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Mobile e-commerce and CRM strategy dictated by business type, Gartner says

Barney Beal, News Director

Smartphones and social networks are forcing companies to adapt their e-commerce strategy to the changing environment, and while some businesses may have time to adapt, others are already falling behind, according to one industry analyst.

Mobile phones, workplace attitudes and social networks are all transforming the way people interact with one another and how businesses interact with customers.

"We now communicate in a one-to-many model," said Gene Alvarez, research vice president with Stamford, Conn.-based Gartner Research Inc. "Whether broadcasting over Twitter or updating

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Facebook, the attitudes in terms of the workplace have changed. We now blend work into our life as a result of mobile technology, whether via mobile devices, laptops or netbooks."

The rapid uptake of smartphones demands that companies provide mobile access to their websites, and many should be thinking of developing mobile applications, Alvarez suggested, though the method and approach can vary greatly.

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By 2012, according to Gartner, 30% of smartphone users will use the Web to shop, resulting in 3% of the smartphone population conducting an e-commerce transaction. Also, the total number of subscribers to location-based services will exceed 298 million by the end of 2011, and by 2012, more than 75% of new search installations will include a social search element for relevancy calculation.

"With this comes the objectives of what type of industry are you in, and customer experience becomes quite important," Alvarez said. "You need to choose how your company informs customers."

That doesn't just mean mobile accessible websites or mobile applications on the AppStore, he said. It could mean SMS, MMS and even voice touch-points.

Alvarez will present his complete findings at Gartner's upcoming annual CRM Summit in Scottsdale, Ariz.

Alvarez separates company websites into four categories: influencer, informer, facilitator, and seller. Some need to start developing mobile applications faster than others.

"Your website will determine how quickly you race in," he said.

The Influencers

Influencers are websites that are low on transactions where the main goal is to drive sales to another customer touch-point. They typically do not support mobile applications, though some are experimenting with SMS. They include automotive sites like Toyota, P&G's Charmin site, and Maytag. These sorts of websites have some time before they need to start developing mobile applications, Alvarez said. They should monitor informer and facilitator sites for ideas.

The Informers

Informer websites focus on disseminating information to customers as quickly as it is produced. Media organizations fit squarely within the Informer category, Alvarez said. The New York Times, Endgadget.com and Gartner.com itself are Informers. Informers are leading the charge with mobile applications. If you have a news agency and you haven't thought of mobile, you're behind, he said. They are already using push models like Twitter and SMS to stay connected with customers, and some have created smartphone-friendly versions of their websites. These organizations should have already created mobile applications or be piloting them.

The Facilitators

Organizations with a service focus and lots of information -- airlines, banks and other financial institutions -- are Facilitators. Airlines have led the way with SMS and email notifications of departure times and other flight information, and some are piloting mobile phone boarding passes. Banks, however, have had difficulty convincing customers to conduct transactions from mobile devices because of security concerns. Companies in this category need a clear set of customer requirements and customer value before rushing into mobile applications, Alvarez said.

The Sellers

Seller organizations are starting to see mobile applications develop, but it is only smaller startups that are offering things like product-location or price-checking functions. Purchases via mobile applications will be the last thing to develop, according to Alvarez. Retailers are not purely Sellers, either, he warned. They need to consider that customers are checking prices, seeking store locations, and checking product reviews via mobile devices. Seller organizations should plan for customers to visit their websites from mobile browsers and should add a mobile B2C e-commerce pilot to their 2009-2010 plans, he said.

Many organizations will have characteristics of multiple types, but they need to start planning around mobile applications. Context-aware computing, a combination of GPS information from mobile devices combined with personalized content, is the next big step for e-commerce, Alvarez said.

It won't be long before someone will create an application allowing a hungry user simply to pull out a smartphone and order a pizza from a choice of several nearby restaurants. The restaurant may then be able to push out a coupon or special offer to the customer based on previous purchasing history, but this requires that the restaurant be able to take the order in the first place.

"When it comes to getting into the mobile world, one must be aware that down the road this context piece will weave its way in," Alvarez said. "If you're someone like Amazon, you're more of a type A and making the investments early. Type B, you may be waiting for someone to figure out things like mobile ordering first before even trying the mobile offer."

Alvarez warned, however, that mobile applications and snazzy user interfaces are only part of the answer.

"It's now time for organizations to update their CRM strategy to reflect the 'me' aspect of CRM," he said. "The 'me' aspect is that, 'Yes, people love the website, and hey, we have a gorgeous interface that can connect form anywhere,' but customers must be happy. Customers are thinking about where's the stuff I ordered and when am I getting it. If I've ordered this, can you recommend something else, know who I am, where I am, what I'm doing? Have context when you interact with me?"

Location-based services will begin to leverage community concepts and be the next big "Web 2.0" driver by 2010, according to Gartner.

"Mobile e-commerce is on the horizon," Alvarez advised. "Start weaving it into your strategic plan with the caveat to start determining how fast, and also look into capitalizing on GPS services."


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