What is holding mobile commerce back?
By Eric Holmen
For some time, the mobile industry has been waiting for an explosion in mobile commerce, with the vision of a Utopian era when everyone makes purchases, processes payment and generally conducts all day-to-day business transactions entirely within the mobile space.
Conventional wisdom says that day should be here already, or at least very close. Statistics on mobile phone usage and ownership seem to back this up: 82 percent of U.S. consumers own a mobile device of some kind, and 42 percent own a smartphone.
Mobile usage rates continue to grow by double digits every year. Last year, the usage in the over-65 demographic increased the most – by 65 percent, according to Nielsen research.
But even with this incredible amount of mobile saturation, and even with unprecedented numbers of consumers growing more comfortable with using their mobile devices beyond phone calls, the golden age of mobile commerce has yet to arrive.
So what is holding us back? The short answer is nothing, and many things.
We may never see an honest-to-goodness explosion in mobile commerce like we did with ecommerce.
Rather, in an interconnected and blurry age of mobile computing – bound to become even blurrier with the projected pop in tablet computers – it might be more reasonable to expect a gradual shift from ecommerce to mobile commerce that does not really feel like a shift at all.
With the development of the mobile Web it seems less likely that a mobile commerce infrastructure will emerge wholly apart from the existing ecommerce infrastructure.
Yet this does not mean that mobile commerce is doomed to be a simple extension of ecommerce. Nor does it mean that certain components of mobile commerce are developing in innovative and unique ways – yet.
The good news is that attitudes about mobile commerce have evolved favorably in the past few years.
According to Harris Interactive, 50 percent of mobile users would be comfortable booking hotel rooms and buying airline and entertainment tickets through their mobile phones. The number of hotels and travel-related companies now considering mobile offerings would seem to back up this data.
While information security remains a major concern for users considering mobile commerce, data points to an improvement in the public perception of mobile data security. The same Harris poll indicated that 26 percent of users feel that mobile shopping is “completely safe.”
But the simple fact that questions about data security crop up in surveys such as this – not that data and payment security are fait accompli in the ecommerce realm, but these concerns have been largely addressed in the past decade – indicates that this remains a stumbling block for mobile commerce.
The development of a universal secure payment protocol, or at least a proliferation of viable competing protocols, would make a significant difference in the participation rates in mobile commerce.
Mobile comfort, then commerce
Security measures specific to the mobile space will evolve in tandem with the evolution of mobile-specific commerce options.
The best examples of these are mobile applications, which took the world by storm in the past 18 months. Streamlined to bypass the annoyances of manually accessing the Web on a mobile device – and thereby creating a true mobile Web – applications are increasingly the portals through which mobile commerce is conducted.
Mobile commerce-centric applications will continue to evolve and attract more users. Through these genuine mobile security initiatives will begin to take shape.
The bad news is that lagging consumer comfort along with an industry that has yet to find a solution to security and privacy concerns is holding the mobile commerce explosion back, as is the possibility that there will not be an explosion at all.
All of these indicators, however, are trending positive for the champions of mobile commerce.
Consumers are getting more acclimated to making purchases on mobile devices. The natural evolution of the industry in the direction of mobile commerce is spurring advances in data security. And the rise of commerce-centric applications is setting the stage for a very real mobile commerce explosion.
- Eric Holmen is president of SmartReply Inc., a mobile and relationship marketing firm in Irvine, CA. Reach him at [email protected].