Mobile Commerce: Types, Pros and Cons, Trends

Mobile commerce or m-commerce involves the use of wireless handheld devices such as mobile phones, and tablets to conduct commercial transactions online which can include the sale and purchase of products, online bill payments, online banking, etc. The basic principle of mobile commerce revolves around electronic commerce, involving work and business that is conducted over the internet.

M-commerce refers to transactions done using a smartphone or a mobile device like a tablet. E-commerce refers to transactions that are typically carried out using a computer, laptop, smartphone, or a mobile device like a tablet. Mobile commerce can be looked at as a large subset of e-commerce, where firms or individuals conduct business over the internet. According to Pew Research Center, approximately 97% of Americans own a mobile phone, and an estimated 85% own a smartphone.

Mobile commerce has seen exponential growth driven by an expanding market of mobile devices, increasing capabilities of mobile devices, mobile network implementation, user acceptance towards secure mobile commerce and more. According to the market research company Statista, retail m-commerce or mobile commerce sales amounted to approximately US$ 431 billion in 2022.

M-commerce applications cover a broad range of transaction options and can be divided into the following types -

Mobile shopping — This is quite similar to e-commerce applications, but is accessible through mobile devices. These are dedicated applications, optimized websites, or social media platforms like Facebook or Instagram that allow in-app purchases or are linked to online stores.

Mobile banking — Mobile banking mimics online banking in almost all aspects. These are dedicated applications that also feature chatbots and messaging apps to deliver services. Some features may be omitted or have a limited scope of use in mobile applications.

Mobile payments — This mobile commerce implementation focuses on progressive innovation and allows customers to send or receive money in innovative ways.

Pros and Cons of Mobile Commerce

Innovative technology often has its advantages and disadvantages. Some of the pros and cons of mobile commerce are discussed below -

Pros

· Omnichannel — Omnichannel experience is a very unique aspect of mobile commerce. It enables customers or users to buy and pay for goods using multiple online and offline channels such as Amazon, and social media apps like Facebook, Instagram, or other dedicated mobile apps. Such contextual commerce offers companies the opportunity to showcase and market their goods and services on various platforms and give customers or users multiple options.

· Convenience — Convenience is a big factor for online shopping and mobile shopping or m-commerce offers convenience and product availability information at their fingertips. M-commerce is also quite secure. A survey by Dynamic Yield Research shows almost 76% of the people surveyed, prefer mobile shopping because it’s easy and instantaneous. Most of the well-known mobile commerce platforms provide a great user experience and user interface to attract more and more customers.

· Personalized content & Targeted marketing — M-commerce can offer targeted marketing based on geographical regions and deliver location-based personalized content. Targeted marketing also helps companies to collect user data like reviews, ratings, likes, dislikes, interests, shopping preferences for analytics and further improvements.

· Geolocation — GPS and geolocation are essential when developing an m-commerce application and strategy. Proximity marketing is becoming a very useful marketing tool and promotes visibility. Geolocation is also gaining popularity as it allows customers to find shop locations in malls.

A survey published by Snap Inc shows that 63% of millennials prefer to first verify items on the phone before going shopping.

Between 2017–19 the ‘near me’ mobile searches grew by over 250%.

40% of shoppers in the USA use their phones to compare product prices different between offline and online stores.

While there are many advantages of mobile commerce, there are a few disadvantages to it also.

Cons

· Competitive marketplace — Statista reports that m-commerce share has grown 72.9%. More and more companies are jumping on the m-commerce bandwagon. The downside is that almost all m-commerce applications have a similar look and feel to them. With fierce competition it’s hard to stand out of the crowd.

· Optimization — Any mobile application has to be updated and optimized consistently and regularly to offer the best functionality, security and updated features to the users. It is sometimes difficult to offer such optimization for outdated mobile devices or for devices which run outdated software.

· Challenges in data privacy — While it’s now relatively easy to access and collect user data, it can also create privacy issues. Companies have to be more responsible to safeguard such information and ensure that users update m-commerce applications regularly to avoid data breaches.

With the increasing sophistication and technological upgrades, new trends pop up and companies can adapt to such changes to further their business.

Some of the new trends in mobile commerce

· One-click orders — Customers are finicky and opt out of the purchase for many reasons. Reasons for not checking out can be a complicated checkout process, unexpected shipping charges, lack of customer support etc. Approximately 17% of online buyers in the USA abandon their shopping carts if the checkout process is found to be complicated.

The use of one-click ordering can lower or eliminate cart abandonment issues. Mobile apps help users to store their payment credentials securely which combined with one click purchase reduces the time spent by the user.

· Voice shopping — Voice assistants like Apple’s Siri, Amazon’s Alexa and Google’s Hey Google have been around for a while now. Technological advances now enable these voice assistants to offer verbal search options, place orders, track delivery, and even contact customer support. More and more users are now comfortable with this voice-enabled option for browsing and shopping.

· Social media — Social media is extremely popular and also a great way for business promotion and sales. It offers a huge opportunity to expand the sales channels because of the reach social media applications like TikTok, Facebook, Instagram and others social media offer. Many applications like Instagram offer links that can take users to m-commerce sites or applications.

Mobile commerce or m-commerce is an essential part of society and companies looking to increase their market share, volume & revenue should plan and invest in this technology. Using a retail software development solutions firm that specializes in developing cross-platform apps based on the company’s business specifications, and budget can help companies move from offline to online business easily.