In researching for this piece, I spent a lot time reading past articles about Mobile Commerce. Each of them making grand claims that “2003 will be the year of Mobile Commerce!”, or “2004 has arrived and Mobile Commerce has landed!”, or “Seriously, 2006 is here and M-Commerce will be huge!”, or “We really mean it in 2007!”
Never mind whether the article dated back to 2003, 2004, 2005…you get the idea. Every year there are claims that mainstream Mobile Commerce has arrived.
Now it’s 2010 and while I won’t make a claim as bold as that, it’s apparent that mobile commerce is becoming more accepted by consumers. Sales have increased steadily more than 50% year year over year, and raking in 750 million in 2009. 2010 will easily break the 1 billion dollar mark.
So while it’s not technically a mainstream concept yet, now is a great time to educate yourself because the shift to M-Commerce will not be ushered in by any new year. It will be a gradual progression that continues to pick up steam until it simple becomes a standard part of your business model.
Who’s doing it now?
The big players, or early M-Commerce adopters are the retail giants like Amazon.com, Wal-Mart and Target. Each have finely tuned Mobile sites and applications geared towards putting the mobile shopping experience into the hands of it’s customers.
The smaller guys are sitting on the sidelines, observing and plotting an M-Commerce strategy of their own.
I don’t blame them. Mobile applications must be developed in multiple formats. Web based sites need to be tested on a large variety of devices. Security, how to share zong balance privacy and PCI compliance are all issues. The cost associated with this creates a barrier between smaller business and their mobile commerce efforts. There’s nothing wrong with waiting patiently. After all, for a majority of businesses, a Mobile Commerce solution isn’t really something that is being demanded by your customers. Yet.
What do we already buy on phones?
What are the things we currently buy on our Mobile Phones? These are small, simple purchases, often relating directly to our phones. Things like ring tones, music, games and apps. These are items of instant gratification. Quick, small purchases that you can make use of moments later. For me, a lot of these are equivalent to impulse buys. They are items I can buy for a dollar or two and have instant access to. If I have buyer’s remorse a few minutes later, it’s no big deal – I’m only out a couple bucks.
This instant gratification mindset is gradually expanding into purchases of “Near-Instant” Gratification items. Probably not things you would consider major purchases.
How about ordering a movie ticket on your way to the show or booking a hotel as you drive through a vacationing city? These are all enticing options. They purchases of convenience.
What about bigger ticket items?
The market is young. Early M-Commerce adopters will buy higher priced items such as electronics and jewelry. While this is not yet the norm, things are quickly moving that way and we probably are not all that far off from true mainstream Mobile Commerce acceptance. Make no mistake that soon, it will be a requirement for your customers to purchase from you in this fashion. If you’re a retailer, you will be expected to cater to all of your customers: those who walk into your physical store (if you have one) and those looking to purchase from a computer or mobile device.
So what’s the hold up?
What are the things that are holding us back? People are afraid of technology they don’t firmly understand. This reminds me of E-Commerce in the late 90’s. People (hi mom!) were afraid of this new concept of purchasing goods and services directly online, as they just didn’t trust the technology. This apprehension has all but vanished in traditional E-Commerce and M-Commerce will soon follow suit.
Privacy & Security
Many users are concerned that buying goods and services using their mobile phone will put them at risk of security breaches. Many are worried about having their device stolen or falling victim to a scam. If these wary users can be offered some assurance, M-Commerce will really start to take off.
The tide already seems to be shifting, as 26% of mobile users feel that shopping through their phone is as safe as traditional E-Commerce. Consumers are becoming more comfortable making purchases online, and just as they did with traditional E-Commerce, people will adopt over time.
Mobile Payment Services are an alternative payment method – already very popular in Asia and Europe. These services allow mobile phones to pay for a range or services or goods without using cash, check or credit cards.
Combined market for all types of mobile payments is expected to reach more than $60B globally by 2013.
Facebook is beginning to establish a presence in the mobile payment arena, through a partnership with Zong.
Another mobile payment service, Boku, has already launched within several social networks.
MasterCard will be launching MoneySend, a money transfer service that allows cardholders to transfer money from one MasterCard to another via Mobile Phone.