as in fact they already do under most wireless plans) and 18% would pay a fee to have maps or directions sent to their mobile phones. But only 7% said mobile local search services for restaurants or merchants would be worth a fee. The conclusion, according to Jupiter senior researcher Julie Ask, is that mobile search services will probably need to look to advertising rather than subscriber fees for their revenue.

And should it catch on with the cellphone public, Yahoo! Shopping Search on Mobile may offer a few opportunities for that kind of monetization. One option might be a “click to call feature” that would let comparison shoppers find price information on their desired item and then dial out directly to the merchant. “That certainly makes a lot of sense for direct merchants who sell both online and over the telephone,” Solomon says.

Another possibility might be some mobile version of the “featured partner” listings now on Yahoo! Shopping, letting sellers pay to get a premium listing within a product category. “We’ll definitely evaluate that,” Solomon says. “Bidding for seller placement is a logical model and a very acceptable one. It maps to what’s being done already in the search engine world, with Yahoo!, Google and soon MSN all offering sponsored results. That could easily carry over to the mobile world.”

But those business-model considerations are in the future. Right now, Solomon says, it’s important to get a slew of mobile services out into the market and see what users will value. “We’re trying to figure out what applications make sense,” he says. “We’re white-boarding weekly to figure out what the next set of mobile shopping apps should be. We want to get the service out there and build usage, see how people use it, and do some focus testing.” One likely added feature is product review content from users, something Yahoo! Shopping now offers on its Web site.

Yahoo! Shopping has also opened up its application programming interfaces (APIs) to third-party developers—a method for generating new applications that has proven effective with many other advanced search services, such as Google Earth mapping.

Today’s phones may be too unwieldy for easy mobile search and the average user too tech-shy to know what a WAP browser is—let alone whether he has one– but Solomon is convinced that mobile shopping will eventually change the way products are marketed. And if search continues to grow as a gateway to e-commerce, being able to find useful product information via cellphone will become a crucial part of the buying process. That vision has the search engines testing their mobile muscles now, in order to be ready when the right handsets and the right users come together.

“Shopping Search on Mobile is the tip of the iceberg, a baby step,” he says. “As we get better at providing search, ratings, reviews, community applications and pricing comparisons over mobile phones, it will make sense for people who start with our search to figure out how to make better purchases with the information we’re giving them. That will change the way people shop.”

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