With the holidays upon us, shopping has become the talk of the town these days. While many reports have emerged highlighting the increased use of e-commerce as a way of avoiding long lines at stores this holiday season, little to date has been mentioned regarding mobile commerce.
Despite the massive hype under way by various m-commerce concerns, including wireless carriers like Sprint PCS and wireless Internet service providers like OmniSky Corp., m-commerce is not expected to play any kind of role this holiday season, or anytime soon.
But m-commerce involves much more than buying goods from a wireless device. It is any transaction taking place through a wireless phone, which includes banking and financial trading, buying entertainment services and even using wireless services to direct a consumer to a brick-and-mortar store. And those are just the possible consumer uses of m-commerce.
While content is king-and there actually are quite a few m-commerce options available worldwide today-what has stunted growth of m-commerce services is consumer frustration.
“Contrary to popular wisdom, content is not a primary concern of users in most countries,” read a recent report by Boston Consulting Group. “It is true that many nonusers cite the lack of content as one of their main reasons for not subscribing. Still, many users never get to the point where they could judge the content. They are stuck grappling with the difficulties of interacting with the device and the service.”
The user interface serves more to dissuade use than encourage it, specifically in terms of speed, ease of text input and ease of navigation, the firm said.
And that’s not the only hurdle facing the business. There also is a significant gap between what is possible today and what users have been led to expect. Going further, m-commerce fees and business models are confusing and often out of line with what consumers desire. Privacy and security concerns also are an issue. Thirty-seven percent of m-commerce users responding to a BCG survey said they felt the wireless Internet was less secure than the wired Internet.
However, BCG noted that these issues closely mirror those of the fixed-line Internet just five years ago.
“It too had serious problems related to market acceptance, stemming from narrow bandwidth, slow transmission speeds, difficult user interfaces and high costs,” the report read. “And it too was the object of dire predictions that it would never make it commercially.”
It seems ironic that one of the primary factors limiting m-commerce-the use of fixed-line Internet e-commerce as a benchmark-was itself limited by the same factors. Traditional e-commerce, however, had no benchmark against which to compare it. Its success has spoiled consumers to a point where complementary nascent technologies like m-commerce are penalized.
However, BCG remains a firm believer in the future of m-commerce. The company estimates business-to-consumer m-commerce revenues will near $100 billion by 2003, half from data transmission charges, e-mail and advertising and the remainder from transactions and related activities.
BCG identified five areas of utmost importance that all m-commerce players must recognize if they want to succeed going forward.
First, take advantage of the unique features of mobility, such as its anytime, anywhere personalization features. “The winning strategy calls for actively using emerging localization and authentication features,” read the BCG report.
Second, build the market. Players must reduce entry costs, introduce more intuitive user interfaces and quit building up expectations beyond what they can deliver.
Third, leverage brands, billing relationships, location data and other capabilities to manage the consumer’s portal to the m-commerce environment.
Fourth, integrate services. “Convergence is the name of the game, and companies with existing bricks and clicks are well positioned to play.”
Finally, create a solid business and revenue model. While many may be tempted to bill on a per-use basis, consumers have grown to expect flat fees and subscriptions. About 80 percent of m-commerce users surveyed worldwide said they favored flat-rate pricing over per-minute or per-bit charges.
