Mobile commerce, also called m-commerce, includes any monetary transaction conducted through a mobile device, such as a cell phone or tablet.
It is an evolution of e-commerce, allowing people to buy and sell goods or services virtually anywhere, simply by using a cell phone or tablet.
But mobile commerce is not just an evolution of e-commerce.
It has also been a driver for new industries and services or helped existing ones to grow, such as
- Mobile money transfers.
- Electronic ticketing and boarding passes.
- Purchase and delivery of digital content.
- Mobile banking.
- Contactless and in-app payments.
- Location-based services.
- Mobile marketing, coupons and loyalty cards.
Different types of m-commerce
Although mobile commerce encompasses a wide variety of transactions, all can be classified into one of three types:
Similar to e-commerce, but accessible through iPhone or Android. Mobile shopping is now possible through mobile-optimized websites, dedicated shopping apps, and even social media platforms.
Mobile banking is not much different from online banking, although some types of transactions may be limited or restricted on mobile devices. Mobile banking usually involves a dedicated app, although some banks have begun experimenting with the use of chatbots and messaging apps.
Mobile payment options are so varied that we have chosen to cover them in detail in this article.
As an entrepreneur and BigCommerce user, your exposure to and interest in mobile commerce will primarily be in purchasing and payments, which are the subject of the rest of this article.
Common benefits of mobile commerce
Until not too long ago, creating mobile apps and moving to mobile-friendly platforms might have been an option only for large companies such as Amazon and Walmart, but as the costs of mobile decrease, more and more companies are able to reap the benefits.
Whether you are large or small business, read on to discover some of the key benefits of mobile commerce and how it can help you scale your business.
Improved overall customer experience
The advent of e-commerce has already brought a huge improvement in the way people shop. With the ability to shop from their desktop computer instead of walking into a store, shoppers could access a wider range of products, quickly compare prices, and buy from the comfort of home.
Today, however, shoppers can still do all these things, but they don’t even need a desktop computer-the phone in their pocket is enough.
Moreover, the very nature of mobile commerce means that it has some capabilities that are simply not found in e-commerce:
- Mobility: although desktops are portable, it is unlikely that a shopper will always have a laptop computer at hand. But since most people never leave home without a smartphone, mobile commerce makes online shopping much more convenient.
- Reachability: with the ability to send push notifications to customers via SMS, online retailers can reach more customers even when they are on the go.
- Location tracking: E-commerce apps and online stores can locate users using GPS and Wi-Fi technology, helping to deliver personalized, location-specific content.
Phenomenal growth potential
Although mobile commerce already has a large user base, the industry’s growth shows no signs of slowing down.
By 2021, mobile e-commerce sales are expected to account for 6 percent of all retail sales in the United States. But by 2025, Statista predicts that mobile commerce sales will account for more than 10 percent of all retail sales in the United States, up 7 percentage points from 2018.
A true omnichannel experience
Omnichannel commerce means selling both in-store and online across multiple channels-on your e-commerce site, Amazon, eBay, Instagram, etc.-to create a seamless experience and a cohesive brand message across all touchpoints.
Above all, creating an omnichannel experience means meeting customers where they are and making it easy for them to buy.
Therefore, mobile devices are the ideal medium for omnichannel commerce, as most customers always have their smartphone at hand.
Variety of payment options
To further facilitate the checkout process, new mobile payment solutions have opened the door to a variety of payment options, such as Apple Pay, PayPal One-Touch, Visa Checkout and Amazon Pay.
Many e-commerce sites now offer one-click checkout, allowing customers to enter their payment details once and then use the one-click option every time they make a purchase.
Disadvantages of mobile commerce
Constant need for optimization
Although mobile commerce is growing, we cannot forget that desktop is still important. In fact, desktop still has many advantages over mobile.
However, the reason for this is probably the difference in screen size rather than mobile, considering that tablets had a 3.8% conversion rate, while other devices with smaller screens (e.g., smartwatches) had a rate of only 0.1%.
In addition, desktop devices are far ahead of mobile in terms of order value. Statista found that, in 2019, smartphones accounted for 64% of visits to retail websites globally, but generated only 46% of e-commerce revenue, a value equal to that of desktop devices.
Therefore, there is a clear need to optimize mobile commerce.
As consumer behavior continues to change, you will need to stay on top of the latest technologies and applications to ensure that your online store is not only mobile-friendly, but also fast, convenient and easy to navigate.
Variety of payment methods
Customers in different regions often prefer some payment options over others, making it more complex for online retailers to run their business on a global scale.
One might think that offering more payment options simplifies the mobile experience, but sometimes less is more.
In fact, a 2000 study revealed that offering too many product options often leads to decreased sales and customer satisfaction.
For this reason, you’ll need to find the right mix of payment options for your business sector and the locations you serve. It may seem difficult at first, but as you gather data about your customers and understand their preferences, you will be able to evaluate which payment options work best for you.
Making it easy for customers to compare prices
One of the pitfalls of simplifying the mobile user experience is that it makes it easy for customers to quickly compare prices between stores. In a few clicks, customers can find out how much a similar product costs in your store and ten others, and will often search until they find the cheapest product for the greatest value.
How can you combat this situation? Like your customers, you are aware of how you compare to your competitors. Pay attention to when competitors lower or raise prices, as well as shipping costs, and be prepared to react.
According to a Forrester study, 30% of smartphone users say they don’t make online purchases via their mobile device because they don’t feel safe using mobile payment services and 14% say they fear their phone information will be sold to third parties.
Therefore, when customers give permission to access their data via mobile devices, e-commerce companies have a greater responsibility to protect their personal data and manage it well.
You will need to comply with a wider range of regulations, but also be transparent with your customers about how you use collect and share their information.