Amazon To Book $2 Billion In M-Commerce This Year
Years ago, Amazon was the first mobile storefront from which I actually made a purchase on my phone. Other than the occasional ringtone or pre-smartphone app download, the company I had trusted with my credit card, identity, purchase and browsing history was the one I first trusted with my virgin M-buy. They were gentle.
And it is not surprising that the company has taken an early lead in mobile retail. According to Internet Retailer, Amazon sold $1 billion in merchandise through m-commerce and its mobile apps in 2010, and it is on track to double that to $2 billion this year. "Amazon has always been at the forefront of new capabilities in e-commerce and now they're doing the same in m-commerce," says Nikki Baird, managing partner, Retail Systems Research, LLC. The findings were part of Internet Retailer's study "Mobile Commerce Top 300," which calculated 2010 retail sales through mobile and 2011 projections.
Amazon is a clear leader in the space, booking more than twice the sales of its next nearest competitor in this ranking. Apple gets the second place in the m-commerce race, with $933.8 million in sales by mobile means in 2011. Lodging is also among the top earners in m-commerce, with Marriott International, Inc getting $144 million on the platform. Wal-Mart is the fourth most successful m-retailer, with $127.7 million in sales. And Intercontinental Hotels & Resorts is fifth with $120 million.
While eBay is responsible for $4 billion in m-commerce in 2011, Internet Retailer determined that the merchandise was on behalf of third parties and so eBay itself did not earn the merchandise value. The study finds eBay's own cut of the m-sales at $370 million. Still that seems to be splitting hairs. In terms of building an m-commerce experience and brand trust that encourages people to shop, bid and make purchases on their cell phone, eBay is every much the leader as Amazon.
Overall, m-commerce has doubled in 2011, Internet Retailer determined. The 300 retailers the study tracked, including travel companies and ticket sellers, should book $5.37 billion in sales by the end of this year, a 105% increase over 2011. Amazon alone represents 37% of the m-commerce market.
The key to its success, Amazon tells Internet Retailer, is focusing much of their design efforts on simplicity. From assisted search to bar code scanning, voice input, the company does what it can to remove every possible impediment to the sale, "so customers can go from 'I want that' to 'I bought that' in under 30 seconds," says Amazon Director of Mobile Sam Hall.
Of course it helps when you have a killer recommendation engine feeding you items you didn't know you wanted. Amazon extends its famously addictive recommended products list across mobile app, site and tablet.
Mobile also has the potential to remake the purchase funnel altogether in some categories. At this summer's Mobile Insider Summit in Lake Tahoe, Travelocity's then VP of Global Product Beth Murphy told us that because of mobile people were ordering hotel rooms on the same day at a much higher clip. The platform was not only adding convenience but reshaping how people made travel plans and thus re-oriented the opportunities for marketers to reach them. Once again, the lesson of mobile is that the platforms doesn't just move digital activity to a smaller screen. It effectively allows consumers to change their shopping behaviors in unforeseen ways.