Effects of M-Commerce on E-Commerce

What E-Commerce services are provided by M-Commerce?
The increase in
mobile sales is no disbelief, as the sustained increase in smartphone use
through the U.S. According to the Pew Research Center, 95% of U.S. grownups own
mobile phones and 77% of them are smartphones. Improved access to both smart
devices and Wi-Fi are facilitating the swing to mobile shopping.
There are many diverse explanations and descriptions of what M-Commerce is. Lehman (1995) describes M-Commerce as “the use of mobile hand-held devices to communicate, inform, transact and entertain using text and data via connection to public and private networks.” This is a very broad description as mobile technology has continued to grow and its capabilities have been developed and continue to develop furiously. Haddon (1997) supports this broad view by defining M-commerce as “a financial transaction specifically purchasing and selling”
M-Commerce
includes many new innovative apps that have become possible simply due to the
advances in technology. These apps include mobile financial services – checking
account balance/info, money transfer etc. Travel – online reservation,
timetables, Airline/train tickets. Entertainment (games) News/information. Event
ticket booking (telephone and online booking).These are all examples of
E-commerce services that have the capability to be carried out using mobile
devices.
Discuss the role of M-Commerce in retailing.
According to CBRE, from 2013 to 2017 M-commerce sales grew 276% and they are expected by 2021 to grow another 170%. This growth is expected to bring m-commerce sales beyond those of computer sales and account for approximately 54% of online retail sales by 2021.
Combined with changes in consumer
shopping habits technology and retailers’ investments in mobile channels they
are contributing significantly to m-commerce growth.
From advertising and social media
to mobile-friendly websites and apps, retailers are investing in strategies to
reach consumers via their phones. Although the consumer demand is driving
investments data is another main for encouragement pushing mobile commerce. By
implementing attractive loyalty plans and apps, consumers are sharing a data
about their shopping behaviours. Thus facilitating retailers with an improved
and enhanced understanding of their customers and the ability to adapt offers
and products to individual customers.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

According to
Strategy& survey, over half (54%) of consumers like online loyalty
promotions that provide points and offers which allow consumers to have access
across all channels both instore and online. An example of this kind of scheme
is represented by Amazon who offer their customers a subscription option to
‘Amazon Prime’. This promotion offers consumers free next day delivery and
discounts on products all for $79 dollars a year. Last year’s figures showed a
sign up of over 2million people with a growth annually of 24%. A statistic that
Amazon have released is that a subscriber spends on average 130% more than
non-subscribers and new members spend a total of $900 which is an increase from
$400 .
Latitude1 surveyed smartphone users in both America
and the UK, which resulted in over 60% of consumers once they received an email
or a text message from a retailer they were more inclined to buy from that
brand. Furthermore, ‘try on’ virtual simulations, digital content, sample
videos and product info interested 79% of shoppers
PWC (2018)
stress ‘Give customers a
new, enjoyable, rewarding, novel, and inventive channel in which to purchase
your products and increase their loyalty.’ Resulting in m-commerce becoming
second nature and part a normal and expected part of the retailing experience.’
Why is M-Commerce such a fragmented market?
Enterprise Guide to Gaining Business
Value from Mobile Technologies a book by Adam Kornak’s expresses mobility as
‘business transactions and data access at any time from any device, anywhere
using wireless technology.’Kornak (Pp. 4-5) (2004)
Moreover,
Deloitte stress in mobile ‘one size does not fit all. Retailers should take
steps to understand their customers and how they shop within specific product
categories.’ Retailers have the ability to shape and use the technology to enhance
their shopping experience.
Camponovo (2002) highlights that
m-commerce is a very promising and an emerging industry, however highlights that ‘due to
technology continuously changing the m-commerce industry is complex and a very
uncertain environment. Futhermore, Camponovo
(2002) paper on m-commerce business models highlights that many big players in
the industry are still experimenting with a variety of technologies and
business models with the long term view of trying to implement a profitable and
sustainable position.
Overall there are many uncertainties in the m-commere sector as in what technologies will have a transformative influence, and what technologies are just hype? This is a normal for emerging industries. As a consequence retailers must try a variety of strategic approaches as well as continually revaluating and repositioning themselves in order to be in the most competitive position possible.
Why do retailers spend much of their IT budget on M-Commerce?
Michael Moeser, Javelin payments practice
director stated “Mobile is the growth engine of digital commerce.” In the US a
survey by Javelin predicted that the market share of purchases by smart devices
will grow to $319 billion by 2020 from $122 billion in 2015.
eMarketer’s
numbers suggest, a huge amount of sales are being missed out by retailers. They
indicated that many retailers websites are not mobile friendly/accessible. According
to eMarketers consumers are influenced up to One-third more by searching for
additional information on products via smart/mobile device
Richard
Lowe, CEO, BT Expedite highlighted recently that huge retailers are investing
in technology and have set aside up to “Many retailers are struggling to keep
pace with the rapidly changing requirements of multichannel operations with
legacy systems slowing them down. Replacing these systems is vital for gaining
competitive advantage.”
