Why are we Talking About Mobile Commerce?
Mobile commerce isn’t the future – it’s the now. These days, consumers are ditching their desktops to make online purchases from their smartphones.
The current pandemic and lockdown orders are having a huge effect. As of April 21st, 2020, there’s been a 146% increase in online retail orders compared to last year, with 72% of consumers using a mobile device to shop online this year.
This article will guide you through the world of ‘mcommerce’, explaining the different types of mobile commerce, its benefits and disadvantages to businesses, and the various ways mobile devices can help you make money online and offline.
Before we dial into the details of mobile commerce, however, let’s first discuss the basics…
Also known as mcommerce, mobile commerce is the use of mobile devices – such as smartphones and tablets – for buying and selling products and services. Mcommerce is a strand of ecommerce, bringing with it new digital services like mobile money transfers, e-tickets, mobile banking, and mobile contactless payments.
Mcommerce is categorized into three main types of transactions: mobile shopping, banking, and payments.
This is ecommerce via a mobile device. Mobile shopping is carried out through mobile optimized websites, social media sites such as Facebook or Instagram that allow in-app purchases, and dedicated ecommerce apps such as ASOS.
Typically carried out on a banking app designed by your banking institution, mobile banking is very similar to online banking. However, some transactions are limited or restricted when attempted on a mobile device.
This enables users to make in-person purchases using a mobile device. This type of mobile transaction has proven the most widespread among consumers and, as a result, there are now many mobile payment options available – these include mobile wallets, mobile transfers, and in-app payments. We’ll cover these three payment-types in more detail further down the article.
Mobile Commerce Pros
Below are the main benefits that mobile commerce could bring to your business. They’re pretty cool if you ask us!
Convenient for users
As a whole, ecommerce has turned shopping into a seamless task, allowing consumers to compare and purchase a wide variety of products at competitive prices, without leaving their front door.
With mobile commerce, you don’t even need a desktop computer. As long as you have a mobile device, you can shop ‘till you drop from anywhere you like.
To enhance the user’s mobile experience even further, some retailers have introduced customer support chatbots to provide quick answers.
Exponential growth potential
These predictions can be translated into one action: get your business mobile-ready! There’s currently a big gap between the number of mobile searches and percentage of mobile sales, so by providing a good mobile experience, you can close this gap and push your business ahead of the competition.
Offers a truly omnichannel experience
Omnichannel selling is about your business being omnipresent, allowing your customers to buy what they want, when they want – and, most appropriately to omnichannel selling, where they want.
For your customers, an omnichannel experience involves a seamless transition between making purchases online and offline. More specifically, through an omnichannel experience, the brand messaging and buying process will be seamlessly integrated whether you’re selling from your brick-and-mortar store, social media page, online store, or online marketplace.
Mcommerce enables you to create new campaigns and execute multi-channel strategies more easily. For example, via mcommerce, you can display your products wherever your customers are spending most of their time – whether it’s on Instagram, Twitter, or another platform – which is becoming known as contextual commerce.
Large variety of payment options
Mobile commerce has made it quicker and easier for users to buy online, particularly through in-app purchases where consumers can tap, tap, pay.
Mcommerce has also brought around such speedy buying with its variety of payment options, including Visa Checkout, Amazon Pay, and digital wallets like Apple Pay, which all allow you to finalize a purchase faster than you can say ‘how much?’.
Target your content at the right people, at the right time
Smartphones come with geo-tracking technology built-in, and you can even have your company’s app track the consumer’s location (as long as the user consents!)
Using programmatic advertising – the app’s algorithms that send ‘push’ notifications to the user based on the user’s location or time of day – your app can send notifications or suggest products at certain times or locations, which should increase the likelihood of the user completing a purchase.
With geo-tracking and push notifications, you could send personalized promotions to users on their lunch break, or encourage them to download your travel guide for the city they’re now in. The possibilities are endless.
Mobile Commerce Cons
Just like your cell phone signal bars inside a tunnel, what goes up must come down. Here are some drawbacks to mobile commerce…
Requires regular updates and optimizations
Best practices for web design and ecommerce are always changing. To keep the mobile side of your business ahead of the curve, you’ll need to be aware of the latest technological advances and web design trends when it comes to running your mobile site.
