Gary Schwartz Headshot

Changing Channels

How to reach mobile customers — and get them to buy

by Kate Pavao, November 2011

Retailers need to realize that mobile “is fundamentally a different type of channel,” says Gary Schwartz, author of The Impulse Economy: Understanding Mobile Shoppers and What Makes Them Buy. Here, he talks to Profit about how to avoid the common pitfalls retailers fall into when trying to reach mobile customers — and explains what you should be doing instead.

Profit: What is the “impulse economy”?

Schwartz: Impulse is all about understanding the native engagement attention span of the mobile consumer. When you’re dealing with someone who is on the move, you obviously have to intercept them with minimal disruption. And you have to facilitate interactivity with limited clicks.

If you look at statistics, you see that purchasing intent is really high — almost unnaturally high — with mobile. It’s 12 percent versus two or three percent online. The problem is that high purchase intent is only present for a nanosecond. Requiring seven clicks is way too many and you have abandoned shopping carts dotted right across the ecosystem. With mobile, two clicks is one click too many.

Profit: What is the biggest mistake retailers make with mobile?

Schwartz: From a retail perspective, the biggest mistake companies make is in how they think about the aisle. The traditional store was limited aisle. Then there was this wonderful thing called the Internet, where you could warehouse your merchandise in the middle of the desert in Phoenix. So you had endless aisle. The biggest mistake companies are making now is thinking that endless aisle translates to a small screen. And so the results are underwhelming.

What the retailers need to realize is that we’re moving from limited aisle, to endless aisle, to targeted aisle. And it’s not about giving everybody everything, because that’s a large screen experience. With large screen, you can afford to not be economical about your layout, about the way that you present data and products. With the small screen, you have to know exactly what your consumer wants, and you have to give it to them.

Profit: How should retailers deal with consumers security concerns?

Schwartz: The mobile device is in some ways more secure than your cowhide wallet, but that misses the point. The phone is a much more personal device, it’s a more personal artifact than the wallet. There’s always going to be a little bit more hype and concern and you can’t explain in a very technocratic way the reasons that it’s a secure platform.

You can argue until the cow’s come home that the mobile wallet is securely in a separate place than the other data and password, but the perception is, “I have my whole life there.” You have to respect the consumer’s angst when it comes to using this as a new platform.

Look, any platform known to man when it has enough traffic on it, will be hacked. Historically we know if there’s a monetary gain, somebody somewhere will find a hole. What we have to anticipate is that no matter how small that hole is, no matter how strong we comeback with, “Oh no, it’s a little glitch and we fixed it,” the media is going to play it up because of the sensitivity of the platform.

What you’re going to find is the bigger problem is not the security, but the convenience. Proximity checkout using Near Field Communication will not be everywhere. Potentially, we’ve got years of resolving some of the security issues before it becomes mainstream, Where you find most of your commerce and impulse checkout items happening is in the cloud, and so to optimize that impulse purchase, focus needs to be on quick checkout in the cloud.


Gary Schwartz is president and CEO of Impact Mobile as well as the chairman of the Mobile Entertainment Forum Interactive Advertising Bureau.You can keep up with new developments in the mobile industry through his blog at www.theimpulseeconomy.com/.