Jan 29, 2006 (05:01 PM EST)
Consumers Use Smart Phones For Online Shopping, Not Buying
Read the Original Article at InformationWeek
Our cell phones have become cameras and music players. So, now that more than 300 million of them in North America also can browse the Internet, how long before we use them to buy TVs and tennis shoes?
The biggest portals on the Web – America Online, Microsoft's MSN and Yahoo – have launched versions of their shopping comparison sites that mobile phone subscribers can access from their devices in what could be the first step in the next wave of online retailing.
But the companies aren't pushing transactions over the phone. For now, they're content just to provide basic price and product information and leave the actual sale to another medium.
Chris Saito, senior director of product management for Yahoo Shopping, wants consumers in store aisles to turn to their phone for last-minute price checks. "You're in a store shopping for a digital camera or piece of electronics or a pair of jeans and you want to see if you're getting a good deal. You do a search on your phone, it takes a few seconds, and you see if you're getting good deal or should just go home and buy it on a PC."
Waiting to make a purchase at a computer, rather than with a phone, will make sense until enough online retailers make simplified versions of their Web sites that fit on a tiny screen. Some, like EBay and Overstock.com, have started to do that. But then there's the task of having to punch a credit card number into a mobile phone.
"This is a price comparison tool. I'm not clear people will buy stuff on their phone," besides ring tones and games, says Craig Eisler, general manager and senior vice president of AOL Wireless at America Online, a division of Time Warner. "There's a long road to hoe to get consumers to triple-tap their credit card into a handset to buy a flat screen TV."
The company introduced its mobile search services in July, giving customers the ability to search the Web, comparison shop and access local listings from AOL Yellow Pages.
"Local search while mobile we think is one of the most compelling features we have to offer," Eisler says.
The idea that an increasing number of consumers will turn to their cell phones to search the Web for information has not escaped the attention of the Mobile Marketing Association. The group, which represents advertisers, device manufacturers, wireless operators and service providers, says it has begun looking at the possible business models, operating procedures and technology interfaces that will allow operators to offer their subscribers the ability to search online.
While it acknowledges the need to educate consumers about the new service, the association believes that offering search to mobile customers will eventually be as lucrative a cash cow as short message service and sales of ring tones, which reached $600 million last year alone.
The biggest hurdle to shopping over a mobile phone, though, is the size of the screen. "Many Web sites aren't equipped yet to provide a Web experience that's optimized for mobile phone," Saito says. To tackle the technical challenge of adapting Web pages that were designed for the desktop, AOL teamed with Infogin Inc., an Israeli firm. Rather than simply subtracting chunks of each page to make it smaller, "it looks like it was designed for the small screen in the first place," Eisler says.
Since Yahoo launched a beta version of its Mobile Shopping in September, the number of search requests has grown four times, with the highest traffic on weekends, which Saito interprets as an encouraging sign, because that's when people are outside their offices.
The next step is to add features like product reviews, specifications and photos. "You wouldn't see a whole list of reviews on the top page, you'd see an aggregated review, like '4 out of 5 stars,'" Saito says. "We're not going to fill up a whole page with text."
Where Yahoo and AOL are cautious about the future, Kathleen Stockham, vice president of commerce for Durham, N.C.-based Motricity Inc., believes that the idea of using a mobile phone to check an airline flight or to buy merchandise shown on TV is only two or three years away.
Why does Stockham, a former senior manager with AOL's Shopping Channel who previously worked as marketing director for BestBuy.com, feel so confident? She doesn't think consumers will need any education at all.
"It took almost 10 years to get people to the level of comfort where shopping online was mainstream. The adoption of mobile is even faster because we've demystified the process of buying something before you see it," she says.
Motricity, which helps Black Entertainment Television and Cingular Wireless and others provide mobile content ring tones, e-books and games, is in discussions with merchants to provide more than that, but Stockham declined to name them. Companies who sell products over their own TV networks are a natural fit, she added.
"This is definitely an area of interest for many different retailers at this time," Stockham says.
Take, for example, the shopping options available to Verizon Wireless subscribers. For $5 a month, its Mobile Web 2.0 service, gives them the opportunity to search, place bids and check their account on EBay; buy merchandise at Overstock.com; read ratings and reviews from Consumer Reports; and make purchases at Ticketsnow.com. Each of the services costs an additional $2.50 to $4.