Why? Because if there’s one thing that consumers dislike, it’s sluggish mobile sites. 79% of web shoppers who encounter site performance issues say they won’t buy from that site again.
Varying payment options across the globe
With such a wide variety of payment options available through mobile commerce, you’ll find it hard to satisfy consumers from different markets around the world. For instance, some countries don’t even use mobile wallets at all, while other international consumers will prefer one payment option over another.
To give you an idea of the sheer variety of payment options that you’ll need to deal with across the world, check out our diagram below, displaying popular online payment methods used in China, India, the Netherlands, Portugal, Germany, and the USA. How many logos do you recognize?
The most popular digital wallets in the USA include Apple, Samsung, and Android Pay, but the most widely used e-wallet in China is Alipay. So, when figuring out how to accept payments online abroad, you’ll soon learn that you can’t please everybody.
Shifting your focus from ecommerce to mcommerce is a wise business move, but you won’t be the only business to do so. As more and more consumers are turning to mcommerce, businesses are following suit. This means you’ll likely face stiff competition in the mobile commerce space, unless you find a niche market or provide a truly outstanding mobile experience for your users.
Increased risk of fraud
The risk of marketing fraud (e.g. ‘click spam’ – when fraudsters generate fake clicks on your PPC (pay-per-click) ads, which costs your business money) on mobile is quite high, given there are fewer cyber security measures on smartphones than on regular desktop servers.
If you notice that the click-through-rate (CTR) for your adverts is increasing, but your sales figures are decreasing, then you are likely being affected by fraudulent activity.
As we mentioned earlier, there are three types of mobile commerce: mobile banking, shopping, and payments. We’ll now discuss the last of these in more detail. Mobile commerce offers consumers many different ways to pay, and below are the three main methods: mobile wallets, contactless payments, and closed-loop payments, as well as two other less common methods.
1. Mobile wallets
Also known as digital wallets, mobile wallets have a similar function to their faux-leather counterparts – you can store your credit card details securely inside, and use the wallet to make online payments.
However, the main advantage to mobile wallets is that you don’t need to fiddle around on your tiny screen to enter your card information each time you pay online – all the information is stored inside your mobile wallet, ready to go. This benefit has proved popular among consumers, with mobile wallet payments predicted to become the second most common payment method by 2022, after debit cards.
We spoke with Ivo Gueorguiev, co-founder of Paynetics, who firmly believes mobile commerce is taking over the payments industry:
Mobile payments is a massive opportunity for businesses. They must take advantage of [mcommerce] in order to meet changing consumer expectations and increased demand.
In China, digital wallets now dominate the payments space. Together, Alipay and WeChat Pay facilitate more than 90% of all digital transactions in the country, representing over 60% of all online sales.
Contactless Mobile Payments
Mobile wallets can be used in-store to make contactless payments, too. Rather than taking out your card and tapping the terminal, all you have to do is bring your phone close to the card terminal to complete the transaction. Of course, the terminal needs to support contactless payments.
Mobile wallets that support contactless payments include:
- Apple Pay
- Samsung Pay
- Google Pay
Closed Loop Mobile Payments
Closed loop payments allow customers to make purchases from a single company through a mobile app. These types of payments are the same as mobile wallets, but they are dedicated to one brand.
Used primarily in the retail and restaurant industries, mobile apps featuring closed loop payments allow brands to gather invaluable information from customers, such as purchasing behavior.
Capturing information on buying behavior allows brands to send personalized content to each consumer in the future. Closed loop mobile payments also offer a seamless shopping experience, which can help to improve customer loyalty.
Some of the most widely used closed loop mobile payments include:
- Walmart Pay
- Tim Hortons
Consumers can add their card details to the closed loop payment app, and then make purchases online in the same manner that digital wallets allow you to do.
Mobile Point-of-Sale (POS)
Also known as mPOS, mobile POS is used via small credit card readers connected to a tablet or smartphone, offering businesses a more flexible way of accepting payments. To be considered mPOS, the system must also be cloud-based, meaning the information is backed up and stored automatically without using a traditional internet connection.
mPOS is ideal for pop-up stores and home repair services that need to accept payments on the go. Some mPOS solutions, including Square, are able to integrate with your ecommerce system, such as Shopify, so you can seamlessly connect your physical and online store wherever you’d like to sell.
Once available only on dedicated banking apps, person-to-person money transfers can now be completed via numerous apps, including Facebook Messenger, TransferWise, Venmo, Zelle, and many more. To use money transfer apps, all you have to do is enter your bank card details, then send and receive money from your family or friends – as long as they also own the app.
How can your business perfect its mobile commerce, and keep customers coming for more? There are four ways you can optimize your business for mcommerce:
Go for mobile-first web design
Typically, businesses will first design a website and then optimize for mobile using mobile responsive templates. If you’re serious about tapping into the growing trend of mcommerce (it’s predicted that consumers will download 258 billion apps in 2022), then you’ll need to flip that over.
So, when discussing your plans with your web designer, you should consider designing your website for mobile first, and then optimizing for desktop to create a seamless experience for mobile consumers – who are overtaking desktop users in droves.
If you’re using one of the best website builders, such as Wix, then you’ll find that they offer mobile responsive templates already, so you don’t need to worry about optimizing your website for mobile.
Improve your page speed
Consumers don’t like waiting around. Seriously. According to research by Akamai, a 100-millisecond delay in load time can cause conversion rates to drop by 7%, and a full second of page loading time can decrease conversion rates by 70%.
With so many consumers now using mobile devices instead of desktops, it’s critical that you create a quick-loading mobile website to keep your customers happy and your sales margins healthy. There are a number of ways you can increase your loading speeds, including:
- Reduce the size and number of image files – too many images, as well as those that are too large, are some of the most common causes of slow websites. Use tools like TinyPNG to reduce the file size of your images, while retaining the image quality. Or, simply remove some images if you have too many on your mobile website.
- Run tests – Google has a number of tools, such as PageSpeed Insights and Test My Site, that will audit your chosen URL and suggest ways to improve your page loading speed.
Consider creating an app
We say ‘consider’, because it’s not always a beneficial step for some businesses. Studies show that 23% of all apps are used only once, but 39% are used 11 times or more. Whether your mobile app falls by the wayside like the 23% depends on how much you’re willing to invest in it.
Do you have enough resources to update, scale, and maintain your app quickly and easily? With the average business building over 10 apps per year, are you willing to keep up with the competition? If the answer is no, then you should avoid creating an app and damaging your brand image, at least for now.
However, building a slick mobile app that provides value to consumers could do wonders for your business. Also, don’t forget that by 2022, consumers will download 258 billion apps – and yours could be one of them.
Mobile commerce is growing in popularity. But how will it transform the way we pay in the future?
Mobile ecommerce is set to become extremely personalized, and will become increasingly integrated with image-search tools.
One such image-recognition tool is Google Lens, enabling users to run a Google search with images rather than written text – or as Google describes it: ‘search what you see’. Image search is starting to take off, hand-in-hand with mobile commerce.
Luke Sartain, CEO of the UK’s largest SEO agency, UpUgo, believes that mobile commerce and image-recognition technology will become more entwined, and will transform the way consumers find products online:
Mcommerce will push the boundaries of personalization further than we’ve ever seen before. After having spoken to the team behind the Google Lens, it’s clear that image recognition will play a major part in the future of mcommerce, and it will be fully integrated with social marketing.
For example, if you upload a photo of yourself wearing a branded sweatshirt, you should expect to see a similar product on your social media newsfeed within minutes.
There are over 600 million image searches through Pinterest’s image-search tool, Pinterest Lens, but only 8% of businesses are accommodating for image search in their digital marketing strategies. Our tip? Get involved with the mcommerce/image-search takeover before your competitors do.
These days, consumers are using mobile devices to search and buy products online. Before we know it, desktops could be a thing of the past. That’s why your business should now be focusing firmly on mobile.
Cash is being exchanged for mobile payments, mobile Google searches outrank desktop, and mobile app downloads are soaring astronomically.
Mobile commerce also provides many benefits for business, creating an enjoyable ecommerce experience for consumers and allowing your business to accept more types of online payments than ever before. Mobile commerce is calling. It’s time to pick up.