mPoria Case Study: Mobile Commerce Pioneers Profiting

By Naomi Graychase

Among the newest players in the ever-expanding mobile commerce (m-commerce) market is Seattle-based mPoria. The three-year-old company launched its GoMobile! solution for merchants this spring with a focus on making it simple and cost-effective for e-tailers both small and large to cash in on the burgeoning mobile commerce sales potential.

"One of the reasons we got into mobile shopping," said Dan Wright, mPoria's CEO, "is that we were acquired by a large Japanese company in 2003. In that year, over one billion dollars of goods were purchased over mobile devices in Japan. The mobile market evolution has led the U.S. by five to six years. There were ten billion dollars of physical goods sold in Japan over mobile phones in 2006. That's close to a tenfold growth in three years. When we look at the US, we see similar trends. It is going to be coming here. Already we see the uptake of retailers jumping on. We launched several months ago and we have tripled our base. Trend-wise, it's very encouraging."

In fact, Google is joining eBay, PayPal and other companies jumping into the m-commerce space as it recently began beta-testing a mobile version of its AdSense program.

Google e-mailed AdSense partners asking them if they wanted to participate: "As part of our efforts to develop new and improved AdSense products for our partners, we will begin a limited beta test for AdSense for mobile. AdSense for mobile allows publishers to monetize their mobile Web sites through the placement of targeted text ads. Publishers can take advantage of the fast-growing mobile advertising market and benefit from our targeting technology."

For more information, visit the AdSense mobile FAQ.

Appealing to a Younger Demographic
Meanwhile, some m-commerce pioneers are already staking out a claim on the mobile frontier. Michigan-based Moosejaw Mountaineering is one. This small outdoor outfitter successfully competes with larger chains such as North Face, LL Bean, and Patagonia by sticking to a strategy that involves relating to its young, active, customer base-a customer base that is full of early adopters and college kids who relate to text messages and online (and mobile) shopping more readily than to catalogs and direct mail.

"We needed to resonate with a younger customer," said Robert Wolfe, who co-founded Moosejaw in 1992. "If college kids are texting, then we better be texting. In 1995, if college kids are on the Internet, than we better be on the Internet. That's how we ended up with early entry in mobile commerce. Not having a mobile channel is like not having a business card in 1975."

The transition from using text messages as a marketing strategy to opening a mobile commerce channel was a direct response to his customers' behavior, said Wolfe.

"What happened with us in mobile is that our average staff are young and former customers. These are people who use their text more than they talk on the phone or e-mail. They will text people sitting right next to them. We thought it would be super valuable to have the ability to have your tracking number texted to you. You can place an order online and get the info texted to you. Is it a big deal? No, but it is cool. If your cell phone is an important part of your day, then we better be interacting with that."

Perfect for Small and Medium-Sized Businesses
Moosejaw selected mPoria from among a small field of pricier competitors because the up-and-coming company was the easiest to work with. The mobile channel launched a couple of months ago and Wolfe couldn't be happier.

"It was super easy," he said. "They're super cool. We view it as a partnership versus being their customers. They couldn't be better communicators, couldn't get it any more. They've been exemplary."

The Moosejaw online store reports getting 500,000 unique visitors per month and five million page views. Orders received via the mobile channel are processed just like orders placed at the online store and at the brick-and-mortar retail stores. Every order syncs up with the main database so that inventory tracking requires no special adjustments.

"It happens jut like a regular order," said Wolfe.

Jeff Stone, President of BikeSomeWhere.com and SwingSomeWhere.com, also chose mPoria's GoMobile! solution and is happy with the results. "We were looking for a product that we could get up and running as quickly as possible," said Stone. "There were a couple of solutions out there and mPoria had exactly what we wanted, like the integrated PayPal solution. We also liked how mPoria presented their place in the marketplace — basically, the cost/benefit that we could add it on and see how we could process orders through mobile commerce."

A High-Quality Solution that Won't Break the Bank
Affordability and simplicity have been the driving factors behind mPoria's GoMobile! software, said co-founder Wright.

"Retailers sign up for a package based on their SKUs. They pay a set-up fee, and then they provide us with a data feed, just like you'd send to Shopping.com or Shopzilla. They choose a color scheme, etc., give us their shipping and tax policies, and then we can launch a store in less than an hour," said Wright. "Typically, it takes 15 minutes."

Stone was pleased with both the simplicity of the set-up process and the result.

"From our perspective, it was very easy," said Stone, who describes his six-year-old online business as "medium-sized." "We already do so many data feeds to places like Amazon and Froogal, that all we had to do was to take one to fit their format. They were able to map our categories to their categories. Within a week, they had a demo site ready to go. In another week, we had PayPal integration. There were a couple of steps for shipping and tax feeds, and then the site was up and running within two weeks."

Clearing Obstacles
One of the challenges facing retailers building stores for the mobile web is the large variety of phone types in use.

"There are over 100 phones that consumers in the U.S. can purchase," explained Wright, "and each one has a different browser. Every Motorola phone has the Motorola Internet Browser (MIB), for instance, which then behaves differently depending on the version on the device. When you design an online store, you have to design for three browsers on the Internet; when you design for the mobile Web, you have to design for dozens and you have to face the compatibility issues associated with that. It's a heavy burden for the vast majority of retailers. That's an example of something our service solves for our retailers."

Flat-Fee Business Model Means No Commissions
mPoria's business model does not rely on taking percentages or commissions from sales conducted using its software. Rather, retailers subscribing to its service pay a monthly flat fee based on their SKUs ($69.99, $99.99, or $149.99).

"It's scalable and easy to use," said Wright. "We have very small retailers that we work with as well as fortune 1000 companies. I will say this: the retailers that sell products to consumers that are 18-35 are the sweet spot. If you're a retailer and you sell to that target demo, then they are mobile savvy, likely to shop, and make purchases on their phones. People in older demographics shop, but right now, the real sweet spot is the mid-20s early-30s demo."

Retailers who choose GoMobile! as their m-commerce platform are also added to the mPoria shopping portal, where they gain visibility, traffic and cross-marketing opportunities. Sales conducted as a result of click-throughs from the portal are charged an mPoria commission of 5-20 percent. Apart from being a revenue stream for mPoria, though, the portal is a proving ground for the software, as well as a jumping off point for mobile consumers looking for quick answers to their shopping needs.

"The mPoria portal has helped us learn how consumers interact with the service," said Wright. "We got smarter about how the purchasing process should be. We minimize clicks on the phone, for instance, then we roll that back into the platform so that retailers can offer it to their customers."

Naomi Graychase is a freelance writer specializing in consumer electronics and mobile technology.

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