According to figures from Juniper Research‘s Mobile Web 2.0: Leveraging Location, IM, Social Web & Search report, mobile 2.0 applications currently generate $5.5 billion. With the sum expected to rise to $22.4 billion by 2013, businesses are unsurprisingly looking to target this lucrative market.
Shopping on mobile phones is an attractive concept for both businesses and consumers. According to Jonathan Watson, CEO, Reactor Mobile, the channel offers shoppers the opportunity to purchase instantly.
"The advantages of mobile shopping are in the flexibility it provides and the potential for impulsive purchases. With a mobile service, someone standing in a physical store can look to see if the goods they’re interested in are cheaper or more suitable on a mobile storefront, and if so make the purchase there and then using their phone. Additionally, advertisers who offer mobile storefronts can also advertise these on their traditional TV and print campaigns, this means that a user can go there straightaway using their phone and thus is more likely to make an impulsive purchase," commented Watson.
However, there are a number of issues holding back the market such as consumer perception of data costs and poor payment methods.
"Data costs associated with browsing have been perceived as expensive. Although companies like Vodafone now include free Internet access as part of their contracts, the message is simply not getting to consumers fast enough," said Andy Bovingdon, VP Product Marketing, mobile services providers, Bango.
"Consumer awareness is another issue. Although many people now browse on their phones, there is still a large percentage that doesn’t realise it is possible or finds it too hard. Lastly, old payment methods such as Premium SMS are still a dominant on mobile. This has many problems with high revenue leakage, poor customer experience and high customer support costs. But there is now a swing to mobile web payments helped by the UK Payforit scheme supported by the UK operators.
The speed of current mobile networks will also play a role in the future of mobile shopping. Clay Olivier, Chief Operating Officer at e-commerce solutions company, Volusion cites the current technology available as another barrier to the industry’s success.
"The main issues we are seeing regards slow mobile surfing speeds, design challenges, difficult navigation due to the reduced screen size, and the fact that there are so many different browsers being used on cell phones depending on the manufacturer.
"A big hindrance to completing a mobile purchase however is often the customer’s lack of patience. Traditional online shoppers will quickly leave a website that is too slow. Design is also a critical element for traditional online experiences. The right design can create confidence and trust for a business in the eyes of an online buyer. The lack of graphics on a lot of mobile browsers leave some sites looking less than exciting, which can definitely lose sales. Simultaneously with design, there is also the trouble of navigating many traditional sites on mobile browsers.
"The good news is that speeds are increasing, mobile browsers are improving and usability is also starting to make great strides in the mobile space," said Olivier.
Infrastructure being built
Other factors are also encouraging. Within the next two years, one-third of the world’s largest banks are planning to launch their own mobile services. The survey commissioned by enterprise software and services company, Sybase 365 in February 2008, revealed that 53 per cent of American banks intended on offering mobile banking by 2010. Despite concerns surrounding the security of a mobile banking system, 33 per cent of consumers were also keen on banking on the move.
This sentiment was echoed in another survey conducted by online market research company, Lightspeed Research. Its survey of 1000 Britons revealed that 17 per cent of those questioned would be willing to make purchases via their mobile handset.
Males were more willing to shop on their mobile than women, with almost double the number of men open to the idea than women. Of those who were keen to shop via their mobile, nearly three-quarters would shop at well-known high street and online stores. This is in contrast to those who were looking to shop for cheaper prices. Only 23 per cent cited ‘any company offering cheap prices’ as attractive, suggesting that consumers do not the trust the technology fully yet.
There is roughly four times the number of mobile handsets than PCs worldwide. Coupled with a more secure payment system and an increase in retailers offering this type of service, mobile shopping could grow as quickly as e-commerce has done.
"This research suggests that the mobile phone could become a viable way for retailers to reach their customers," said David Day, Lightspeed Research CEO, Europe. "The 24/7 nature of the mobile phone, a device that many people have with them all the time, and the increase in Internet-ready phones offers a real opportunity for retailers to match their offer to the products and services customers may want to buy in this way."
What are people buying?
The types of products or services purchased were also a reflection of the medium. ‘On the go’ type products, such as film, theatre and events tickets proved extremely popular as did entertainment products such as CDs and DVDs.
Chris Simpson, interim MD, The Search Works is not surprised that CDs and DVDs are the most successful products, but foresees more industries taking better advantage of the technology.
"Gaming, music and technology purchases have got some traction but we will see more growth in areas where time is very much of the essence or the consumer/brand conversation is actually weaker. Flowers, take-away foods and transport all have big opportunities, particularly if they can integrate with their existing e-commerce offerings. Booking a delivery slot for your groceries via your mobile on the way home becomes worth doing and a big time saver," commented Simpson.
Mobilise all sites
Howard Pull, senior business consultant at Conchango recommends that UK businesses should consider optimising their existing portals for the mobile web.
"Shopping on mobile handsets provides relevant and compelling mobile interactions between retailers and consumers. Mobile should not be treated as a standalone channel but an integral part of the digital experience. Retailers should design their websites with a view that this may be accessed via a traditional or mobile browser," said Pull.
"Firstly, consider the reasons and goals users would visit your website on a mobile – purchases won’t always be the first for many brands – research and account management functions such as order status will be initially more important to most consumers in 2008, and this will indirectly lead to increased sales through all channels.
"Test your website on a mobile browser, what is the experience like? – If its poor, consider a redesign or build a focused mobile site (m.site) that satisfies some basic goals for the brand. Get there before you’re competitors – this is a great opportunity to become more engaged with your consumers; don’t wait for this to become a big sales channel in the marketplace before investing.
"Always remember it
is a mobile phone that’s being used to access the site and use this to your advantage – keep it simple and use the phones functions such as hotkeys to support this e.g. pressing 0 on Facebook mobile always takes you back to the home screen," continued Pull.