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Will Mobile Commerce Ever Rule the World?

What is M-Commerce?

M-commerce is a term that is used to refer to the growing practice of conducting financialand promotional activities with the use of a wireless handheld device. The termm-commerce is short for mobile commerce, and recognizes that the transactions may beconducted using cell phones, personal digital assistants and other hand held devices thathave operate with Internet access. While still in its infancy, the concept of m-commercehas been refined in recent years and is beginning to become more popular.

One of the basic examples of m-commerce has to do with receiving sales promotions viathe hand held device. The most common application would involve the service providersending text messages to the subscriber that promote new product offerings, free trials onadditional services, or other types of promotional campaigns. The subscriber is notcharged a fee for the text message, and often can respond with a return text messagewithout incurring any type of fee. Several major cellular services off subscribers to optinto this type of m-commerce, or be excluded from receiving the messages.

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Where is m-commerce now?

Where is m-commerce now? The simple answer? Mostly everywhere. With the boom insmartphone and tablet ownership, m-commerce has followed suit. In 2012, m-commercesales in the U.S. hit $24.66 billion, which was an 81% increase from $13.63 billion in 2011.More impressively, looking at the 2012 holiday season alone, mobile visitors accountedfor a third of holiday Ecommerce traffic.

And you can’t look at m-commerce today without addressing “showrooming.” If youhaven’t heard of the term, showrooming is when a customer goes into a brick-and-mortarstore to check out a product, then instead of purchasing it at that store, finds that sameproduct online and buys it for a cheaper price. The rise of m-commerce has spurredshowrooming to grow as well, with 134% more shoppers showrooming during the 2012holiday season than in 2011.

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What is the future of m-commerce?

The most prominent m-commerce trend is its own growth. According to Forrester, annualm-commerce sales are predicted to quadruple to $31 billion in the next five years. In 2012,some Ecommerce sites (like Amazon) saw remarkable growth, while most businessesexperienced only limited m-commerce success. However, one thing they all have incommon is that they now universally recognize m-commerce as an important way toenhance their brand, increase their sales and keep up with competitors. In short, thefuture of m-commerce is bright, and looks like it’s getting even brighter.

Another trend in m-commerce is that customers desire more information on mobilewebsites. Studies show that 80% of smartphone users want more product informationwhen shopping on their mobile devices. A large part of m-commerce’s appeal may beconvenience, but if that convenience comes at the sacrifice of information, customers willbe sure to look elsewhere. The larger trend here is that ultimately, businesses are inuncharted waters when it comes to their mobile offerings, they’re still finding out whatworks and what doesn’t.

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The last big trend, by far, is the rise of tablet commerce. Much of it has to do with thenature of tablets themselves. With their larger screens and portability, tablets make iteasier to navigate mobile e-commerce websites. These features make it no surprise that55% of tablet owners use their tablets for online shopping, whereas only 28% ofsmartphone owners shop on that device. Furthermore, tablets in general are growing inpopularity. Studies showed that in 2012, about 29% of adults owned a tablet, compared to13% in 2011. These factors combined have led people to envision a bright future for tabletcommerce. According to eMarketer, tablets commerce is predicted to reach $24 billionin 2013 and make up for more than 9% of all online sales.

Rulers of Mobile Commerce in Market Industry

According to a new Business Insider Intelligence Report, the three top mobile commerceoperators in the U.S., Amazon (NASDAQ: AMZN [FREE Stock Trend Analysis]), eBay(NASDAQ: EBAY), and Wal-Mart (NYSE: WMT) have all but solved the secret of mobileengagement.

Interestingly, each company uses mobile in ways that provide them with a huge audience,yet ways that are unique to their business models. How they have done this is the subjectof the BI report.

Both eBay and Amazon have transitioned from solid PC-based e-commerce to mobile.Wal-Mart, slower than the other two to ramp up its PC channel, has nonetheless deviseda unique mobile approach in an effort to adopt a winning strategy.

Taken separately, the “Big Three” as BI called them, offer a case study in mobileengagement.

Amazon, for example, has more mobile-only users than Facebook (NASDAQ: FB) in theU.S. The company’s mobile focus has to do with optimizing user experience. This isimportant because many mobile users never see the Amazon website except from theirsmartphones.

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Advantages of Mobile Commerce

There’s no doubt that mobile web use is growing. Recent reports show that worldwidecellular networks are experiencing a major boost. In fact, there are even suspicions thatthe current infrastructure won’t be able to keep up with the new demands. 3G traffic inmarkets will grow by 20% by the end of 2014. There is a forecast which reveals that morethan a third of Europeans will be using mobile internet by 2014.

Consumers have come to use mobile phones for shopping online. It’s fast, you can do itanywhere and you don’t need a PC – just your one thing you carry everywhere with you.Mobile phone users think that they would shop using their mobile devices more if theprocedure was not so burdensome, products were easier to find and their devicessupported secure credit card transactions. So as business owners you should take all thisinto account.

But let’s see what are the main advantages that mobile commerce will bring you:

Flexible accessibility. Users can be accessible through their mobile phones and at the sametime be accessible online too by logging on to various mobile messengers like Facebook,Twitter, Gmail and other networking platforms.

