Sue Mitchell
March 29, 2017
afr
Facebook’s global retail chief Martin Barthel has urged retailers to “get radical” and adopt a mobile-first strategy or risk being left behind when Amazon arrives in Australia.
Mr Barthel said many retailers were still grappling with multi-channel or omni-channel models when consumers were doing more of their purchasing and product research on mobile devices, including through “buy” buttons on Facebook and Instagram.
“Mobile is becoming the new shopping window online and offline,” Mr Barthel told The Australian Financial Review, citing Adobe reports that estimated 33 per cent of e-commerce sales and 50 per cent of online ecommerce traffic are now made through mobile devices.
Other recent studies suggest that a third of transactions in bricks-and-mortar stores have a mobile touchpoint and 70 per cent of product discovery now happens on mobile devices.
“Retailers need to think more radically,” said Mr Barthel, a guest speaker at the Inside Retail Live summit this week. “Many are stuck building multi-channel strategies and now mobile is coming.”
“Offline retail is suffering globally – mobile gives [retailers] an opportunity to reach customers in a way they haven’t been able to before.”
He urged retailers to emulate Facebook’s own journey from a desktop social media platform to a mobile-first model.
When Facebook went public five years ago it had no revenues from mobile commerce, even though mobile use was growing exponentially.
‘Lockdown moment’
“We were basically a desktop platform, all products were built for desktop. As more people were using mobile devices we didn’t have a clear view on how to monetise our business on mobile devices,” Mr Barthel said. “It would have been a huge risk for our future business.”
During a 90-day “lockdown” project in 2012, Facebook co-founder Mark Zuckerberg pulled resources from every existing project to invest in new mobile technologies and told engineers not to pitch any new products unless they were mobile first.
“In five years we are now basically a mobile-only platform – I believe every company can do this,” said Mr Barthel, 47, who joined Facebook a year ago after almost 11 years at eBay, four at BCG and five at Chanel.
Retailers needed to take a radical approach, breaking down silos between online and offline retail and digital, social and traditional media teams.
“My message for retailers is look for your lockdown moment, look for this radical shift in what you are doing,” he said.
Amazon’s expansion, which is slated for later this year or early next year, would force retailers to accelerate the shift to mobile-first models.
“Amazon is really fast and bold. What they do well is customer acquisition at scale and personalisation at scale, their merchandising algorithm is really world class,” Mr Barthel said. “This is something Australian retailers will need to do.”
Mr Barthel said small Australian retailers such as Mon Purse and The Daily Edited, in which OrotonGroup has acquired a 30 per cent stake, were streets ahead of large retailers in using mobile-first strategies, customer acquisition and personalisation to grow sales.
Facebook now has 1.9 billion users globally, almost a third of the world’s population. Of the 15 million Australians who use Facebook every month, about 14 million access Facebook through mobile devices.
Australians spend 1.7 hours a day on their mobile devices and two minutes of every five spent on mobile phones are on Facebook, Messenger and Instagram.
“If you’re a retailer or an ecommerce company and want to reach customers where they spend their time, Facebook is an amazing platform to reach people at scale as no other platform can do it,” Mr Barthel said.
Facebook’s revenues rose 51 per cent to a record $US8.8 billion in the December quarter, boosted by mobile video ad sales on Facebook and Instagram. Mobile ad revenue represented about 84 per cent of total ad sales – almost double that of a year ago.
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