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2010 mobile commerce movers and shakers

There were some very noteworthy accomplishments in the mobile commerce ecosystem in 2010. Here’s a look back and 2010.

EBay’s mcommerce empire
The entire industry was affected when eBay announced it expects to generate $1.5 billion via mobile in 2010.

“We clearly see that people want to shop on the go – last year we saw $600 million in eBay merchandise volume come through mobile devices and we expect to more than double that this year with $1.5 billion,” said Steve Yankovich, vice president of mobile at eBay, San Francisco, CA.

Then news arose that eBay and Amazon dominate 70 percent of the mobile commerce market. Panelists at Mobile Marketing Day 2010, cohosted by the DMA, Mobile Marketer and Mobile Commerce Daily confirmed it.

2010 is most notable for people showing their willingness to buy goods and services via their handsets, and not just ringtones and wallpapers, but everything from books, movies and music to tickets, flatscreen TVs, fashion apparel and even cars.

Alex Barza, New York-based mobile ad sales lead at Google, Mountain View, CA, was quite bullish on the mobile commerce arena, earlier in the year.

“I was blown away that someone bought an actual Corvette on eBay mobile for $75,000,” Mr. Barza said. “A lot of clients across the board are starting to experience sales from mobile devices and are seeing incremental growth of users accessing their Web site from mobile devices, which is leading to sales.

“Consumers want this—they want the stuff that they want when they want it, and mobile enables them to buy it now,” he said. “Having a mobile-optimized site aids that process, because it provides better customer service, but there are some sales happening via mobile on non-optimized sites.

“There will be Flash on all Android devices later this year, with pinch and zoom and fast connectivity.”

Approximately one in five adult mobile phone owners in the United States use their handset for mobile commerce, according to the Mobile Marketing Association’s May 2010 U.S. Mobile Consumer Briefing.

The survey found that 17 percent of respondents used their mobile phone to buy applications, ringtones and other content. However, 6 percent used their phone to receive coupons or discounts and 6 percent used their mobile phone to purchase physical goods or non-mobile content or services.

The MMA’s study confirmed that mcommerce has graduated to include more than just the purchase of digital content for the mobile phone itself.

“We now have clear evidence that the consumer’s mobile phone is becoming their ‘second wallet,’” said Peter Johnson, vice president of market intelligence and strategy for the MMA, New York. “Mobile-based transactions have moved beyond buying ringtones, games and etcetera for the device itself to using the mobile phone to buy just about any kind of product conceivable. 

“In other words, the mobile phone isn’t just a delivery purchase for, it is something you purchase with,” he said. “Second, we’re seeing confirmation of this in the growing integration of external financial platforms into the mobile payment process.

“PayPal and mobile access to bank accounts and credit cards are gaining ground on the surcharge to the carrier statement.”

Mobile payments
EBay Inc.’s PayPal launched an integrated mobile commerce platform through PayPal’s merchant channel earlier in the year.

The new mobile commerce offering enables millions of PayPal merchants and Appcelerator’s 77,000-plus Web developers to build native commerce applications across handsets, tablets, connected televisions and other devices, including Apple’s iOS, Google’s Android and Research In Motion’s BlackBerry.

The growth of mobile payments in the United States has stalled largely because the market’s diverse stakeholders have been unable to build compatible business models. But is the tipping point at hand?

The various players’ unwillingness to work together has further slowed the integration of supporting technologies such as Near Field Communication into handsets and has delayed merchant adoption of acceptance devices.

Isis may change this.

AT&T Mobility, T-Mobile USA and Verizon Wireless have formed a joint venture called Isis, a national mobile commerce network that will let consumers use their mobile phones to make point-of-sale purchases.

The initial focus of Isis will be on building a mobile payment network using smartphone and NFC technology to streamline the payments process for consumers and merchants. Isis expects to introduce its service in key geographic markets during the next year.

 “In the mobile payments industry, there hasn’t been a technology hurdle, it has been an ecosystem issue that has caused the failure to launch at scale,” said Jaymee Johnson, spokesman for Isis, New York.

“We are bringing 200 million consumers to the merchant community, and for merchants, it’s important that this is not a card on a phone,” he said. “We’re tackling everything that is in your leather wallet, driving a simpler user experience into consumers’ handsets.

“We have a network of pretty strange bedfellows, but it was the merchants that brought us together—they said ‘we can’t have a fragmented ecosystem—we need scale,’ and we realized that we need a common platform to drive scale for consumers and merchants and create an ecosystem that is necessary to drive the rest of the market.”

Mobile has emerged as an important new shopping channel and is expected to be used for a growing amount of purchases in 2011.

Consumers are turning to their mobile devices for smarter shopping by doing price comparisons, staying on top of all the best deals and ultimately making purchases from the convenience of wherever they are. This trend will continue in 2011.

“Shoppers today are looking for retailers to get into their shoes and add some value in every way,” said Laura Davis Taylor, vice president of global retail strategies at Creative Realities LLC, Hasbrouck Heights, NJ.

Convenience is also a factor, per Amanda Pires, senior director at PayPal, Palo Alto, CA.

“With the convenience of shopping from a laptop or mobile phone, more people are choosing to avoid the long lines, parking chaos and early morning rush in exchange for great online deals available from the comfort of their homes,” Ms. Pires said.