“Retailers
need to focus on their mobile apps, mobile marketing and facilitating the
omnichannel buying experience,” Mr. Moeser said. “Consumers are more willing
than ever to receive mobile marketing messages from retailers and willing to
act upon them.”
Millennial
shoppers aged 25-34 from a recent study show they are the top and largest users
in the mobile commerce area. With this in mind it is important for retailers to
streamline their services and offer a user friendly experience across multiple
services. With the statistic of 87% of 25-34 year olds have at least purchased
a product online this highlights the shift and the importance of integrating
technology.
Recent study
shows that the largest share of mobile commerce will come from millennial
shoppers, as the top users of mcommerce shopping are individuals aged 25 to 34.
Eighty-seven percent of that demographic has purchased something online in the
past month, showcasing the importance for retailers to offer streamlined
checkout options.
Discuss the impact of M-Commerce on competition among retailers.
According to David Eads (2011) a survey found that 90% of
retailers believe that mobile commerce is already impacting shopping activities
and that shoppers are gradually demanding a seamless mobile shopping
experience, with over 60% of shoppers choices being mobile influenced for
instore purchases, with 40% using mobile apps to make shopping decisions and
37% using a combination of the two.These statistics illustrate the barriers
retailers are facing that are stopping them from introducing end-to-end mobile
commerce strategies.
Whether it’s in the travel, healthcare, retail or the
financial industries, the key challenge for businesses to overcome when
adopting a complete mobile strategy is the rising level of mobile
fragmentation. Ley Valentin, C.
(2017) highlights when we look at the best brands in retail the best
customers and the best retailers success is an experience that is
consistent across all mediums and platforms. There is an extraordinary
level of competition in the mobile marketplace with numerous crucial companies
persistently developing new technologies, shoppers have never had so many
options.
Because of MIDs, customers have come
to expect a flexible and seamless experience across different channels, whether
at their local store or on the social web, whether mobile or at a computer, and
whether online or offline (Fulgoni, 2014).
What are the difficulties in managing mobile technology?
There are many opportunities in mobile technology however as Jonas Haertfelder et al (2016) state there are
many challenges as well. Piotrowicz et al (2014) highlight the development of
social media and in what way it has brought the social network into the store.
From sharing prodcuts, experience, product prices pictures, opinions and
thoughts. Spaid et al (2014) discuss how customers can post their opinion
regarding a sales assistant they have come in contact with or post and share a
comment regarding their satisfaction or dissatisfaction of the store. This as
Piotrowicz et al (2014) highlight is a problem and challenge for retailers as
they have no direct influence on any social network.
Piotrowicz et al (2014) also highlight the organizational
challenges that can occur trying to update and maintain multiple technology
channels. Fulgoni (2014) develop on this point by discussing that even if a
retailer provides different channels, usually there are different people and
different departments highlighting the lack of integration within
organizations. Zhang et al, (2010) emphasize the need for retailers to optimize
and strive to achieve efficiency across channels.
Another challenge retailers have is the buying process
between channels. Brynjolfsson et al, (2013) mention the ‘showroom’ phenomenon
which invites customers to the store for the physical “touch and see” but the
purchasing process of the product is online. Verhoef et al., (2015) underline
that retailers are in a tricky position as Peltola et al, (2015) stress
customers do not separate the different channels, they are all one and the
different channels in a customer’s journey are only continuing to increase.
Furthermore, it is important to get the balance of
channels correct. A study from 2000 that’s has been cited found that the more payment
options, frequently leads to a reduction in sales and consumer satisfaction. An
example is the variety of mobile payments. Several mobile wallets are
unavailable in all geographic positions while shoppers in some sites favour one
payment choice over another. A real life example is in the Netherlands, 70-80% of individuals use iDeal, a payment
system which isn’t used in many other locations or very few.  If you don’t have iDeal in Holland, the Dutch
won’t buy from you. Overall with technology there is always the need for
constant optimization to ensure the customer has a fast and simple experience.
What is the future for M-Commerce?
Ovum
predicts by 2026 that a quick and efficient experience will be critical to a
retailers’ success whatever the channel whether that be mobile or desktop.
Overall this means that the customer will have the ability to buy a product or
service instantaneously and have the ability to see when it’s on its way to
their home. Amazon and Ebay are already driving the market towards this ‘same
or next day delivery’ mentality which is raising customers’ expectations.
This will not only occur in the
retail sector but across all sectors. AI and Data analysis is predicted to play
a huge part in m-commerce and shoppers future experience as they demand and expect
their experience to be more related to their lives. Recommendations and product
proposals will become vital for retailers, merging social media activity and prior
searches to mould and adapt the experience to that individual, whether in the
physical store or online via multiple devices.
