While online shopping remains popular among consumers, businesses are constantly innovating their technology to find new ways to provide the best customer experience. The latest trend that many companies have found success in is mobile commerce.
According to a Pew Research Center study, 96% of Americans own a personal cellphone. This creates an opportunity for businesses to develop a direct link to consumers, regardless of whether they have an online or physical store.
Mobile commerce allows buyers to purchase goods and services from their mobile devices from anywhere, at any time. This retail approach enables companies to bring a constant stream of new content and products directly to mobile users.
However, there are several different types of mobile commerce, each with its own advantages and disadvantages. Therefore, businesses must be sure to consider all implications before delving into a mobile commerce project.
Mobile commerce (mCommerce) refers to the browsing, purchasing, and selling of products and services through mobile devices, such as smartphones and tablets. mCommerce includes individual retailers and digital marketplace apps, including Amazon. It also involves digital wallets, such as Apple Pay, and mobile banking apps, which help facilitate spending.
This retail approach allows consumers to purchase online goods from anywhere at any time, without needing access to a desktop computer. A study by the Pew Research center found that 8 out of 10 Americans shop on their mobile devices. This means businesses that only utilize eCommerce and physical platforms are missing out on potential sales.
mCommerce is not only convenient for shoppers on the go but enables businesses to sell online and deliver content to consumers faster as well. By increasing their exposure, retailers can boost impulse buys and overall sales. In 2017 alone, mCommerce accounted for nearly 35% of all e-commerce sales, and emerging trends indicate there is no slowing down. In fact, mCommerce is projected to outgrow non-mobile retail methods by 2021.
While there are many different types of mobile apps that mCommerce encompasses, the three main categories include-
- Mobile Shopping
- Mobile Banking
- Mobile Payments
Outside of traditional payment processing, companies need to weigh mobile payment options to determine which best suits their e-commerce customers. Some brands have found that carefully choosing the correct payment solution can significantly impact sales.
Power Support disclosed that they experienced a 26% increase in orders within two weeks after implementing Amazon Pay. Therefore, management should understand what each type of mobile payment entails before selecting a solution.
1. Digital Wallets
Digital, or mobile, wallets allow consumers to store their credit and debit card numbers and shipping addresses on their devices to streamline transactions. This eliminates the need to re-enter the information for every online purchase, which can be tricky when using a mobile phone.
While there are several mobile wallets available on the market, some are restricted to certain locations, and only a few are accepted by eCommerce sites. The most well-known and trusted digital wallets include-
- Amazon Pay
- Apple Pay
- Google Pay
- Samsung Pay
2. Contactless Payments
Contactless payments use the information provided by digital wallets to orchestrate in-store purchases. By simply touching their mobile device to the payment terminal, customers can complete their transactions.
The mobile wallets that support contactless payments include Apple, Google, and Samsung Pay. However, some banks, such as Chase, have launched their own digital wallets for their clients.
3. Closed-Loop Mobile Payments
Closed-loop mobile payments operate just like mobile wallets, except they are connected directly to a single company. This means customers can only make purchases at the respective business.
Organizations that have utilized closed-loop mobile payments include-
- Taco Bell
By storing billing and personal information in the business's mobile app, consumers can make mobile and in-store purchases instantly.
4. Money Transfers
Prior to transfer apps, mobile money transfers were limited to banking apps, which would only let clients move money between their personal accounts. Now consumers can request and send money to anyone, regardless of their bank, by using top mobile transfer apps, such as-
- Apple Pay
- Cash App
Some apps require an additional fee to expedite the transfer to the bank account, while others have no charge but may take a few days for the funds to become available.
5. Mobile Point-of-Sale
Mobile point-of-sale (mPOS) systems are an alternative option for traditional POS solutions with card readers.
While some mPOS providers offer portable card readers that plug into the mobile monitors, merchants can complete a transaction from any location by typing in the customer's information. This is great for vendors, sales associates, and businesses that regularly move locations.
6. Carrier Payments
Carrier payments are the earliest form of mobile payments, in which a cellphone user can make a purchase and the cost is added to the following bill, rather than being collected immediately. While this method is not used as much anymore, it was once popular for purchasing ringtones and making donations.
As with any business venture, mCommerce has several pros and cons that companies should consider before delving into the mobile retail market. The most significant benefits that mCommerce offers are-
- Faster Transactions
- Enhanced Customer Experience
- Better Customer Connectivity
- Customized Content
- Detailed Analytics
The data and insights gathered by mCommerce alone give marketing the ability to drive sales and interest in a specific product whenever trends show declining engagement.
However, mCommerce also presents a unique set of challenges-
- Technology Optimization
This requires businesses to evolve with updates, design changes, hardware innovations, and best practices in order to optimize their technology. Otherwise, retailers can fall behind modern competitors and fail to bring customers the newest shopping experience.
- Privacy Issues
Otherwise, buyers can experience credit card and identity theft, causing them to lose all trust in a business. Therefore, retailers need to ensure their payment processors and software are PCI compliant. Management should also actively monitor fraudulent and suspicious activity to prevent leaked information.
- Competition Comparison
- Traditional Retailers
By creating a uniform customer experience between all sales channels, retailers can promote the brand itself rather than a specific platform over another.
There are several ways a business can offer their customers a mCommerce channel. However, in order to provide an engaging mobile experience, companies should consider-
- Creating a Mobile App
While this essentially eliminates the risk of missing out on sales, it also requires companies to have a robust production and order fulfillment system that can manage high order volumes.
App development requires a seamless transition between the in-store and e-commerce sales, so customers aren't confused when it comes to completing the transaction. Therefore, developers should reference the online store when installing the design, payment processing, and login features to standardize the shopping processes.
- Integrating Mobile Payments
With their payment information already logged into the app, customers can reduce the wait time at checkout. Integrated payments allow buyers to perform their own transactions, allowing employees to focus on the needs of other shoppers.
- Reducing Load Time
Even if the buyer does complete their transaction, they leave with a bad customer experience that may deter them from returning. Therefore, businesses must ensure that their app has a robust infrastructure that can handle high volumes of simultaneous shoppers and transactions.
Currently, there is no end in sight for mCommerce technology. Social media platforms, such as Instagram, are constantly updating their apps to expand their marketplace to potential buyers, enabling a company to boost their conversion rate.
From personalized advertisements to push notifications, business owners can directly connect to consumers no matter their location. This enhanced connectivity and convenient shopping method only increase brand exposure, client base, and potential sales.