Tactics > m-commerce


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Tackling the challenges of m-commerce


By Ernie Schell


Thinking of implementing m-commerce functionality?


Consider this first: I


n the last year or two, mobile commerce, or m-commerce, has carved a substantial niche for itself in the multichannel marketplace. Combined with social-media platforms like Facebook, Twitter, and YouTube,


it has contributed to the widely held perception that sales and marketing “channels” are giving way to a variety of “touchpoints” instead. Regardless of which survey you look at,


the trend is unmistakable. According to ForeSee Results, for example, a third of the 1,200 respondents in its recent poll used a smartphone to access a retailer’s website to compare prices or products. Online marketplace eBay reported a 300 percent increase in m-commerce sales during the fourth quarter of last year. Web Spiders predicts that by 2014, half of all mobile phone subscribers worldwide will be buying physical or digital goods on their mobile phones, accounting for $630 billion in sales (£391 billion).


More than sales As noted, though, consumers are using their phones for more than just sales. Half of them are using them to help make shopping decisions, even on old-style “feature phones”, according to a new survey by Arc Worldwide. Arc’s research results suggest that as many as eighty percent of feature-phone users are consulting their phones for the purpose of making or getting ready to make a purchase. Some shoppers, of course, are heavy phone


users who love to experiment with new apps. More casual users tend to see their mobiles as a stripped-down version of a computer. While many marketers are focusing on the former, Molly Garris, digital strategist at Arc, says that


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casual users will remain the majority for some time.


There’s no way around catering to both


groups. Plus, in-store barcode scanning is a growing part of the mobile phenomenon. ScanBuy, a mobile barcode solution provider, estimates that 30 to 40 percent of all smartphone users have downloaded a barcode- scanning app. Scanning isn’t just limited to the old one- dimensional barcode anymore, either. Two- dimensional barcodes like quick response (QR) codes or high-capacity colour barcodes (HCCB) can encapsulate a lot more data—most often a URL or web address—in a compact space, and when scanned with a smartphone can then automatically display the encoded website and even dial your mobile to connect you to the merchant’s call centre.


Further studies Other studies confirm the trend. A study by IBM showed that 40 percent of consumers want to check prices with their mobiles, while half want to use a smartphone to avoid queues in-store. Sterling Commerce, now a division of IBM,


did a survey along with ecommerce platform vendor Demandware that found that 60 percent of consumers use their phones for shopping lists and two-thirds want to purchase items using their smartphones or use them to make purchases in a store. The ForeSee Results survey also found the following: • 56 percent used their smartphones to look up prices


• 46 percent used them to compare products • 45 percent reviewed product specifications • 27 percent read product reviews on their phones


And of course smartphones can be used to send coupons—redeemable by having the store clerk scan a barcode displayed on the phone at checkout; manage loyalty rewards, promotional rewards, and contest rewards; or to support general marketing initiatives such as special offers on selected items, even those generated on-the-spot based on in-store behaviour. Shopkick does all that and more. This iPhone application or app pays consumers kickbucks—reward coupons—just for checking in when they enter stores of participating


Direct Commerce Catalogue e-business www.catalog-biz.com


retailers. Additional kickbucks are available for performing particular actions, such as scanning a poster on a store’s dressing room wall with the iPhone camera. Kickbucks can be redeemed for gift cards


and donations to charitable causes. Moreover, when shoppers show their iPhones running Shopkick to the cashier, they receive instant discounts. MVouchers, introduced in March by First


Data, a payment processor, store a prepaid value, funded by merchants, that can be delivered to customers’ mobiles as coupons; loyalty, promotional, or contest rewards; or for other promotional purposes, with redemption online or in a store via a mobile device displaying a text message, a 2-D barcode for scanning at the till, and ultimately through contactless exchange using Near Field Communication technology (popularised by the Bump app on the iPhone for exchanging personal profiles).


Committing to the platform Merchants have two main ways to approach m-commerce, which are not mutually exclusive, so some merchants are pursuing both. One is to create specialised applications or


apps, like Shopkick, that run independently on a smartphone and which can display all or some of the marketer’s merchandise as well as support a shopping basket. The other method is to create an entirely different version of the ecommerce website that has been optimised for the smartphone interface. Which one is better? A survey by Adobe


Systems found that two-thirds of shoppers who used their phones preferred shopping via a mobile-optimised website compared to using an app. But Han-Shen Yuan, director of platform business solutions and mobile engineering for eBay, notes that “we’ve actively diverted millions of users from our mobile website m.ebay. com to our iPhone, Android and BlackBerry apps. However, mobile web revenue growth is increasing at the same pace as our mobile app business. Therefore, it is important to have a mobile strategy that includes both mobile sites and apps”. While the adoption rate in m-commerce


on both the part of the consumers and the merchants is truly remarkable, the downside to this is that security issues have not had a chance to be thoroughly identified, let alone


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