Easy connectivity. As long as the network signal is available, mobile devices can connectto the internet and perform commercial transactions, mobile to mobile and even mobileto other devices. No need for modem or WI-FI connectivity set up.

Time efficient. Performing m-commerce transactions doesn’t require the user to pluganything like desktop computers or wait for the laptop to load. Just push the on button ofyour mobile device and you are ready to go.

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In-store rewards. In stores with NFC and/or QR code support, customers can obtainexclusive savings right at the point of sale simply by scanning with their smartphones.There are lots of free applications for scanning QR codes (for Android, for Apple, forWindows Phone, for BlackBerry).

Best E-commerce Design

Mobile websites face the challenge of fitting all desktop content into a small screendisplay. The user should be able to easily and intuitively surf your site. There’s anemergent trend of using the three horizontal bars icon representing the category menu.Taking into account the tremendous smartphone explosion, these menu buttons are afantastic way of starting surfing your website, but you should really know how to usethem taking into account the design of your mobile website.

Although nowadays we can visit whichever website using our smartphones, we have totake into account many aspects in order to adapt your desktop website’s design to a smallscreen resolution. Users shouldn’t “collaborate” by pinching and zooming in in order to beable to visualize your products, that’s why you should create an adequate mobile websitethat will allow an easy buying process and generate pleasing user experience.

The main aspects you should take into account are:

Resources and images have to load fast on mobile devices. You should avoid Flashand other technologies that don’t work properly in other kinds of devices.

The text should be readable without the user having to zoom in.

Surfing and clicking links should be an easy and fast process. In order to be able to dothat, the text must be readable, so the user clicks on the right link.

The shopping cart should always be visible, that way the user always has access to it.

The user should be able to perform searches without any difficulty.

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Examples of M-commerce

Here are some examples of m-commerce websites that might interest you in order to havean idea what a good mobile websites looks like.

BestBuy. Best Buy uses almost identical icons and images on its desktop and mobilesites. The evenness of design and navigation means that clients familiar with thecompany’s website will feel right like home on the mobile website.

Juicy Couture. If your brand is fashion, your mobile website needs to conveythis quality. Juicy Couture’s is a great mobile site because it’s an excellent extension of thecompany’s brand.

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eBay. eBay really knows how to present products on mobile devices. On my Android,

the website loaded quite fast.

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Mobile Commerce Trends and Statistics

The proliferation of tablets, smartphones and other mobile devices is changing the waywe research, evaluate and buy products and services online. Mobile-ready is no longeroptional. Online retailers that ignore their mobile customers risk losing business–big time.The mobile phenomenon isn’t isolated to e-commerce, either. This shift in consumerbehavior represents a bigger trend that all business owners must face head-on. See what’sahead for mobile and e-commerce in 2012 and beyond, and see why mobile matters nomatter what kind of business you run.

E-Commerce: Going Massive

People like to shop online, and it shows. In the US, retail e-commerce sales have seen nice,steady growth. Retail e-commerce sales increased close to 4x, from $42 billion in 2002 to$162 billion last year.

Retail E-commerce Sales in the US, 2002 – 2011 ($ Billions)

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Mobile Devices: Growing Use & Impact

The use of mobile devices is growing. Fast. As Mashable reports:

“There are almost 120 million smartphone users in the U.S. right now [in 2012], and abouthalf as many tablet users. By 2014, those numbers are expected to grow to over 150million and almost 90 million, respectively.”

The growing smartphone and tablet population will definitely have an impact on onlineshopping. According to online shopping platform Shopify, mobile devices will account for40% of all e-commerce traffic by September 2013. This is up from just 4% in September2011. By contract, PC’s will account for less traffic, dropping from almost 100% to 60% oftraffic.

Traffic Projections for Mobile Devices and PC’s

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Besides making purchases or completing a payment, smartphone and tablet owners alsouse their devices to do research (e.g., read reviews) and compare pricing.

Activities Completed on a Smartphone or Tablet

Mobile Commerce Sales: Dramatically IncreasingM-commerce sales are growing exponentially, too. In 2010, revenue from mobilecommerce was just $3 billion. Today, that total has reached $10 billion. In just a few years,mobile commerce revenue is expected to reach $31 billion (globally, projections come to$119 billion by 2015).

Projected Mobile Commerce Revenue in the US ($ Billions)

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Mobile Customers: Dangerous To Ignore

Mobile shoppers are engaged and valuable. Tablet users make a purchase at close to thesame rate as users on a PC.

Online Shopping Conversion Rates By Device

And, on average, purchases made on a tablet are of higher value than a purchase madeusing a PC. Not far behind are purchases made on smartphones; smartphone users alsohave a healthy average order value.

Average Order Value By Device

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Implications For Retailers–And All Business Owners

It’s clear that mobile poses a huge business opportunity. But in spite of this evidence, mostretailers have not taken the steps to become a contender in the mobile commerce arena.Shopify cites research from Forrester, which shows that 71% of retailers provide onlineexperiences that are not mobile-friendly.

Percent of Retailers That Are Mobile-Ready

All the best for every one to watch the trend of mobile commerce trendsand ROI’s of Next year.

ROI