Tag: mobile shopping

E-commerce start-ups facing troubling investment climate

| November 27, 2012

 

E-Commerce Mobile Commerce Investment StrugglesE-commerce business losing traction with investors

Black Friday has passed and that has left many retailers preparing for the remainder of the holiday season. While Christmas still looms, Black Friday was the most important day for the retail industry. Now that that day has passed, retailers can enjoy some mild relief before gearing up to engage consumers again in December. Mobile commerce helped make this year’s Black Friday a major success, and the growing popularity surrounding the concept has lead to many start-up e-commerce businesses being formed. Investors have seen the potential of these start-ups and some are suggesting that they are overvalued.

Mobile commerce continues to spark new businesses

Over the past 18 months, mobile commerce has sparked the founding of several e-commerce platforms that had promised to provide innovative service to consumers and niche markets. Many of these platforms received a proverbial tidal wave of investments that helped them reach their target audience. Unfortunately, most of these platforms failed to meet the expectations of investors, thus yielding modest returns at best. The lackluster performance of some platforms has not stopped the formation of new e-commerce businesses, however. Finding investments may soon become difficult for these start-ups.

Failed e-commerce ventures create unease among investors

Though the e-commerce sector shows promising growth, investors have seen a string of failed online retail ventures from groups like Facebook, Zynga, and Groupon. Smaller companies that promised major returns were unable to deliver, thus making many investors leery of e-commerce ventures and those that revolve around mobile commerce. Former eBay executive Dana Stalder, who is now a partner at Matrix Partners, an investment firm focused on software and communications companies, suggests that there is “inflated valuations” concerning e-commerce ventures.

Capital-intensive business may find lack of support

Stalder notes that most e-commerce businesses are complex and require significant capital to operate. Inventory and shipping costs make it difficult for new businesses to reach a large audience. Even with financial backing, these businesses can easily spend more than they make, thus making them less lucrative for investors. Many of these companies have created an uneasy investment climate for the online retail industry, which could make it exceedingly difficult for new e-commerce start-ups to find the backing that they need.

Mobile commerce kick starts holiday shopping season

| November 27, 2012

 

Mobile Commerce ThanksgivingMobile commerce performs well on Thanksgiving day

Mobile commerce has performed well, even ahead of Black Friday. The holiday season has been expected to be a major success for the mobile commerce industry, but this success may be quickly exceeding the expectations of retailers and those invested in the mobile commerce industry itself. According to data from IBM’s Benchmark service, a platform that provides ongoing measurements of the performance of more than 500 retail companies in the U.S., shows that consumers have been eager to kick start their holiday shopping.

Data shows mobile traffic spikes on Thanksgiving

According to the data from the Benchmark service, online sales spiked 14% on Thanksgiving day, with each sale accounting for an average of $132. The data highlights a strong showing from the mobile commerce sector, where a veritable tide of consumers have been using their mobile devices to purchase products online and at the few retail locations that were open on the holiday. The data shows that the number of consumers using a mobile device to visit a retail site reached 26% on Thanksgiving day, up from the 15% it had been in the previous year.

Apple suggests shopping on holidays becoming more socially acceptable

Technology giant Apple suggests that this is largely due to the concept that mobile commerce and shopping has become more socially acceptable on the day of the holiday. In the past, shopping on Thanksgiving day may have been considered somewhat anti-social, if not wholly impossible due to it being a federal holiday. The stigma surrounding holiday shopping may be diminishing, however, as IBM sees a significant uptick in the number of consumers that are actually purchasing products from their mobile devices. Approximately 9% of all mobile traffic is coming from iOS devices, such as the iPhone and iPad, according to Apple.

Data expected to show capabilities of mobile commerce

The data from the IBM Benchmark service shows that mobile commerce certainly kicked off the holiday shopping season, which began nearly 24 hours before Black Friday. Black Friday remains the most important day of the year for the retail industry, however, and the data for such a major shopping day is expected to further show how powerful mobile commerce is becoming with consumers.