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Ebook | 20 minute read
Mobile commerce is taking over the retail world, and keeping up with the trend is essential. Discover the latest updates and strategies for mobile commerce here.
In the U.S. economy alone, mobile commerce revenue rose from $431.4 billion to 511.8 billion from 2022-2023. . The upward trend is still growing faster than ever, with projections landing near 700 billion in mobile commerce revenue in 2025. So, if you’re not paying attention to how people shop, your brand will be left behind.
Mobile Commerce, or mCommerce, is the buying and selling goods and services through a wireless device such as a smartphone, tablet, or laptop. People want to shop, pay bills, or access information. And they want to do it now from anywhere. In just two years, mobile commerce sales are expected to hit the $700 billion mark. Yes, those numbers are right according to the data predictions, showing mobile commerce is no fad.
A keyword to note when talking about mCommerce upfront is omnichannel. You must give the shopper or user the ability, flexibility, and confidence to start or finish a transaction any way they choose; whether that looks like an optimized site accessed from a laptop or a dedicated mobile shopping app from a smartphone. The experience must be seamless.
Gone are the days of a desktop computer to transact daily life. Managing your finances, buying groceries on an app, or having the ability to pay without swiping a card through a digital wallet are under the mobile commerce umbrella. In fact, mobile commerce falls into three distinct categories or pillars:
Think of mobile commerce as the catalyst in the ever-evolving journey of eCommerce or as an essential player. mCommerce solutions are the fuel of eCommerce, providing the groundwork for advancement and more robust products and services. Here are just a few ways mobile commerce influences eCommerce:
Our story begins with primitive computer networks dating back to the 1960s and Electronic Data Interchange (EDI), where documents could be shared across business machines. EDI was further developed by the military for intelligence purposes.
Fast forward to the 1980s, with the introduction of CompuServe – one of the first major service providers of message boards and chat rooms, (known as one of the Big 3 information services) and the advent of the Electronic Mall. In 1991, the National Science Foundation officially opened the floodgates by lifting commercial internet use bans.
eCommerce was born. Early adopters like Amazon, Dell, Hewlett Packard, and eBay entered the space and the rest is history.
When it comes to mCommerce advancements, many believe the first app was the Nokia 6110’s built-in arcade game Snake first introduced in 1997. However as far back as 1983 the founders of Apple envisioned a rudimentary application store.
Around 2007, we see the first app store launched along with the release of the iPhone with upwards of 500 applications. As smartphones gained in popularity and release so did new app clients such as Google Play.
Retail behemoth Amazon launched its app store in 2011 across 200 countries. As recently as 2018, Amazon rigorously invested in its dedicated mobile shopping app, improving experience across mobile devices, such as focusing on single-hand usability specifically for a smartphone. As it stands today, Amazon customers can shop and ship over 45 million products globally, across five languages, and within 25 currencies.
It’s also worth noting that many first-iteration app stores offered paid and free apps, where the concepts of premium and “freemium” content entered the zeitgeist and still exist today.
A few more notable points about the birth of eCommerce and the emergence of mobile commerce technology as we experience it today:
Elastic Path is a Visionary in Headless Commerce by Gartner. Talk to an eCommerce Expert here at Elastic Path and see how we can help craft your Headless Commerce strategy.
What are the foundations of mobile commerce? As we briefly introduced earlier:
Mobile Shopping – the overall buying of goods and services online via a mobile device. As mobile shoppers gain in numbers, vendors invest in site optimization and dedicated apps to win the trust of mobile users.
Mobile Banking – usually involving a dedicated app, mobile banking is like online banking with some limitations on a mobile device. With growing numbers of mobile customers, there is an expectation to pay bills, check balances, make deposits, and transfer funds wholly from a wireless device.
Mobile Payments – a broad range of transactions fall into this category, from shopping to bill pay.
Think of this pillar as a more of a wide, far-reaching net. In the vast world of eCommerce transactions in the trillions, mobile users are in different buying or service journeys; retailers function in B2C, B2B, and other environments and sell to a broad base. You’ve got customers paying bills, buying for the home, buying for their business, or buying for someone else’s business. It’s important to note the complexities and the volume of the mobile payment category.
Now a bit more detail into each category…
Mobile shopping refers to the act of purchasing goods or services online using a mobile device such as a smartphone or tablet. With the rise of eCommerce and the widespread use of mobile devices, mobile shopping has become increasingly popular in recent years. It offers numerous benefits such as convenience, flexibility, and accessibility, allowing consumers to shop anytime and anywhere.
From a brick-and-mortar, to a desktop computer, to a handheld device, shopping has come a long way in an alarmingly short time. In record numbers, smartphone and tablet users demand more ways to shop in less time with an intuitive experience to meet all their needs. With more than half of internet traffic shopping from a mobile device, it’s crucial retailers pay attention to the mobile shopping experience.
And what does that mean? Understanding your customer’s needs and pain points throughout the mobile commerce journey, wherever they are. A few key terms when evaluating a site’s performance, look, and feel:
With smartphones dominating the mobile commerce landscape, the app has become essential to the shopping experience. Converting at a much higher rate than web, businesses must now develop apps to stay competitive in the market. Shopping app usage rose globally mid-2021 with Android users clocking in at 2 billion hours per week. While this number is arguably influenced by the COVID pandemic, research supports that mobile app shopping overwhelmingly leads the pack and will continue that trajectory.
