What is m-commerce?

The rise of m-commerce has made it vital for all companies to have mobile-responsive websites

A hand holding a mobile phone

Mobile commerce, also known as m-commerce, involves the use of mobile phones in retail. With mobile phone web traffic now outpacing desktop web traffic, according to Broadband Search, these handheld devices are seen as an increasingly important avenue into sales and marketing. Sales Cycle data suggests, for example, that mobile phones accounted for 53% of all online sales during 2019, and 65% of e-commerce traffic.

There’s no reason for retailers not to seize the opportunity to branch into m-commerce given the movement of traffic from desktop to mobile, with engagement in this field manifesting in several ways. Venturing into m-commerce might include accepting mobile payments, from Apple Pay to Google Pay and everything in between, as well as giving customers the ability to download content, such as music or services, or even shipping physical goods to an address.

M-commerce goes beyond selling products and services online, however, and spans the breadth of mobile technologies powering these processes, also involving fintech companies like PayPal, or other payment gateway firms like Stripe, Square and World Pay. M-commerce can also include using a smartphone to complete a payment in-person and in-store by tapping your mobile device on a wireless terminal.

Exploiting this avenue may involve updating the features on your website to include optimising the sales process for mobile phones, from a user experience (UX) point of view, with larger buttons, for example. Optimising websites also entails offering customers a seamless and flowing journey, with the capacity to browse and make purchases without encountering any bugs or glitches. The process must involve understanding how people navigate around your site, the journey they take and coming up with ways to improve the overall shopping experience while making purchases through smartphones.

The rise of m-commerce

The concept of using mobiles to shop was first coined as m-commerce in 1997, with its definition stated as, "the delivery of electronic commerce capabilities directly into the consumer's hand, anywhere, via wireless technology", but the use of mobile devices as a way to make smarter purchase decisions and make payments has evolved substantially since then.

A decade ago, few would have thought that we could pay for products via our smartphones through the use of mobile payments technology, or use apps to order our weekly shopping on the bus home with web speeds nearly as good as our home broadband.

In the last few years, m-commerce has grown substantially. At the beginning of the year, eMarketer revealed m-commerce accounted for 6% of global total retail sales and nearly 60% of e-commerce. This is following a 40% year-on-year increase of the technology in 2017. Global m-commerce sales increased by 40.3% year-on-year in 2017, totalling $1.357 trillion (980 billion) and making up 6.0% of total retail sales.

"A greater dependence on mobile devices, namely smartphones, is having a positive effect on retail m-commerce sales globally," said Monica Peart, eMarketer's senior forecasting director. "This trend is evident in more frequent mobile shopping sessions and higher spends per session, both hallmarks of a growing expectation for mobile devices to satisfy a variety of consumer shopping needs."

Web-based m-commerce

M-commerce has made it vital for all companies to have mobile-responsive websites that adapt automatically to the size of the screen, allowing mobile experiences to exist alongside a desktop shopping experience.

Smartphones and tablets accounted for 69% of UK online retail sales in Q3 of 2017/2018 (November 2017 to January 2018), according to UK online retail association IMRG's IMRG Capgemini Quarterly Benchmarking report.

App-based m-commerce

More and more these days, retailers rely on mobile apps to reach customers, replicating the experience of being inside their store for people when they're waiting for trains, eating their lunch or at other idle time. Often when a customer visits a retailer's website via their smartphone, the retailer will redirect them to their app store so they can download the app.

Retailers seem to be getting it right: commerce marketing firm Criteo found that mobile apps perform far better than both desktop and mobile websites when it comes to pushing customers to purchase something, boasting a better conversion rate than the others. This reflects the richer and more personalised shopping experience retailers are bringing customers via apps.

M-commerce is definitely a growing part of retail, but it's important that retailers meet and surpass customers' expectations of their digital shopping experiences. This means providing them with a quick responsive interface that is personalised to their tastes, as well as embracing other technology to make it easier to find and pay for products, such as mobile payments, while alleviating any security concerns customers may have.

M-commerce during the pandemic

Over the last few years, retailers have worked to expand their mobile presence and this shift was even further accelerated by the COVID-19 pandemic and subsequent lockdown measures.

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With the closure of brick and mortar shops and heightened budget consciousness due to the financial crisis, the traditional high street shopping experiences gave way to seemingly endless scrolling. In fact, by April 2020, the average user was spending over a quarter (27%) of their daily waking hours on their mobile device – and what better way to spend that time then by shopping? Only a few months later, mobile analytics company App Annie recorded that UK retail sales made via mobile had increased by 30% since the first quarter of the year, with consumer spending on mobile increasing to in excess of $50 billion (£35 billion) in the first half of 2020.

Last year’s success of m-commerce could also be credited to food delivery apps such as Deliveroo or UberEats, which became a key feature of the lockdown economy as the UK government shut down restaurants and advised consumers to have goods – particularly food – delivered to them at home. This resulted in unprecedented demand for some takeaways, with Domino’s Pizza, for example, being forced to implement a queuing system for its online customers as well as recruit additional delivery drivers.

While the pandemic saw most businesses struggle, m-commerce undeniably thrived in the chaos. This prompted HM Treasury to consider introducing an additional tax for online retailers such as Amazon, in order to help the UK recover from the financial strain of the COVID pandemic.

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