5 Facts About Mobile Commerce

September 7, 2011 by Heather McIlvaine

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Everything you need to know about mobile commerce (image: Sybase)

1.      It’s a global trend.

Mobile commerce consists of two categories: mobile financial services and mobile CRM. Due to limited payment methods and limited access to the internet, emerging economies tend to use mostly mobile payment and money transfer services. Developed economies, on the other hand, tend to embrace mobile banking services as an entry point into mobile financial services.

Here are two examples that illustrate global adoption of mobile commerce. Since it launched in Kenya in 2007, M-PESA, a mobile payment service offered by Safaricom, a Vodafone affiliate, has 13 million registered users and handles mobile transactions valued at $400 million each month.

ABI Research estimates that North American sales of physical goods purchased via a mobile device exceeded $1 billion in 2010. That is a 33 percent increase over its 2009 forecast of $750 million.

A report by Juniper Research predicts that mobile payments will reach $600 billion globally before 2013. Some regions, though, are more mobile than others. In a 2010 survey, the Asia-Pacific region consistently ranked ahead of EMEA and the Americas in reported use of mobile communities, mobile banking, vouchers and coupons sent to a phone, and other mobile commerce services.

2.      It’s catching on across industries.

Mobile commerce services make it possible for people to perform everyday financial transactions, like paying for parking, from their mobile phone. People who previously had no access to financial services are able to save money, send money between family members, and pay merchants for goods and services with their mobile phone.

Industries outside of the financial sector have also been integrating mobile commerce. Utilities companies update customers on their consumption and enable them to pay bills. Restaurants, hotels, and cinemas provide mobile reservation and booking services.

The retail industry makes use of end-to-end mobile commerce services: from mobile marketing and awareness campaigns, to mobile loyalty programs, vouchers, and surveys, to mobile point-of-sale technology.

A 2010 survey by Sybase makes clear that customers are willing to purchase services that deliver added value, such as official emergency alerts or special offers and coupons from a favorite retailer.

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3. It’s all about delivering new value

4. It’s important to choose the right channel

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“Nimble campaigns” combine mobile marketing and time and location information (image: Sybase)

 

3.      It’s about delivering new value to customers.

Companies should have two things in mind when deciding how to implement mobile commerce: how will this service deliver new value to my customers, and how will this service be profitable for my company?

Here are some examples: A global manufacturer of baby products uses mobile services to encourage brand loyalty. When customers buy a package of diapers, they receive a short code to send in by phone. This code not only gives the customers points toward a voucher for more products, but it also sets them up in a “new parent” group, where they can share tips and connect with other new parents.

Smartphones in particular provide an opportunity to integrate mobile marketing and time and location information to conduct targeted “nimble campaigns.” For example, a restaurant can send out vouchers for a lunch deal precisely at 11:30. Or a retailer can send out specific offers to customers based on their location.

4.      It’s important to choose the right channel.

Companies need to think carefully about which mobile channels they should use to offer mobile services. The main mobile channels are: mobile app, mobile web, USSD, and SMS.

First and foremost, companies should take customer preferences into account. Do most of your customers have smartphones or feature phones? Does your region support the communication infrastructure necessary for an app or website? Many businesses end up using a combination of mobile channels, or start with SMS and then add an app or website over time.

Currently, USSD and SMS are the most popular mobile commerce channels because every phone supports them. As smartphones become more prevalent, however, experts expect more mobile commerce services to be conducted through mobile apps and websites.

Even in the US, SMS reaches about 70 percent of mobile phone users, according to Aaron Maxwell, founder of Mobile Web Up and expert panelist in a mobile commerce forum that took place in May 2011. In comparison, a mobile website reaches 35-40 percent, an iPhone app reaches 7 percent, and an Android app reaches 8 percent.

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5. It’s available at SAP


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Sybase 365 Mobile Services provide companies with an end-to-end mobile commerce solution (screenshot: SAP)

5.      It’s available at SAP.

SAP provides end-to-end mobile commerce solutions through Sybase 365 Mobile Services.  Many of these solutions are mentioned throughout the Mobile Commerce Guide 2011. Here, we give you the full list:

  • For transactions: mBanking; mPayment; mTopUp; mRemittance
  • For engagement: mCRM
  • For analytics: Data management; Analytics and reporting
  • For marketing: Messaging services; Subscription services; Advertising services

For more information on how Sybase 365 Mobile Services work, check out this video.

Go here to download a free copy or to request a print copy of the Mobile Commerce Guide 2011.

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