Mobile commerce is transforming into a multi-billion dollar industry. With all the advancements made in the realm of mobile technology, online retailers are looking for a way to move in.
There’s a very high chance you’ve participated in mobile commerce already. But what is it exactly? Is it the same as e-commerce?
Read on to find out.
What is mobile commerce?
Mobile commerce is also known as mobile e-commerce, m-commerce, or mobile shopping. It is the buying and selling of products through a mobile device.
As more people connect through mobile devices, businesses increasingly use them for sales transactions. These commonly comprise retail sales and payments, financial services, travel booking, and entertainment ticketing.
Mobile commerce goes beyond buying and selling. The technique also includes receiving alerts about offers and promotions, accessing coupons, and participating in loyalty programs.
Mobile commerce vs. E-commerce
E-commerce is the sales exchange of products and services through electronic systems. E-commerce is a subset of e-business, the broader term for all business activities conducted electronically.
Along with e-commerce, e-business also covers other aspects like marketing, sales, logistics, and manufacturing.
Mobile commerce can be considered a subcategory of e-commerce. Mobile commerce, however, refers exclusively to using mobile devices and phones for purchasing.
Advantages of mobile commerce
Let’s take a look at the top benefits of mobile commerce:
Personalized customer experience
Mobile commerce allows businesses to create customized experiences for each visitor based on location and interests.
It also helps to connect with customers who visit a company’s website but don’t buy anything due to hesitancy or lack of information.
Mobile commerce caters to these people by allowing companies to create informational content about their products. Algorithms will then target the customers most likely to purchase.
Using technology to recommend goods based on browsing history, everyone gets matched to the product they need.
Easier store access
Mobile commerce has made it easier than ever for users to find and buy products from their phones and tablets. With mobile commerce, brands can sell from anywhere and anytime.
Aside from looking through products, customers can also pay easier through mobile commerce. It’s common nowadays to access your banking and financial information through your phone, making it even more convenient to shop online.
New opportunities for marketing
Mobile devices are ideal for real-time marketing because their owners always have them on hand. Plus, with geo-targeting, companies can send offers based on customer location.
Some marketing methods that have flourished through mobile commerce include:
- SMS campaigns
- Email campaigns
- In-app advertising
- Social media marketing
Lower costs, higher productivity
Mobile commerce helps you cut costs by reducing the number of staff needed to run your store. You also save money by eliminating traditional inventory and storage costs associated with a brick-and-mortar location.
And because mobile commerce lets customers complete their purchases from anywhere, you won’t need to worry about staffing issues or meeting customer demand during peak hours.
Mobile commerce frees up capital to expand other business areas, like marketing and advertising, by removing the need for physical stores.
Insightful data analytics
By nature of being online, mobile commerce provides access to valuable data that can be used to make informed business decisions.
By tracking customer activity, businesses gain insight into purchasing trends and behavioral patterns on a wide scale. The result is more effective targeting of customers using relevant offers and promotions.
This increases customer satisfaction and loyalty while reducing campaign costs.
Disadvantages of mobile commerce
Now let’s examine the other side of the coin by listing the drawbacks of mobile commerce:
Connectivity issues
One of the biggest downsides of mobile commerce is that it relies heavily on connectivity. If a customer’s phone doesn’t have a data connection or Wi-Fi access, it’s a no-go for online shopping.
This becomes a greater problem when buying more expensive items that require real-time information. This also becomes a problem if your business requires a download during buying.
Data privacy concerns
One of the biggest concerns with mobile commerce is data privacy. Many users worry about having their information stolen if they make purchases through mobile devices.
The most relevant aspect of this concern is that mobile devices are always connected to the Internet. Mobile commerce, unfortunately, provides another door for third parties to collect and use personal information without your consent.
There are solutions to this, of course. Some websites have offered secure payment services that make it impossible for hackers to steal customer data from their servers.
Increased fraud risk
Following on from the data privacy concerns, mobile commerce also brings new opportunities for fraudsters to commit identity theft. While this is a risk associated with other forms of e-commerce, it tends to be more difficult to detect with mobile commerce.
This goes the other way as well. Mobile commerce can let criminals make fraudulent purchases, leading to increased chargebacks and financial losses for online merchants.
Implementing an effective fraud detection system for mobile commerce is crucial so companies can identify suspicious activity before it becomes an issue.
Lesser contact with customers
A significant disadvantage of mobile commerce is that it limits your ability to interact with customers.
In a traditional brick-and-mortar store, owners can speak with customers, ask them questions, and provide physical, personalized service.
There’s no opportunity for this type of interaction when conducting mobile commerce online. The closest alternatives are live chat features, but they’re not quite the same.
A downside is customers may unintentionally feel they’re not being heard or taken seriously by the company. This can be solved by taking steps to improve customer service.
Strong competition
Mobile commerce is one of the fastest-growing areas of e-commerce and, therefore, one of its most competitive.
Hundreds of apps are out there, and many large companies have already built mobile commerce and online shopping experiences. It’s a substantial challenge for startups to overcome by themselves.
Is mobile commerce worth the investment?
We’ll say it still definitely is. Mobile commerce is a concept that will keep growing and growing, which means it’s a market that will see plenty of action from businesses in the coming years.
Companies have no reason to miss out on a growing consumer sector. Starting with mobile commerce could help you establish a strong foundation for your business.