A study by
eMarketer reports that social networks users favour messenger apps (54.4%) to
get in contact with the retailer as opposed to phone calls email, and
traditional discussion (46.6%). H&M and Starbucks are already brands that
have already implemented technology like chatbots and messaging services and
this will continue to grow throughout the different brands and sectors.The bot
technology is still in its emerging period however Verhoef, P et al (2015)
state there is enormous potential for this technology in the mcommerce market.
Consumers can
anticipate Augmented reality (AR) to exhibit how outfits will appear on them
before they choose to purchase. From makeup and household furniture, this
technology could form the divide between virtual and he real world. Currently,
return of goods has always been a problem for retailers however AR could
eliminate this as shoppers will have the opportunity to ‘try before they buy.’
According to Statista, in 2017 there were around 2.31 billion smartphones connected to the Web; this number is still growing and in 2020 it will probably reach almost 3.0 billion. Google predicts PWAs are the future of mobile and we think they can also be the future of mobile commerce, solving its most problematic pain points. PWAs combine the best things from the mobile and web approaches – Mobile web reach which is 3 times higher than on Apps. It is way easier to launch an internet browser and look for info, a product you need, etc., than to download a particular app, install it, launch it, and so on. This technology is still pretty new and rather in the early stages of development, but some huge e-commerce players have already benefit from it. For example, AliExpress increased conversion rate for new users by 104% with their new PWAs.The airline industry is taking a page from smartphone and computer hardware makers, by dabbling in facial recognition technology to speed up the convenience factor for customers. Recently, Delta Air Lines was the first to launch a biometric terminal in the U.S. for international flights at its Atlanta hub. Passengers can choose to check-in with the optional technology to speed up the process.
Bibliography
Cao, L (2014) Business model transformation in moving to a cross-channel retail strategy: A case study. International Journal of Electronic Commerce 18(4):69 – 96 eMarketer (2015) Prognose zur Anzahl der Smartphone-Nutzer weltweit von 2012 – 2018 (in Milliarden). http://de.statista.com/statistik/daten/studie/309656/umfrage/prognose-zur-anzahl-der-smartphone-nutzer-weltweit/. Last request 20.08.2015Fulgoni, G M (2014) ’omni-channel’ retail insights and the consumer’s path-to-purchase: How digital has transformed the way people make purchasing decisions. Journal of Advertising Research 54(4):377 – 380 Peltola, S, Vainio, H, and Nieminen, M (2015) Key factors in developing omnichannel customer experience with finnish retailers. In HCI in Business, volume 9191 of Lecture Notes in Computer Science, pages 335 – 346 Spaid, B I and Flint, D J (2014) The meaning of shopping experiences augmented by mobile internet devices. Journal of Marketing Theory & Practice 22(1):73 – 90 Verhoef, P C, Kannan, P, and Inman, J J (2015) From multi-channel retailing to omni-channel retailing: Introduction to the special issue on multi-channel retailing. Journal of Retailing 91(2):174 – 181Zhang, J, Farris, P W, Irvin, J W, Kushwaha, T, Steenburgh, T J, and Weitz, B A (2010) Crafting integrated multichannel retailing strategies. Journal of Interactive Marketing 24(2):168 – 180Piotrowicz, W and Cuthbertson, R (2014) Introduction to the special issue information technology in retail: Toward omnichannel retailing. Int. Journal of Electronic Commerce 18(4):5 – 1PWC, (2018). [online] Available at: https://www.strategyand.pwc.com/media/file/Shoppers-on-the-go.pdf Www2.deloitte.com. (2018). [online] Available at: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumer-business/deloitte-uk-the-dawn-of-mobile-influence-final.pdf Camponovo, G. (2018). [online] Pdfs.semanticscholar.org. Available at: https://pdfs.semanticscholar.org/05c0/bfc422869d3ed3ecc16fb4de8def2c1cbac0.pdf. Ley Valentin, C. (2017). [online] Available at: https://www.mytotalretail.com/article/m-commerce-opportunity-win-online-retail/ Haertfelder, J. (2016). [online] Available at: https://www.researchgate.net/publication/297715060_Opportunities_and_Challenges_for_Local_Retailing_in_an_Environment_Dominated_by_Mobile_Internet_Devices_-_Literature_Review_and_Gap_Analysis Blum, M. (2018). Are PWA’s the future of M-Commerce? – Mateusz Blum – Medium. [online] Medium. Available at: https://medium.com/@mateuszblum/are-pwas-the-future-of-m-commerce-5cdfc295d66e Hopping, C. and Walker, D. (2018). The future of m-commerce. [online] IT PRO. Available at: https://www.itpro.co.uk/mobile/28092/the-future-of-m-commerce