Beyond the iPhone App: Seizing Today’s M-Commerce Opportunities

Mobile truly has created an “always on society,” where people are online and accessible 24 hours per day. Mobile platforms have become more than simple communications devices; they are lifestyle assistants that enable people to connect, interact, inform and influence.

Because of this, they are also an incredibly valuable piece of the commerce puzzle — no other channel provides such a direct and persistent connection to customers, partners, prospects and suppliers.

However, mobile commerce is one of the most overhyped and least understood disciplines in commerce. Thanks to most mobile commerce initiatives today being either stand-alone efforts or “bolted on” technology to existing e-commerce platforms, mobile commerce is limited as a stand-alone function.

For example, an iPhone application that shows simple product information and pricing is of limited use unless it includes some sort of mechanism to drive customers to a store or online where they can purchase the product. It is of no use whatsoever to the majority of customers who own BlackBerry devices, Android handsets and other non-iOS platforms.

This is not to say there is anything wrong with iPhone applications that show product information and pricing — it simply illustrates that such an application does not a mobile commerce strategy make.

However, the use of mobile barcodes, text-messaging and location-based services designed to drive customers to both bricks-and-mortar and online destinations will increase revenue. Cross-platform applications designed specifically for customers, partners and suppliers will streamline operations and grow transaction volume across all mobile handset users.

When fully integrated both on a technical and strategic level, these types of initiatives improve existing processes by effectively delivering information and incentives across the “always on” mobile channel.

The Evolution of Mobile Commerce

Mobile commerce first gained notoriety more than 10 years ago when Coca-Cola rolled out dispensing machines in Finland that could accept payment via SMS text message. In recent times, the most common initiatives have been mobile-optimized websites and iPhone applications.

This evolution mirrors the evolution of the Internet as a commerce platform in the 1990s. Initially, “super portals” like America Online provided a controlled gateway to the online world, just like iPhone applications and mobile service-provider home pages do today.First-generation websites were little more than static product catalogs, just like most mobile-optimized websites are today.

Over time, the world came to grips with the interactive power of the Internet, and it ultimately subsumed the entire commerce landscape. As part of this trend, customers have come to expect a consistent experience across all channels. They expect the products and pricing they see online to be the products and pricing they find in the store (unless, of course, there are specials running “online only” or “in-store only”).

They expect the contact center to have a complete view of their relationship across all channels. And they expect efficient product delivery and returns processing, regardless of whether they ordered the product online, at the store, or over the phone.

Because of this trend, mobile must be fully integrated, both technically and strategically, with the greater commerce ecosystem. The mobile channel can only achieve its full potential if it is consistent with, and complementary to, other channels.

In some cases, the mobile channel could be counterproductive if it is not in sync with the commerce ecosystem — frustrating customers with inaccurate or out-of-date information, and impairing efficiency and transaction volume by creating channel conflicts.

Unlocking Mobile’s Potential

Mobile commerce remains at a relatively embryonic stage of development, marred in part by the “Three Great Myths of Mobile”:

  • Mobile commerce technology is too expensive to deploy.
  • It is too difficult to support all of today’s mobile platforms.
  • Mobile commerce requires a separate infrastructure and staff to drive business value.

In fact, there is a vast array of opportunities to drive business value today with mobile, without incurring undue expense or complexity. Some of the opportunities include the following:

  • Mobile Barcodes: Mobile barcodes are a powerful way to integrate mobile and in-store initiatives to drive in-store transactions. For example, by retailers enabling mobile barcode functionality, customers can use the camera in their mobile phone to snap a picture of a barcode, which then brings up a special landing page for that product or group of products. This can provide customers with instant product and pricing information and create opportunities for cross- or up-selling. These same capabilities would also provide the ability to generate coupons or vouchers that encourage impulse buying in the store.
  • Location-Based Services: Also providing ways to drive in-store sales, mobile store-locator applications can guide customers to the nearest store, or the nearest store that has a specific product in inventory, and also provide coupons for use in the store.
  • In-Store Shopping Applications: Mobile devices can become “virtual salespeople” by providing applications that enable customers to check product availability (both in-store and online), compare prices with other outlets and access reliable product information. (Enabling price comparisons with other outlets seems counterintuitive, but it actually is beneficial because it helps keep the customer in the store to negotiate pricing rather than having them leave to investigate pricing elsewhere.)
  • Multichannel Engagement: Mobile can become the first point of contact with a potential customer, who can then be transferred to other online or offline channels. For example, a coupon could be used as an incentive to download a mobile application, with the coupon redeemable at the online or offline store. Mobile is also an excellent channel for customer updates. SMS messages, email or automated phone calls can be used to notify customers of product availability or special promotions, driving them to online and offline stores, and providing them with vouchers while in-store to encourage impulse buying.
  • Closing the Sale: Actual mobile transactions have been slow to evolve since those initial Coca-Cola machine rollouts, due primarily to technical and security considerations. Most of those issues have been overcome today, making mobile a suitable mechanism for capturing customer information and executing transactions.

The Time Is Now

Internet commerce in the 1990s was an exercise in trial and error for most enterprises, simply because it was a brand new discipline. Many mistakes were made along the way — exemplified by the collapse of the dot-com bubble in 2000.

Mobile commerce is at a similar evolutionary stage as early Internet commerce. However, there is no need to engage in trial and error. The lessons learned from Internet commerce make it relatively easy to understand how mobile commerce needs to be integrated with existing enterprise e-commerce platforms as part of the overall commerce strategy, ensuring that mobile content is consistent with content on other channels.

Today’s mobile infrastructure has leapfrogged mobile commerce strategy, and mobile platform capabilities are progressing rapidly with the continuing proliferation of smartphones, powerful mobile browsers and faster cellular networks.

For this reason, mobile commerce must evolve beyond its current “super portal/iPhone app” phase of development. The time has come for mobile to become a rich, multifunction commerce platform that drives traffic, sales and efficiency.

Carsten Thoma is the COO of Hybris and president of Hybris U.S.

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