M-commerce or mobile commerce is the ability of a business to carry out commercial transactions using a mobile device, such as a smartphone and personal digital assistants.
In simpler terms, M-commerce development and E-commerce together constitute a wireless web of digital technology. It is estimated that the growth of M-commerce will rise at a rate of 25.5% CAGR i.e., compound annual growth rate, making it one of the powerful revenue-generating strategies for businesses worldwide.
History of M-Commerce
Wireless eCommerce first came into being after the nomenclature of M-commerce by Kevin Duffey in 1997 during the launch of Global Mobile Commerce Forum. The concept was first adopted by Coca-Cola as the company installed a mobile phone vending machine.
In Helinski these vending machines brought huge reforms as they accepted payment with text messages. The idea of M-commerce development was further enlarged by Radiolinja, the brand which sold ringtones with the help of SMS features available in the mobiles. After that, this technology expanded far and wide.
It is estimated that mobile users spend 18 billion hours a year browsing shopping applications. Almost all of the electronic transactions were authenticated digitally, first, it was SMS and now it is slowly inclining towards the use of messengers as a part of social media applications.
Rise of M-Commerce
After the launch of mobile commerce in London, 1997, more than 100 companies joined the forum of mobile commerce. This sector never faced negligence and saw some swift development after the year of 1997.
In the early 2000s, reservations and ticketing systems used this technology for sending ticket confirmation on mobile phones. By 2021, it is approximated that the world’s collective M-commerce sales will be accountable for more than 53.9% of the total sales generated from various e-commerce platforms.
The rise of smartphones and digital technology opened new doors for M-commerce. Several industries and governmental agencies have initiated different strategies based on conceptualizing mobile commerce trade. Wallet pay balances and transactions are one of the innovative accomplishments of M-commerce.
Most of the business organizations dealing with digital technology have shaped their model based on the concept of M-commerce and other business process transformations are on its way. The global share of M-commerce in the eCommerce industry is expected to touch 72.9% by the end of 2021.
Features of Mobile Commerce
The mobile commerce share of the entire eCommerce industry on a worldwide level is 59% and is expected to rise further. Mobile commerce has been gaining popularity after the registered impressive growth of mobile phone usage.
Although digital technology has already influenced business processes, M-commerce development paved a new way for the brands looking after innovative and adaptive technologies. Some beneficial features of M-commerce platforms are as follows:
It denotes that M-commerce can be availed for carrying out a large number of transactions. Users of this platform can carry out various transactions independent of the current geographical locations of the respective users.
2. Instant Authentication
The mobile devices needed for supporting M-commerce platforms functions with the help of an electronic chip known as a SIM card. The SIM cards are easily identifiable with the internet accessible mobile phones.
Therefore, authentication is instant and convenient in these platforms. 67% of the global population owns mobile devices in 2019 and these mobile devices can simply authorize M-commerce platforms through SIM card prompts.
3. Prioritizing Services
The universality and instant authentication of immediate services help M-commerce platforms to enable prioritizing services. The users can perform urgent tasks conveniently with priority scheduling.
4. Demographic Integration
Users can opt for different services related to GPS and location from the platform.
This localization feature enables users to sell products and services to their customers accessing their geographical location. It enhances the demographic integration of businesses for growth and expansion.
M-commerce is capable of providing instant and real-time availability of different registered services of the business. It helps them in market analysis and data interpretation for different customers.
It is found that almost 87% of the shoppers engage in online product search before making an actual purchase. Therefore, being available online makes the buying process faster.
6. Connectivity Accordance
M-commerce helps the users to enjoy the benefits of different third party authentications, such as GPS and GPRS based location services. It helps businesses for establishing their presence over geotagging.
7. Customized Services
Mobile commerce provides its users with the flexibility of personalizing their services as per requirement. M-commerce can be availed to offer location-based services specific to different contexts.
8. Improving Efficiency
Mobile commerce improves the efficiency of the work process and in turn, business productivity also increases.
79% of smartphone users have made an online purchase using M-commerce applications in their mobile devices, thereby enhancing the revenue-generating capabilities of these platforms.
Utilities of Mobile Commerce Development
The inter-dependency on the micro-moments have increased the number of smartphone and mobile phone users. This high usage of internet-based technology in smartphone devices has significantly increased e-retailing businesses and revenue generated from mobile commerce.
There are different benefits of incorporating mobile commerce development into business processes:
1. Prompt Loading
The M-commerce revenue is expected to reach $3 trillion by 2021 globally. This is because of the prompt loading properties of mobile applications. The mobile applications are faster to load than most of the mobile versions of websites.
Therefore, mobile applications are readily accepted by users for browsing commercial websites. The mobile commerce platforms are readily accessible from smartphones and there is no need to transfer data from the servers while navigating through different links present within the applications.
The M-commerce platforms provide similar outlook and functionality as original websites accessed from desktop, consumers are more likely to use mobile applications.
2. Convenient Purchasing Options
Mobile-based applications are the major contribution of M-commerce development and these applications enable the users to access different commercial websites over a smartphone.
The Android and Ios platforms of operating systems support featuring a variety of mobile applications for online shopping. The versatility of these applications with easy navigation options makes the shopping process more engaging and easy.
