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5 Ways M-Commerce is Disrupting Retail

In October 2016, mobile internet usage exceeded desktop. This was one of the most interesting statistics of the previous year, as mobile use is now so widespread that it’s far-reaching impact is impossible to ignore.

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Brick and mortar retailers are also facing significant difficulties and news stories about the closure of major brands are becoming commonplace. It goes without saying that failure to adapt to the new technological landscape can have serious consequences.

There’s more to mobile commerce (m-commerce) than just going for mobile development service to make purchases through smartphones possible. The term also includes the use of digital payment technologies, branded apps, cybersecurity, and a range of other elements.

In this article, let’s delve into five key ways that the growing presence of m-commerce is disrupting retail.

Loyalty rewards are easier to access

The growth in the use of brand-specific apps has meant that retailers are better able to manage and promote loyalty schemes. Previously, different parts of these programmes were somewhat disparate. Promotion was carried out through one set of channels, such as email or SMS, whilst rewards were collected using another, often loyalty cards.

The emergence of apps allows both customers and retailers to manage everything in one place. This means that users can be offered incentives, promotions and rewards with much greater ease. A growing number of retailers are taking advantage of this opportunity with huge success.

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Branded apps are also a key part of driving greater personalization at all stages of the buyer journey, both online and in-store.The multi-functionality of apps means that options for tailoring them to unique customer needs are more plentiful. It’s worth mentioning that 96% of companies agree that personalization is vital for success in the digital world.

Developing markets are important

It’s easy to assume that m-commerce is a phenomenon limited to the Western world, but developing countries are also seeing widespread use of mobile devices in a retail context. At the top of the list of developed countries, South Korea has the highest level of “smartphone penetration”, with 88% of the population owning a smartphone. But emerging economies like Malaysia and Chile, both with penetration at 65%, aren’t far behind.

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Data source: Pew Research Center

Journal of International Business and Marketing outlined that, “M-Commerce is expanding at a much faster rate than conventional E-Commerce which used PCs and laptops as the main tool (Narang et.al. 2016). More people in developing countries have smartphones today than PCs because they are more affordable, portable, convenient and necessary to stay in touch virtually 24/7.”

This means two things for retailers. First, it could prove a huge mistake to neglect developing markets at this early stage. Second, taking advantage of new mobile opportunities demands a genuinely global approach, that incorporates an understanding of the behavior of different markets and consumer behavior.

Omni-channel portals are vital

While mobile internet usage has increased, spending remains comparatively low. Research published by Business Insider shows that 85% of online purchases (measured by spending) are made using a desktop computer, compared to only 15% on mobile.

This is in part because there are still significant barriers to mobile purchasing from a consumer perspective. Poor integration of payment options with both apps and websites, lack of access to passwords, and the inability to compare products as easily as on a desktop computer are all frustrations that retailers are attempting to address.

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Data source: Pew Research Center

Yet, whilst spending is somewhat limited to desktop, ownership of multiple devices is growing. This includes smartphones, tablets and e-readers all the way to wearable technology like smartwatches. The trend is pushing retailers to adopt a truly omni-channel approach to designing their shopping portals. In order to cater to the widest range of preferences possible, which can often change with time and place, it’s important that retailers allow customers to buy goods with any device that they want.

People are using mobile in retail stores

Despite online purchasing representing the most common use of smartphones in a retail context, it’s also important to highlight the way that customers are using their mobile devices while shopping in brick-and-mortar stores. There is significant activity at all stages of the buying process, before and after a purchase is made.

A staggering 84% of shoppers, for example, use their smartphone to help make decisions in-store. This includes activities like comparing the prices of other products and checking a bank balance to make sure there are sufficient funds to make a purchase.

Retailers are taking advantage of this trend by offering a range of in-store mobile options. Customers in some stores can now use in-app payment options and checkout without the need to queue, see store-specific discounts and check reward balances all in a matter of seconds on the shop floor.

Mobile is creating new advertising opportunities

The growth of mobile usage has also prompted retailers to seek out and test new advertising methods. The decline of desktop internet usage (even while spending has remained relatively high) has meant that new ads, in conjunction with “traditional” browser ads, are needed to reach as wide an audience as possible.

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Data source: Emarketer

This is particularly the case for platforms that command high numbers of engaged users like social media. Facebook ad revenues have continued to grow year-on-year, while younger companies like Pinterest are quickly developing their own programmes.

One interesting area, that may point toward future innovations, is that of “shoppable purchase tags”, where buying options are embedded into social media images of products, particularly clothing. This allows users to buy without leaving the app and is one way that retailers are removing some of the obstacles to purchase mentioned in the third point (omni-channel portals are vital).

Conclusion

Despite the retail industry always being in a state of flux, now is an incredibly exciting time. It is always worth remembering that retailers are still adapting to online buying behaviour and many technologies – particularly m-commerce – are still new. By leveraging opportunities effectively, retailers of all sizes stand to benefit from the global shift to online shopping methods.

Many of these opportunities have a technical dimension and it’s vital to seek out the right expertise to properly take advantage of them. As advanced technological capabilities become more widely available and easy to implement, everyone stands to gain.

Ekaterina Prohorchik

  • Christina Miller

    The “shoppable tags” trend is an interesting one for me. I used to follow Macy’s and Kate Spade on Instagram so saw the “tap to view” option in a few posts but they never shared anything interesting enough for me to follow through with a purchase. I must admit, I do like the concept, and as long as the view/buy option isn’t intrusive to my viewing experience I don’t mind. Looking at the statistics shared here for mobile use, m-commerce will eventually become the norm for retail.