Special Report: E-commerce eyes potential of communication devices

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Lil Mohan has a bold vision. He foresees a customer in a restaurant or bar, or a driver in a car hearing a hot new song on the radio. That person logs on to Amazon.com with a Web-enabled phone or electronic organizer, reads a review and buys a copy on the spot.

It's not a remote possibility, Mr. Mohan says. In fact, customers have been doing it since Amazon started its Anywhere electronic-commerce division in October, which offers Amazon's entire store to the wireless Web.

"People are beginning to see that they can buy from the Amazon store while they're not at a computer terminal," enthuses Mr. Mohan, general manager of Amazon.com Anywhere, a division of the online company available to users of Palm Inc.'s Palm organizer and Sprint PCS Wireless Web phones.

Customers cannot download purchased content; books and CDs (and, for that matter, toys and electronics) still have to be shipped via a delivery service.


Rival Barnes & Noble.com also has moved its e-store onto Palm VII, and it's looking at ways to sell over beepers and wireless phones, a spokeswoman says. Barnes & Noble distributes content for e-book devices marketed by Gemstar International Group's NuvoMedia. The e-tailer later this year will begin selling e-book content for Microsoft Corp.'s upcoming Pocket PC devices.

From selling content to placing ads on wireless devices, electronic commerce is moving out of home and onto users' digital communication devices.

Retailers headed toward handheld e-commerce merchandising will find it a useful venue to keep current customers as well as create new sales channels, says Mark Zohar, research director with consultancy Forrester Research. (Another Forrester analyst, however, is skeptical about wireless phone ads; Even so, don't expect General Motors Corp. to sell cars or Dell Computer Corp. to sell computers via handheld devices. This will be the realm of smaller-ticket purchases, from theater or concert tickets to more traditional e-commerce products such as airline tickets, books, music and the like, Mr. Zohar says.

Success will come down to e-marketers' ability to provide users valuable content in a usable form, he says.

"In order to stimulate demand," Mr. Zohar says, "the information has to be presented intelligently, personalized, related to the customer profile and be extremely actionable," he says. "There will be impulse buying, but for the next couple of years, it really is a play of retention and extension of brand into the mobile devices."

In Japan, 70% of mobile-device users are buying content, such as weather alerts, news or business headlines, or other content that interests them, Mr. Zohar says. Information is delivered online by companies that formerly provided the information exclusively on the Web.

"Consumers are willing to pay for premium content," he says.

Troy Tyler has found common ground between message delivery and marketing. There are 40 million text message-capable pagers, Web phones and digital cellular phones scattered across the U.S., Mr. Tyler says. The president-CEO of smart-Ray Network provides free content to device users--and an advertising venue for marketers. Each message he sends to a customer's device will carry a brief tagline from an advertiser.


While his service doesn't provide e-commerce, smartRay is one of a growing number of similar services that feed information to phones and electronic organizers. It is a content-based marketing medium ripe for advertisers' messages.

"The number of these devices is going to blow away the number of desktop computers in short order," Mr. Tyler says.

To many, this is the new out-of-home medium. By matching messages to user preferences and demographics, marketers will be able to better target the right recipient with the right message--at the right time.

This so-called message-to-moment advertising can link an ad from an electronic stock brokerage with a user's review of a stock's activity on Wall Street. Using global positioning technology to track a user's movements, an advertiser can link a sales message to the person's proximity to a retail location (assuming advertiser, network and user can agree on privacy issues).


E-commerce potential also is potent. Customers can make impulse buys while on the run. Purchasing profiles will be stored online, providing rich demographic and psychographic information that can be used to better target marketing messages, Mr. Zohar says. (Again, this assumes privacy issues can be managed, perhaps by giving users incentives to trade personal data for something of value.)

"The first and strongest market for this segment will be the business traveler," Mr. Zohar wrote in a report titled "The Dawn of Mobile E-commerce." "Road warriors will value mobile access to critical information," such as travel directions, flight information and hotel reservations.

Internet travel site Biz-travel.com launched an e-commerce service on the AT&T Wireless PocketNet service in 1999, and will roll out an e-commerce service around mid-2000, says VP-general manager Justin Shaw. (Biztravel is owned by Rosenbluth International.) PocketNet offers voice and data over special wireless phones.

Right now, an impediment to online marketing or e-commerce transaction capabilities is the small screen size available with Web phones and wireless organizers.

E-commerce will be further hindered by bandwidth limitations, Mr. Shaw says.

Still, Biztravel.com is bullish on the need to be in the space, at least as a complement to online and telephone customer contact, he says.

"Our goal is to be the full-service company for business travelers, and we don't care how they want to contact us," Mr. Shaw says.

Wireless devices will make consumers reachable almost anywhere, says Charles Conn, CEO of Ticketmaster Online-CitySearch, whose company's services and content are available via the Palm VII organizer and select Nokia phones. The company provides alerts to consumers about reduced-price tickets, restaurant specials and other deals.

For marketers, especially those operating in cyberspace, consumers will become increasingly accessible. Amazon's Mr. Mohan says he believes the next 24 months will be a make-or-break period for mobile e-commerce going mainstream.

Mr. Conn contends 2000 will be the year the masses go wireless.

"This year's theme will be always on. Everywhere," he says.

Copyright March 2000, Crain Communications Inc.

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