A networking perspective on the growing mobile commerce landscape
Overview
In 2006, 73 percent of Americans reported cell phone ownership (Madden, 2006) By 2012 there were some six billion mobile subscriptions globally (mobiThinking, 2012) — nearly as many cell phones as there are people on Earth (World Bank). This dramatic increase in just a half decade is predicted to continue with the expansion of mobile networks in developing regions such as the African continent, Brazil and rural China.
Mobile commerce accounted for 11 percent of retail sales in the U.S. in 2012, and that share is expected to reach 15 percent in 2013 with tablet driving a large portion of those m-commerce transactions (eMarketer, 2013). eMarketer (2013) also predicts that U.S. consumers will spend $24 billion via tablets, and this is forecasted to double by 2015, while smartphone m-commerce will have slower growth with total sales reaching $13.44 billion in 2013, and $24.32 billion by 2016.
WiFi and Cellular Networks
Fueling the m-commerce trend is access to the Internet through a variety of mobile data services. The more recent generations provide increased data throughput with less congestion for the mobile carrier. Cellular infrastructure continues to expand and innovate, but is still challenged by the strong growth in device ownership. WiFi is a viable option for shifting traffic and easing cellular bandwidth utilization. Free public WiFi is an attractive selling point to bring in new residents, increase occupancy rates for underutilized commercial real estate and drive greater revenues for retailers and local tax authorities. Additionally, local governments offering citywide public WiFi perceive it as a means to providing firefighters, law enforcement and public safety officials with easy, cost effective access to data services.
The city of Mountain View, California, for example, provides free public WiFi to mobile subscribers within the city limits (City of Mountain View). The initiative was sponsored by Google, which also pays the city an annual rental fee for the use of city streetlight poles to mount wireless transmitters. Resident response has been quite favorable and, in addition to a 10 fold increase in data throughput, Google is able to gather valuable marketing data about how subscribers use the network. Additionally, the homepage for the wireless network is set to the Google homepage, thus increasing opportunities for online advertising income for Google to offset the significant investment in deploying the public WiFi network.
Looking Forward
Overall, consumers are expected to use their smartphones and tablets to complete $37.44 billion in retail purchases in 2013, which is a 37 percent increase from the 2012 total of $23.72 billion (Boris, 2013). The travel industry alone estimates $26 billion in travel and leisure bookings will happen on smartphone and tablet devices in 2014, which will account for one in five travel dollars — three times more than in 2012 (Onbile, 2013).
Bypassing the mobile app marketplace means firms can opt to reduce their development efforts on apps without sacrificing their ability to reach highly engaged mobile consumers. But more mobile adoption, especially smartphones, brings with it more rich content transmission over already challenged cellular networks. Consumers want fast speeds, but they also want to know their information is secure. Responsive design, 4G networks, biometrics and virtual wallets offer viable solutions to address these competing objectives. Retail firms and cellular service providers alike must be ready to address these needs with cutting edge data speeds, full-service mobile Internet engagement and secure platforms that build trust and persuade consumers to complete m-commerce transactions.
There is still much work to be done in both the technology and user experience design domains. Even though 30 percent of mobile web users in 2012 booked or bought travel products in 2012, for example, 54 percent of smartphone users and 61 percent of tablet users overall said they find mobile websites ineffective and difficult to use (Mashable, 2011). In fact, 63 percent of users would be unlikely to buy from a company again, even through non-mobile channels, if they had a negative m-commerce experience including, but not limited to, long forms to complete, lack of zoom functionality and designs that are esoteric and hard to decipher (Nodes, 2012).
Even with these challenges, whether the engagement metric is making a purchase, sharing content or watching a video, users are more likely to engage with sites on mobile compared to desktop. For retailers, this increases the need to ensure they are optimizing their sites and e-commerce options for mobile devices. As responsive design, mobile security and virtual wallet options innovate and mature, this will increase trust with a population that continues to respond well to mobile web experiences, and thus increase opportunities for businesses to convert more mobile Internet visitors to m-commerce customers.
Article References
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