Shoppers enjoy purchasing articles from mobile applications with easy access to a smartphone rather than using a desktop for the same. These applications help the users to easily browse through the products and add them instantly to their virtual shopping cart for purchasing.
3. Enhancing Customer Experience
Customer experience is a prime concern and the biggest opportunity for major online retailers. In 2019, the traffic share for mobile applications was 53.29% more than their original business site.
By careful consideration of marketing principles and sales techniques, a brand can excel in providing the best customer service and thereby making them stand out from the competition. M-commerce applications can be customized for making it more user-friendly and convenient for usage.
The users of mobile applications can easily navigate through different catalogs of the product portfolio, add products to the wishlist for future purchases, and easy checkout with products being added to the cart.
Shoppers can share their experience over social media and ask suggestions about the products and services from previous users, and share their purchases with acquaintances.
4. Customized Notifications
Traditional marketing channels propagated different ways of sending an email communication to their customers. This email marketing methodologies have been criticized greatly because of spamming inboxes.
On the other hand, the modern marketing method suggested brands to opt for email subscriptions and mobile notifications. Mobile applications of different e-commerce platforms utilize this feature and ask the permission of the user to share emails and newsletters in their inbox and push notifications in their smartphones.
Push notifications are unobtrusive but these instant messages create a sense of urgency in buyers for quickly browsing through the applications for the latest offers and new launches.
5. Personalized Content
M-commerce development can be integrated with different third party location providers to access the geolocation of the users. Therefore, mobile-based applications can access the location of the users with their permission and suggest personalized content.
The content is suggested to the users based on the data analytics feature of M-commerce and customized according to the interests, social media profiles, items viewed, purchase history, and products added to the wishlist.
All this information can help the brands to suggest more engaging content that is based on the gathered data about a customer. These small gestures create a big impact in the minds of customers. It enhances brand worth and improves brand value in the market.
6. Reliable Payment Options
The most innovative concept of M-commerce applications is their flexibility towards online payment. Almost all of the major e-commerce platforms nowadays provide third party authentication from different commercial and private banks along with the mobile wallet payment.
Almost all the major e-commerce giants have come up with their wallet, where they provide different facilities to their customers when transactions are made from those mobile commerce wallets.
This is a very functional and helpful feature for users accessing online retail stores through M-commerce platforms. The revenue generated with only mobile wallets was $75 billion in 2016, which is estimated to grow to $500 billion at the end of 2020 and 80% more in the upcoming five years.
7. Data Analysis and Interpretation
Business prosperity is based on the best practices of knowing their target customers. Customer information needed for marketing strategies can be easily fetched through M-commerce applications, wherein the brands can access the location, age group, buying preference, interests, social media profiling, and shopping trends of a large customer base.
By accessing all these valuable information about the registered users, a business can understand consumer behavior and buying preferences. It helps the content management of the application by suggesting product recommendations and customized services based on this data.
8. Comprehensive Marketing Strategies
With an e-commerce website launching a mobile application for its users, their profitability increases rapidly because of lowering the marketing costs. The marketing strategies can be majorly focussed on online through the M-commerce platform.
Brands can more readily connect with their target audience with the help of the application and in turn, it decreases the marketing costs largely.
M-commerce development enables businesses to increase their social media handles with these applications and all the marketing communications can be made on these profiles to make it more visible to their audience. Social media posts help to engage users and track their feedback conveniently.
9. Driving Traffic to Business Site
In the in-store shopper’s survey, it is found that 71% of them think that their online research on M-commerce platforms is driving their in-store experiences. The M-commerce platform can be facilitated for providing the geolocation of different brick-and-mortar stores available to nearby customers.
It is estimated that 88% of the consumers who conduct an online search for a local store will reach out to that business within 24 hours.
M-commerce applications enable businesses to access different features such as gyroscope, accelerometer, scanner, camera, GPS and geolocation for driving traffic from the mobile application to the original business website or brick-and-mortar stores of the business.
This facility of driving users to their nearby stores has made M-commerce platform one of the most prospective revenue generation models.
Advantages of Mobile Commerce for Business
M-commerce development has unfolded various opportunities in the scope of digital technology. Following are the advantages of incorporating M-commerce for businesses:
- Business transactions and mercantile activities have become convenient to carry on with the help of M-commerce. Users of mobile-based online retailers can conveniently shop online and make digital payments.
- The opportunities of this platform are wide as mobile-based applications that can be accessed by the majority of the world’s population. The market size is huge for mobile commerce as the number of smartphone users is increasing day-by-day.
- M-commerce supports businesses to carry out market research and analysis for segmenting, targeting, and positioning of the customers based on real-time data.
- Mobile commerce is an excellent marketing tool that involves very low cost and investments. Marketers can postulate mobile-based banners, videos, and other engaging posts for marketing their brands online on the applications.
- The business process workflow improves as the operations get streamlined while using the mobile application. The stock maintenance, inventory management, and payment transactions are simplified by the technology of mobile commerce.
M-commerce platform utilizes the versatility of wireless technology or WAP for mobile applications, merchandising of products and services, exchange of information, and financial transactions. M-commerce is very utilitarian and productive for businesses, especially for e-commerce platforms or online retail stores.