Calling all shoppers! Buzz getting louder around mobile commerce
Seattle Times technology reporter
Mobile shopping, by the numbersMarket revenues
Worldwide: Estimated $7 billion by 2008 and $20 billion by 2010.
North America: Estimated $505 million in 2008 and $1.9 billion by 2010.
Worldwide: About 18 million people will buy goods on their mobile phones by 2008 and 132 million by 2010.
North America: About 9 million people will buy goods in 2008 and 16 million by 2010.
Worldwide: The average will be $14 in 2008, rising to $17 by 2010.
North America: The average will be about $10 in 2008, rising to $14 by 2010.
Source: Juniper Research, January 2006.
It's not surprising that in technologically advanced Japan, you can buy a Coke through a cellphone, but what amazed Dan Wright the most was the perfume.
"Selling perfume over the mobile phone doesn't seem that intuitive," he said.
Wright learned about the phenomenon in 2003 through conversations with Index, a large Japanese conglomerate that was vying to buy Mobliss, the mobile game and text-messaging company where he worked.
With the information in hand, Wright began to research the idea of selling physical goods over mobile phones in the U.S., and perfume started to sound more reasonable.
"It made more and more sense," he said. "They were selling to a young demographic, and they buy based on brands — they don't need to do research on a particular product."
In March 2004, a few months after Index bought Mobliss, Wright founded mPoria to focus on mobile commerce. The Seattle company now helps retailers sell goods over the cellphone.
Wright said evidence makes the business compelling, based on billions the Japanese were spending in 2003 on goods over the phone.
"I saw that there was a big opportunity here," he said.
In fact, a number of features on mobile phones in the U.S. could make selling goods the next big step in the evolution of phones turning into computerlike devices.
Today, subscribers already spend billions of dollars on ringtones, graphics, mobile games and other digital content.
On a more limited basis, they can also buy bus tickets or pay for parking or other low-cost items. And a slew of new companies have developed services that help consumers make smarter buying decisions.
One logical area ripe for innovation could be in more traditional retail, said Steve Shivers, general manager of Seattle-based OpenMarket, which helps companies sell mobile content and services to subscribers.
"Mobile is definitely going to be one of the most prevalent devices in people's lives even as a way to buy physical goods," said Shivers, whose company is a unit of Chesterfield, Mo.-based Amdocs.
"The only question is where do all the players fit in the value chain and which players will be in the value chain," he said. "It might not be done with the technology and the players in there today."
Mobile commerce also has some limitations. Though mobile devices have grown more sophisticated, their screens and keypads are still small.
On the retailer's end, it means building a separate Web site designed for the phone to make it an easy buying experience.
It's also true that previous mobile-shopping attempts have failed.
"It was a whole combination of things," Shivers said. "There weren't enough merchants, there was poor user-friendliness, and there were latency issues that came with poor devices."
But Todd Strickler, a manager of strategic development at Verizon Wireless, said he's seen mobile shopping come full circle.
"The interest has started peaking again," he said. "You have users and you have technology that works. The promise is coming back again," he said.
Big online properties such as Amazon.com, eBay and Overstock have started to dabble in the business.
Amazon has a mobile-specific site where a user name and password are entered to get started. Because customers can store their shipping address and credit-card information ahead of time on a computer, they can buy an item without having to enter a lot of text.
MPoria does some of the same engineering work for smaller retailers that lack mobile expertise. It launched a platform this year called GoMobile, which allows retailers to provide some information to automatically create a mobile site.
MPoria charges retailers up to $150 a month for the service; already dozens have signed up, Wright said.
The company also partnered with PayPal recently so its retailers can offer customers that option rather than enter a credit-card number.
Bigger retailers using mPoria's services include Buy.com, TicketsNow, Cutter & Buck and EBGames.
TicketsNow, which sells sports, theater and other tickets online in a secondary market, said mobile so far is not providing a lot of additional sales, but that it wanted to experiment with the channel.
"We needed to put ourselves in a position to move quickly going forward," said Joe Domek, the company's director of e-commerce. "If there is a sudden surge in m-commerce, which has shown some continual growth, we are in a great position to capitalize on it."
Among U.S. wireless carriers, Verizon Wireless provides several shopping options. Its phones have a designated shopping channel from which you can find many of the sites mPoria helped build.
There's also a link to mPoria that lists sites it supports. Buying something takes several steps and countless clicks.
For instance, to buy a bouquet of flowers, you choose the gifts and flowers category, which eventually takes you to a page of small thumbnails of flower arrangements.
Clicking on one called "American Splendor" prompts the option of seeing a description — red roses, accented by white and blue flowers (perfect for Fourth of July) — or enlarged photo.
After clicking to order the flowers, mPoria asks for your phone number, so it can automatically fill in the city and state for the shipping address. (In this case, you may have to change this if the flowers are going to someone else.)
After filling out the street address, other pages allow you to pick shipping options ($9.99 for standard shipping), fill out a gift card and provide your credit-card number.
It involves a lot of clicks, but it's comparable to other experiences on the phone when surfing the Web. Wright said the service is handy in a pinch — when you forget a birthday or anniversary — or when a PC is not available.
It could be ideal if there's a new video game coming out and there's a fear it will sell out. You could buy it on a phone even if you're not in front of a computer.
To be sure, the number of people shopping on their phone is still microscopic, especially when compared with sales in stores and online.
Alan Goode, a senior analyst at Juniper Research in the United Kingdom, expects mobile sales of physical goods will increase, although marginally.
He estimates that in North America, mobile purchasers will spend $505 million in 2008, and jump to $1.9 billion by 2010. Worldwide, there's a more lucrative market. He forecasted revenues of $7 billion in 2008, and $20 billion by 2010.
Many retailers remain cautious.
Jamie Nordstrom, who is in charge of Nordstrom's catalog and Web site, said shopping on the mobile phone is something the company has looked at, but for now, when it comes to technology, they are still adding features to the Web site.
"We think it's something that is coming," he said. "There's a lot of buzz around it, but I don't know if it will take six months to get traction or six years. I think it's safe to say customers will be letting us know when it becomes a way that they want to shop with us."
Wright said it's a cycle. There aren't many shoppers today because there aren't many retailers in the channel — and vice versa. But he said mPoria is laying some of the early groundwork for the market to mature.
The company, which has 18 employees, is funded by Sammy NetWorks, a Japanese conglomerate whose holdings include the Hello Kitty brand. Wright said both he and Sammy are betting the U.S. will emulate Japan when it comes to mobile shopping.
"It's still really early," he said, "but the market opportunity is massive. With about 237 million wireless subscribers in the U.S. and the mobile Web continuing to grow in terms of adoption, there's a lot of things that are happening that will lead to consumer adoption."
Tricia Duryee: 206-464-3283 or firstname.lastname@example.org
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