mCommerce: Where Are We Now?

Mobile commerce continues to grow at a fast pace. eMarketer estimates that mobile commerce or mCommerce will generate $41.68 billion of the total $262.3 billion of ecommerce sales for 2013 or an increase of 68.2% from 2012 and account for 16% of total ecommerce sales.

1 in 6 dollars purchased on a mobile device is fantastic. But there is still a long way to go, especially when you realize that ecommerce comprises less than 10% of total retail sales. But the good news is ecommerce is growing 5x faster than traditional retail channels and mobile commerce is growing 3x as fast as ecommerce as a whole.

Source: eMarketer
Source: eMarketer

All of this growth in mobile payments is happening in spite of the fact that NFC has gone absolutely nowhere. Some argue that Apple’s refusal to integrate NFC has effectively killed it, but I have said a number of times that NFC is a technology looking for a solution to fulfill. As a payment method it provides virtually no benefit over traditional credit cards and that is the essential reason why it has failed. And while all the posturing from the Android community is that the Android OS supports NFC, the number of Android devices shipping today that actually do is quite small (only 29 devices according to Google) relative to the millions of devices shipping every month. In fact NFC’s struggling status recently led Google to remove the NFC requirement from Google Wallet.

A Change in Consumer Behavior Will Enable the Next Phase of Growth

Mobile commerce is benefiting from an evolution in consumer behavior as well as improvements in technology. Increasingly consumers are shopping across multiple devices – desktops, smartphones and tablets – beginning searches on one device and continuing on another and perhaps completing the transaction on a third.

Further consumers are getting more comfortable using mobile devices for payment via everyday activities, particularly buying coffee (I love my Starbucks app). These repetitive purchases replacing top-up cards with mobile apps not only paves the way for larger transactions, but provides brands more and more information about their customers which has the potential to enable brands to generate more relevant offers and increase long-term customer value.

Also even when they’re not paying with their own mobile devices, increasingly consumers are using their credit cards with merchants who use mobile-point-of-sale solutions like Square which furthers consumer comfort with mobile payment solutions.

But new technologies are coming on that are really exciting for mobile commerce.  One in particular is Apple’s iBeacon which uses Bluetooth LE (low energy) to let retailers sense and communicate (e.g. send offers) with compatible devices within 50 meters. All of the promise of proximity marketing may finally come to fruition. The best thing is that iBeacon devices are very inexpensive (< $50), can be loaded with all sorts of sensors, positioned almost anywhere in a store, hotel or airport and will operate for 2 years on a single coin battery. And lastly they operate really well indoors where GPS signals are less successful.

Besides Apple, Major League Baseball and American Eagle Outfitters are committed to using iBeacon. PayPal, already a leader in mobile commerce has also introduced their own version called PayPal Beacon. This is definitely a technology that is worth experimenting with if you are looking to enhance your mobile marketing and mobile commerce potential in retail operations.

Are You Ready?

So all directions point to mobile playing a primary role in mobile commerce. But for many companies, the path isn’t clear. And most companies who have begun mobile initiatives are only focused on the consumer-facing aspects – the apps, the mobile optimized websites. But few have looked at how they will use mobile to empower their employees, to create new services/revenue opportunities, to increase operational efficiency.

What have you done? Please share your thoughts in the comments.

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Phono Image610 239 8100