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Monday, April 11, 2011

What is M-commerce?

Mobile phone commerce
Digital commerce is gaining retail market share as phone distribution rises

M-commerce or mobile commerce is a form of digital commerce that advertises and markets to users of mobile technology rather than traditional e-commerce or electronic commerce methods. As mobile device operating systems and networks evolve, their functionality has enabled multiple applications that can also offer business services. This m-commerce service platform is a digital venue for businesses seeking another way to access consumers.

Mobile phones are available to individuals at times where desktop and laptop computers are not. Not advertising to existing and potential clients via m-commerce represents a loss of market access in a market that is increasing in size.  Global Business Insights, a business intelligence firm, identifies four key areas in which m-commerce holds high potential; banking, gaming, travel and retail. Mashable, an Information Technology news reporting firm has also identified banking as an m-commerce trend in addition to ticketing, and retail shopping.



Markets available through m-commerce vary by nation according to the Wireless Center. For example, in Japan, 77 percent of Internet enabled mobile users make use of email via their mobile hand-held devices whereas in North America, that number is 27 percent.  The numbers for North American mobile device users in terms of mobile banking, mobile retail and mobile games are 6 percent, 3 percent and 7 percent respectively according to the wireless center. These percentages may seem small, but if the number of mobile of Internet enabled mobile phones is in the millions, which it is, the market is sizable and growing.

Market observers of m-commerce have pointed out a few obstacles exist to the successful integration of m-commerce with mobile phone use. Specifically, these obstacles include things like screen size, memory limitations,  limited interface, and infrastructure.  It is evident with the transition to newer generations of mobile phone technology that these obstacles are being addressed one by one. For example, touch screen mobile phones can increase the speed of use over push button phones.

Developments that enable improved m-commerce include open source mobile phone operating systems have led to assimilation of new mobile software applications. Additionally, both mobile hardware and infrastructure has advanced enough to allow mobile global positioning (GPS), video streaming, music downloads, and access to information services. Mobilethinking, an m-commerce marketing consulting firm has quoted Morgan Stanley as estimating by 2014, 74% of North America will have access to 3G or 3rd generation mobile technology. This serves as an indicator of where the market will be spending more time regardless of the generation of mobile technology.

In terms of sales via m-commerce, additional factors apply. For example, what mobile service providers give clients the best access to mobile Internet, and which mobile handset operating systems have the most market exposure and potential.When developing an m-commerce campaign it is a good idea to first identify if one's business services are suited for m-commerce and how cost effectively an m-commerce sales effort is likely to provide a positive rate of return in one to five years.  

To illustrate further, if a business provides retail goods, would an investment in a Symbian OS compatible shopping interface be worth it? For those businesses at the leading edge of mobile trends such as banking, the decision is easier, but for other businesses that have to compete for limited mobile time and space, obtaining revenue via m-commerce points to higher marketing innovation and lower cost advertising integration.

Sources:

1. http://bit.ly/dpumqt (Global Business Insights)
2. http://bit.ly/bPtg47 (Wireless Center)
3. http://bit.ly/da739F (Mashable)
4. http://bit.ly/cjMfPW (Bowels)
5. http://bit.ly/a2f9uU (Mobilethinking)

Image license: Jason Howie, CC BY 2.0