Mobile banking, also known as online banking, refers to the practice of performing banking transactions through a mobile device such as a smartphone or tablet. Mobile banking allows users to check their account balances, transfer funds, pay bills, and even deposit checks without having to visit a physical bank branch.
Transacting at the speed of business
With 7 out of 10 consumers using a mobile device to manage their bank account in the last month, mobile banking is another eCommerce hero. A few breakout stars in this category include:
Mobile payment is the use of a mobile device to make transactions for goods or services. This technology has revolutionized the way we pay for things, allowing us to buy products and services from virtually anywhere, at any time. Through mobile payment platforms, users can securely store their credit card or bank account information on their device, making transactions quick, easy, and convenient.
Digital Wallets: Say Goodbye to Cards & Cash
The digital wallet, or e-wallet, is one mobile payment option to watch. It allows electronic transfers through digital currency units, a linked bank account, or in some applications, individuals store their driver's license or ID information for credentialing purposes.
These applications allow you to pay individuals or a business for goods and services through linked financial information for one click transactions. They’ve gained popularity for their ease of use and speed, especially for personal transactions among family and friends for shared expenses or events, as in the case of CashApp or Venmo.
Here is where Near Field Communication (NFC) comes into play. A user’s credentials or payment information can be wirelessly identified by a retailer’s terminal without a physical card swipe. Besides contactless payment with apps like Apple or Samsung Pay, other examples of NFC include access control such as parking garages or ticketed venue entry.
Drawbacks to the digital wallet include geography limitations and security risks, but here are a few advantages to bear in mind:
Biometric Authentication: Futuristic to Reality
Many mobile users already use biometrics like a fingerprint to unlock a phone, now comes the next wave of facial and voice recognition to unlock digital wallets. More mobile consumers are finding greater peace-of-mind with this type of payment security and companies are seeking the investment.
A recent study indicates by 2024, biometric authentication is expected to increase by 1000% - to the tune of nearly $2.5 trillion in transactions.
Flexible Payment: More Ways to Pay, Your Way
A third and final call out in the world of mobile payments are flexible payment options. Many online retailers are responding to increased cart abandonment rates and budgeting needs among consumers. For bigger ticket items like furniture and exercise equipment, retailers offer a zero-interest installment loan at the point of sale to incentivize the purchase.
Now that we’ve explored specific features and influences, let’s take a higher view of the actual benefits of mobile commerce.
Mobile commerce benefits vary on who you talk to, but here are advantages worth noting:
In this case, more is better. More products, more services, and more content to inform buying decisions. More opportunity for customer insight to enhance overall experience.
As with any revolution comes adaptation hurdles and workarounds. Let’s look at a few common mobile commerce challenges:
Now let’s shift gears to examine the look and feel of mobile commerce, specifically the importance of metrics and UX Design.
So, what goes into building a better mobile commerce experience? First, metrics.
Google user experience metrics set the industry standard for high-performance web design. Users expect a swift, responsive experience from device to device. Three metrics drive the quality of a site’s design and performance - and dramatically affect the mobile commerce experience.
The terms UX and UI design entered business vernacular around 1995, and refer to User Experience and User Interface, respectively. These principles of design are based in ergonomics, and ultimately involve improving a customer’s interaction with a product. Let’s dive deeper into how each function and how the roles truly complement each other…
UX is about pleasing the customer from start to finish. Research, development, and testing are conducted to optimize the customer’s journey. Visual design, usability, and interactive design components are examined at this stage.
UX Design considers business goals: does this product interaction align with mission and vision? Is the experience enjoyable? Useful? Are there pain points along the way? User Experience in Practice A UX designer is trained to look for interface efficiencies and target each step of a customer’s journey with a product. Let’s say a customer is on a retail eyeglass site browsing frames from a mobile device like a tablet. A UX Designer reviews the components of the experience as a whole and asks:
On the User Interface side of the coin, designers typically have more creative backgrounds, but must balance that with following rules as to what the customer ultimately wants.
The visual must be aesthetically pleasing, but the interaction must be what the user expects. UI Designers conduct research into competitors’ brands and how users interact with them. In the same eyeglass example as above, a UI Designer may ask themselves these questions:
The shared goal between UX and UI is the customer experience, however, the approach, tools, and required skill sets differ.
The UX approach is more analysis and project-management-based, while the UI side takes a more creative role with visual elements based on the UX recommendation. There is no chicken or egg equivalency between the two; while UX precedes UI, both disciplines are considered equal and necessary.
Here are a few more side-by-side comparisons:
UX/UI considerations are driving more mobile commerce success stories. It’s a value add and a must-have for anyone transacting goods and services online. As customers move to even greater heights of mCommerce connectivity, the experience must be flawless.
As you’ve read through this guide to gain valuable insight into mobile commerce, we encourage you to look at your own shopping habits; how many times over a week, even a day, are you using a mobile device to shop? Pay a bill? From the grocery delivery to the gas bill, airline tickets, and dinner you split with friends, how many of these transactions do you complete on a mobile app without thinking about it? And what are the elements that bring you back to the same experience time and time again?
In the rapidly evolving mobile commerce world, how will businesses differentiate? By giving users an experience, they’ve never had before with a brand.
Who will consistently win? In a 2020 article, Alice Wong, from mobile payment leader PayPal, shared further insights from a study of global eCommerce merchants. Here’s what she found: