Mobile commerce has been steadily growing over the years and is projected to reach 43.4% of total e-commerce sales in 2023. With the rise of mobile devices usage, proliferation of m-commerce apps, and the widespread resolution of security concerns, it is essential for online business proprietors to keep up with this trend.
M-commerce: From Zero to Hero
In 1998 Apple introduced the iMac, Microsoft released Windows 98, Google filed for incorporation, the first MP3 player was released, e-commerce became mainstream. That same year, Kevin Duffey introduced for the first time the term mobile commerce or m-commerce – an event that did not mark significance in the technology world back then. 24 years later, global e-commerce sales have reached 5.7 trillion as of 2022 with reports predicting a peak up to 6.3 trillion in 2023.
Did you know that almost half of these sales are now made through mobile devices? With m-commerce, you can buy anything you want from anywhere, at any time, just by using your phone or tablet. No more waiting until you get home to make a purchase. This swift expansion can be attributed to numerous factors such as the rise of mobile devices usage, proliferation of m-commerce apps and the widespread resolution of security concern. Given the mobile advancement and benefits, companies that accept and integrate m-commerce and novel technologies are expected to succeed and remain ahead of their competitors.
Promising Future of M-commerce in Numbers
According to Insider Intelligence, m-commerce sales are projected to reach 43.4% of total e-commerce in 2023, which is an increase from 41.8% in 2022. Furthermore, the m-commerce market size is expected to surge to $488.0 billion, representing 44% of e-commerce by 2024. It is a no-brainer, considering current trends and statistics, that mobile market will continue to grow. Hence, keeping up with it is essential for online business proprietors. Some of the reasons of why m-commerce will be unavoidable in the future include:
- Mobile users continue to grow
- Internet browsing via mobile is more convenient compared to desktop
- M-commerce sales are ever-increasing
- Consumers’ habits are affected by mobile devices
- Consumers may look for products on mobile before buying from physical stores
Many mobile devices possess a built-in card storage feature, including Apple Pay, Samsung Pay and Google Pay, which uses the same near-field communication (NFC) technology that supports other forms of virtual payment such as contactless cards. M-commerce offers an effortless and convenient way to reach a broader audience, leading to the creation of a global customer base. As long as a person owns a mobile device and internet connection, then they are a potential customer of any m-commerce platform. Additionally, the mobile market presents stimulus for impulse investment, since consumers are enticed by visual graphics that generate a desire to make spontaneous purchase.
As nearly 92% of individuals who conduct local searches select an option on the first page of results, m-commerce and local SEO can generate more mobile and physical traffic. This way businesses can increase sales simply by focusing on the right moment and optimizing their mobile site for local SEO.
Regardless of the benefits, there is a limitation on how useful m-commerce can be since consumers may not always be able to navigate given data properly. Despite the graphics, comprehensive product descriptions and consumer discounts, brands must be cautious when using m-commerce because the initial impression of a mobile website or app is often the basis of customer reviews.
M-commerce Success Story: IKEA
Mobile applications that utilize videos to highlight a product’s key features are more likely to generate increased revenue. Three years ago, one of the biggest Swedish chains/or just IKEA, introduced AI-driven digital design experience – IKEA Kreativ. The innovative technology was developed to inspire customers and help them picture how furnishing will fit and function in their homes, via lifelike interactive design. Since then, reports have shown customers taking advantages of the app and doing their home shopping entirely online.
Furthermore, IKEA also launched an AI-empowered demand sensing tool analysing more than 200 data sources in order to provide intelligent recommendations for each product – a big step forward in the accuracy of demand forecasting. To give an insight, when an article stop being sold, its price must be lowered in an effort to be sold out – a significance expense for the business given current economic situation. If improvement can be done regarding accuracy, there will be less inventory of things that are not needed, which saves logistics costs. Research shows that in the past couple of years, customers focus on how sustainable oriented a business is. Thus, from a carbon dioxide emission perspective, the more efficient a business can be in their supply chain, the more positive impact will be received.
M-commerce VS E-commerce: Who Wins It All?
Most significant difference between e-commerce and m-commerce is related to the mobility and portability of the device used to make purchase. E-commerce typically requires a computer or laptop, whereas m-commerce allows customers to shop anywhere at any time as using their mobile device. When companies advertise their products or services using pictures, graphics or videos on websites, social media, and other digital platforms, it is called display advertising. It is like having a billboard on the Internet! Even though mobile screens are not the best for displaying advertisements and completing purchases can be a bit of a hassle, the fact that mobile devices are portable makes them perfect for researching products and brands. Nielsen Norman Group has conducted research on the importance of tasks performed on larger devices. The outcome states:
The data says that people tend to do important tasks on the bigger screen. In cases where the stakes are high and mistakes could have severe consequences, people may feel safer and less error-prone on larger screens.
Security is another contrasting aspect in the comparison since as most online frauds occur via credit card misuse, data breaches, and credit card theft. Fortunately, m-commerce addresses the issue. The Mastercard survey on new payments shows that 94% of consumers in the Asia Pacific region use emerging payment methods such as digital or mobile wallets. QR codes, and even cryptocurrencies to ensure secure transactions. Thus, the security level of m-commerce transactions is better than in e-commerce.
The Bright Future of M-commerce: Trends and Opportunities
The future of m-commerce appears bright due to the steady increase in mobile device usage and technological advancements. As abovementioned, this trend is driven by increased utilization of mobile wallets, integration of innovative technologies such as AR and voice assistants. As consumer behaviour evolves, retailers are adapting to remain competitive. Therefore, companies that embrace m-commerce and integrate modern technologies are more likely to succeed. Conversely, an e-commerce enterprise that fails to implement m-commerce is likely to fall behind its rivals.