Walmart?s hefty investment in mobile lends legitimacy to the space
With the news that Walmart will acquire mobile and social commerce firm Kosmix, the big-box retailer became the latest of several large brands last week demonstrating a healthy commitment to the mobile space by investing heavily in related acquisitions or new business.
EBay?s decision to acquire Where, Groupon?s deal for Whrrl and Visa?s launch of a mobile deals business ? as well as the Walmart news ? all point to the growing recognition by big brands that mobile is a force to be reckoned with.
?These deals show that a company like eBay or Groupon is looking forward and saying, ?How can we be a player in the emerging mobile commerce and mobile marketing ecosystem,'? said Neil Strother, Kirkland, WA-based practice director at ABI Research. ?They?re not sitting back and letting others be the leaders.?
Driving consumers into stores
In the eBay, Groupon and Walmart deals, in particular, the companies acquire mobile marketing technology rather than develop it in-house.
But what all of the deals have in common is that big brands are placing bets on mobile in terms of driving in-store visits and to directly spur sales.
?There is an acknowledgement that we?re rapidly shifting from a place where smartphones make up a small population of phones, particularly in North America, to a large population of mobile phones ? which makes a lot of these GPS/local or just high-quality interactions via mobile much more attractive,? said Nikki Baird, managing partner at Retail Systems Research, Miami.
?I?ve always thought of eBay as sort of the secondary market alternative to purchasing new from a retailer,? she said. ?So, Where, in combination with PayPal, seems on the surface to be enabling more competition for eBay?s own sellers, not less.
?But I can also see the potential for money to be made on the affiliate side in paying to participate in the search through offers or other mechanisms."
Ms. Baird said that Groupon and a check-in capability makes a lot of sense. It would make an even better way to virally share great deals, plus adding more on the social side of redemption.
More retailers and credit card companies and probably others that have not even been considered yet will be offering deals of the day soon.
The Walmart deal for Kosmix could bolster the retailer?s international multichannel retail strategy.
?The acquisition is part of our commitment to mobile and social commerce and our efforts to integrate the shopping experience between traditional stores ? brick and mortar ? and ecommerce,? said Lorenzo Lopez, spokesman for Walmart, Bentonville, AZ.
Kosmix, based in Mountain View, CA, has developed a social media technology platform that filters and organizes social media content with the goal of connecting people to real-time information that matters to them.
The founders and the Kosmix team will operate as part of the recently formed @WalmartLabs group, which is focused on creating technologies and businesses around social media and mobile commerce.
Making the case for mobile
Last week?s spat of deals also help lend legitimacy to the mobile space where there are still many small players.
?Wherever a big company acquires a small innovator, especially when they don?t already have a competing service in-house, it just lends almost immediate market legitimacy,? Ms. Baird said.
?I think we have barely scratched the surface of innovation in combining mobile, social and local and retail and commerce,? she said. ?As soon as more innovators prove their model, we?ll see them snatched up by larger players.?
Most of the deals have been occurring within the mobile commerce space. Consumers? increasing reliance on their mobile devices is what is driving these investments.
Fifty percent of consumers in the United States use a mobile device to navigate their hectic shopping experience, according to a study by Leo Burnett?s marketing services arm Arc Worldwide.
Mobile shopping has become a part of the daily routine for American consumers, who use their mobile devices for everything from comparing the prices of televisions to ordering a morning latte and reading restaurant reviews.
This trend is quickly and decisively changing the traditional shopping process and issuing an ultimatum to companies: deliver valuable mobile experiences or risk losing customers.
?The mobile industry will benefit [from these deals], not only from the attention these companies are receiving but, also because it will open new opportunities for startups,? said Joy Liuzzo, senior director of InsightExpress, Stamford, CT.
?Companies follow the patterns of consumers,? she said. ?We?ve seen the mobile audience grow in leaps and bounds over the past year and companies need to be where the consumers are.
"We?ve seen the same thing happen with the Internet and social media.?
Walmart is no stranger to mobile