Chapter IX – What Is M-Commerce?

According to a recent report from Oracle, “daily mobile Web access to commerce sites was up 300 percent year over year”¹.

Besides, more shoppers will access the internet via mobile devices than via computers by the year 2014. Nevertheless, mobile devices already changed retailing. 73% of shoppers admit to have used mobile phones in-store, while 64% of smartphone owners use their phone to shop online². By 2015, worldwide m-commerce is estimated to grow to $670 billion³.

But what exactly is m-commerce?

In this chapter we define mobile commerce and present a simple six-step process for building a long-term mobile strategy.

What is m-commerce?

Mobile commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device.“⁴

Mobile devices in turn, may include mobile phones, PDAs, smartphones, or any other mobile technology with access to computer networks. In contrast to e-commerce, m-commerce does not include laptops and computers.

Mobile commerce can be based on two technologies:

a) Mobile sites which “appear inside the browser on any internet-enabled mobile device“¹

b) Mobile applications which “require a device-specific download from a marketplace, such as the Apple App Store or the Android Market“¹

Although by definition mobile commerce involves a transaction, mobile devices have the potential to engage shoppers early on along the path to purchase. Mobile marketing is becoming increasingly important to both retailers and manufacturers for its importance to digital shopper marketing.

Some of the most common forms of mobile marketing can be classified into three categories:

1) Location-based

2) Enhanced product information

3) Competitions

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How to execute m-commerce

Oracle proposes in its 2012 white paper a six-step process for building a long-term mobile strategy¹.

First, define the purpose of your mobile strategy. How does it help to improve shoppers’ experience? Does it complement your strategy in other channels? What do you want to achieve with your mobile strategy?

Second, determine if mobile sites or mobile applications are best suited for your strategy. Whereas mobile sites can be accessed by 99% of mobile devices and do not require a download, mobile apps provide enhanced functionality such as location-based services for example. Ask yourself: Where, when and how do your shoppers engage with the mobile content?

Retailer apps have both a greater likelihood of adoption and more opportunity compared to a branded app”⁵. Hence, manufacturers should carefully consider teaming up with third-party apps or retailer apps in order to save resources while ensuring exposure to shoppers. Nevertheless, mobile-optimized websites (websites which can be accessed from a mobile device) are a must for both retailers and manufacturers. But instead of merely replicating a website, a company should rather consider what matters to shoppers on-the-go and in-store and adapt the content accordingly.

Third, prioritize devices. Find out what platforms your target audience is using. According to Oracle‘s report, the iPhone is the safest device as “iPhone users have the highest level of online engagement among users (…) and are also the most likely to pay for their applications.“¹

Fourth, determine if you want to own the mobile site or application or if you would rather outsource the technology. In its report, Oracle presents four possible approaches ranging from “Engage a mobile service provider” to “Create and use homegrown solutions“. Companies should carefully evaluate pros and cons of each alternative before arriving at a decision.

Fifth, determine which web technology you can leverage to your mobile strategy. The report argues that “(i)f you have a Website, you can and should leverage its core technologies (e-commerce platform, merchandising tools, content management system (CMS) user reviews, product information) in the mobile channel.“¹

Sixth, you should develop both a short-term and a long-term strategy for your mobile commerce. Funds and corporate commitment might be insufficient at first to allow for a holistic mobile strategy. Instead, it has to grow steadily while constantly delivering positive results to the management.

shoppernewsblog argues for including a seventh step “Measure and evaluate“. Companies should use the information collected to constantly improve its approach. Furthermore, insights gained from m-commerce should be communicated to the entire corporation as they provide valuable insights into a company’s shopper behavior.

For more information, please consult our post “How To Execute & Measure Digital Shopper Marketing“.

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Conclusion

Most articles on m-commerce argue for solution-based approaches to mobile strategy. Shoppers are overwhelmed by the sheer amount of mobile sites and applications available to them. Only the ones which standout by solving concrete problems can differentiate themselves and will get noticed. Simply bombarding shoppers with intrusive marketing messages is insufficient in our modern retail environment.

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In Chapter X we introtruce best practices for mobile commerce to offer our readers a better understanding of the opportunities available to retailers and FMCG.

Moreover, we will present best practices from companies using mobile commerce to further engage their shoppers.

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Click here for the complete table of content

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Did you find this chapter helpful?

Please share your opinion with us by commenting on this post.

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Sources:

¹ http://www.oracle.com/us/products/applications/web-commerce/steps-for-building-mobile-strategy-1504996.pdf

² http://www.digby.com/mobile-industry-resources/mobile-industry-statistics/

³ http://juniperresearch.com/viewpressrelease.php?pr=250

http://en.wikipedia.org/wiki/Mobile_commerce#cite_note-0

http://www.shoppermarketingmag.com/2012-02/

http://www.smartinsights.com/mobile-marketing/mobile-marketing-strategy/mobile-commerc-strategy/

http://www.wisegeek.com/what-is-m-commerce.htm

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