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The future of mobile commerce –there is a catch!
By Morris Pentel, Chairman of the Customer Experience Foundation
What is the future of the smartphone? It’s an amazing technology. Watch TV, find a restaurant, or browse the internet - you can use the smartphone. Shopping & social networking or just making a call - the smart phone is the answer. There is so much hype around how we are going to use these fantastic devices, it’s difficult to separate what’s real and what’s not.
We conducted a research programme over 6 months in 4 countries to understand what’s going on and how ready organisations are to take advantage of this new channel.
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Our findings
Overall, consumers want to shop now from their mobile devices and businesses are not ready to deliver quality services. The study also revealed that:
- Mobile shopping is gaining momentum with frequent users driving mobile commerce (m-commerce). There is a massive untapped demand that has not yet reached the key tipping point. The typical frequent user only shops via a mobile five times in a six month period.
- There are differences in the ways that geographical, cultural markets are developing preferences for specific functions. This creates distinct business drivers and user preferences in these unique regions:
• USA – It’s about saving money;• UK – Social networking is very big;• France – The wow factor is important; and• Germany – They want solutions engineered for the world of work.
- M-commerce is already producing billions of dollars today but will produce trillions of dollars in three to four years when payment via mobile devices becomes more common and begins to replace plastic card payments.
- Shopping is only a small fraction of a mobile phone’s capabilities.
- The value and frequency of individual shopping transactions are increasing.
- There is a major gap between what businesses and their suppliers can deliver and what consumers want.
- Businesses and Mobile Service Providers can’t assure a great experience and quality service.
There are now more than 6.920 billion mobile phones on planet earth. With a world population of 6.915 billion people, there are more phones than people according to research released in July 2011. These figures don’t mean there is a mobile phone for every person. Estimates suggest that around 4 billion people have a mobile device but the numbers of smart phones are less than 30% of that figure. So globally there are about 1.2 billion smart phones users today and this number is growing quickly.
There are the “haves”(1.2 billion smart phone users) and the “have not’s” (2.8 billion old phone users & 2.9 billion without any phone at all). Within the group who “have” mobile phones, there has been a rapid switch to smartphones. This trend is explosive. Bigger & bigger forecasts for smart mobile device growth are being published every day. Although the numbers vary from forecast to forecast, there is no doubt that the trend is real and rapidly increasing.
The same is true for mobile commerce. The growth is dramatic. In fact the success of smart phones as a retail channel is now demonstrated by case studies across the globe. The growth of m-commerce has sparked demand from every major consumer facing business for a mobile site or app. Shopping via the smart phone is already generating billions of dollars of revenue in every market in the world. However, it represents significantly less than 1% of overall completed financial transactions and globally would barely register when compared with commerce utilizing credit, debit, charge or gift cards.
That’s only part of the story. A new behaviour called m-transaction is just around the corner. M-transaction will see the mobile device become the replacement to plastic card in your wallet for the majority of street transactions over the next 3 – 5 years. Every indicator suggests that the mobile device will eclipse the role of the plastic payment cards for the majority of transactions over the next three to five years. It can be compared to the universal adoption of plastic payment cards as a replacement for cash as the most common form of financial transaction.
However this is not the only area of success for the smart phone. M-content for mobiles & tablets from games & news to travel & navigation is increasing at a similar rate. More books were sold as content than were sold as paper books. There is also the massive growth in the use of tablets like the iPad2 to consider. Pundits suggest that 30% of all mobile browsing in 2011 was on tablets.
But there is a catch and it’s a big one! Your wonderful smart phone with all of its great features still has a problem. How long does your battery last! If I need to use my phone to pay for dinner perhaps I won’t send those tweets or play angry birds.
In the future the owners of smartphones may have access to new services but will the services work & will you have the battery life to use them?
For the full story visit www.customerexperiencefoundation.org where you can see the 30 minute video about my findings which was shot at a special event at the Southbank studios of ITV last month. You can also download the full white paper. There is no registration required. Or if you have the battery life & the network speed you can even watch the video on your smartphone. Last week 20% of visitors watched on smartphones.
About the Author:
Professor Morris Pentel, Chairman of Customer Experience Foundation, runs one of the most respected consulting businesses in the UK with a track record based on successful work for some of the largest institutions in the world. He has been involved in the delivery of some of the most significant innovations in technology.
About the Customer Experience Foundation
The Customer Experience Foundation provides actionable insight into delivering better customer experience at a lower cost. It is a world leader consulting practice on contact strategy & customer experience.
