Retailers shift focus away from apps to optimization

It's mobile with a bullet at the top of retailers' priority lists when it comes to marketing, but the focus going forward will be on mobile-optimized sites rather than dedicated apps.

Roughly 58 percent of retailers say mobile is their top priority in 2015, up from from 53 percent last year, according to a new report from Shop.org and Forrester Research. This coincides with a rise in sales completed on mobile devices.

The percentage of online sales grew from 8 percent in 2013 to 12 percent in 2014, an increase of 50 percent. Tablets' share also grew, albeit at a slower rate, from 13 percent of online sales in 2013 to 16 percent in 2014.

But mobile marketing isn't being allocated funds commiserate to this reported priority. Of those retailers surveyed, 32 percent report spending less than $100,000 on their smartphone development efforts in 2014 and 68 percent report spending less than $1 million on smartphone developments last year. When it comes to tablets, just 4 percent say they invested between $100,000 and $250,000 last year. Eight in 10 surveyed plan to increase their mobile budgets by at least 20 percent in 2015.

"Consumers are flocking to retailers' mobile sites at a faster pace and with more interaction than ever before, so naturally they expect retailers to offer fast, well-designed mobile services that meet their needs," said Vicki Cantrell, NRF senior VP and Shop.org executive director. "With that in mind and with several years of mobile commerce now under the industry's belt, retailers feel confident in their mobile investments. For retailers, when it comes to mobile strategies, small but continuous incremental changes really do go a long way to keep their savvy customers happy."

Retailers are making mobile a key part of any omnichannel strategy to tie together digital touchpoints.

Forty-five percent of those surveyed hope to improve or invest in programs like buy online–pick up in store, ship-from-store and inventory visibility, up significantly from 26 percent who listed omninchannel efforts as a priority last year. Additionally, nearly four in 10 (38 percent) said marketing optimization was their third priority for 2015, which includes initiatives around customer retention and acquisition.

But dedicated apps are taking a back seat to mobile-optimized websites, thanks to a perceived low ROI. More than half (56 percent) of retailers surveyed say that apps are not a key component of their mobile marketing strategy, and an even greater percentage agree apps are not critical to their employee strategy. This, in spite of research that shows mobile app use has jumped 55 percent in stores.

"Apps are simply too expensive to build and maintain for most retailers, begging the question—what's after apps?" said Sucharita Mulpuru, Forrester's VP and principal analyst. "We'll see retailers focus spending on redesigning the core site, which benefits the site experience beyond mobile, and embracing responsive design—an approach that retailers favor over apps, with nearly half already applying it to their mobile site."

For more:
-See the State of Retailing Online report

Related stories:
Retail sales up 168% from mobile-optimized sites
Apps dominate mobile as web browsing declines
Amazon, eBay, Walmart see more mobile-only visits
Mobile spending projected to rise in 2014
PayPal puts 'mobile first' in redesign

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