• by Jack Loechner , Staff Writer @mp_research, October 14, 2010

A survey by Internet Retailer, conducted in August with readers of its IRNewsLink e-newsletter, in conjunction with survey firm Vovici Corp., of 149 chain retailers, web-only merchants, catalog companies and consumer brand manufacturers, finds that today only 8.8% of retail organizations operate a mobile commerce site, but 75.9% of retailers expect to launch a mobile commerce site. Of those, 31.9% expect to be selling through mobile phones in under six months and another 52.6% in less than one year.

Those aggressive plans reflect the high expectations for the mobile channel. The report projects that mobile commerce could generate U.S. sales of $23.4 billion by 2015, up 875% from an estimated $2.4 billion in 2010.

Mark Beccue, a senior analyst with Allied Business Intelligence Inc., says "If online retailers haven't developed a sense of urgency about mobile commerce yet, they need to... "

The report says that:

• 34.5% of merchants have delayed implementing mobile commerce because of other e-commerce priorities
• 30.4% because of limited funding
• 23% lack mobile design, development and programming expertise

Beccue points out, however, that "...getting up and running with mobile commerce can be easier to implement than the commitment to the amount of time and money needed to sustain a major e-commerce site... "

The survey reveals that only 5.9% of merchants are generating annual mobile sales of over $10 million, while 64.7% of merchants  have annual mobile retail sales of $250,000 or less, including 50% under $50,000.

Average ticket and conversion rates are below the average ticket of $197 and conversion rate of 3.5% of merchants listed in the Internet Retailer Top 500 Guide. The survey of 79 web-only merchants, 33 chain retailers, 23 consumer brand manufacturers and 14 catalogers finds that:

• 71% of responding companies had an average ticket of $100 or less, including 29% under $50.
•  Conversion rates on mobile commerce sites also are modest-under 1% for 23.3% of merchants reported conversion rates under 1%
• 53.3% are under 2%

Retailers have clear mobile commerce goals in mind, the survey notes:

• 39.1% of companies cite attracting more visitors and shoppers and generating more sales as their main business objectives
• 13.5% want to generate a higher sales conversion
• 12.8% plan to improve marketing and merchandising
• 12.2% want to increase multichannel sales
• 10.1% want to improve customer service

Most merchants are building, or expect to build, their mobile commerce program on only a modest budget. Only 25.8% of merchants taking part in the Internet Retailer survey have an annual mobile commerce budget that's greater than $200,000. In comparison, 61.3% expect to spend no more than $50,000.

51.5% of all participants in the Internet Retailer survey used an outside vendor first to build and then maintain their mobile commerce sites, and 53.1% hired an outside firm to develop their mobile apps.

The report includes a quotation from Mark Pierce, CEO of MarketLive Inc, suggesting that for retailers with an established e-commerce site, a version optimized for smart phones and the iPad can be launched in as soon as 30 days at a cost of $20,000 to $30,000, while a mobile app can also be developed in about two months, but at a more significant cost of between $50,000 to $150,000.

With many top retailing executives involving themselves in the process, mobile commerce will become more of a strategic priority, especially at bigger companies with established multichannel brands, says

The report concludes with Pierce's observation that "... Mobile commerce will be a game changer!"

For the complete article  from Internet Retailer, please visit here.