A little backstory…

A year or so ago I was telling clients NOT to invest in mobile websites.  Why?  Because there was no ROI in ecommerce from mobile development.  Sure, everyone’s been talking about mobile commerce as the greatest thing since sliced bread…for about 5 years now!  That’s great and all, but the money just wasn’t there for anyone but the top 50 brands.

That’s all changing…

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“…we’re seeing some of our clients hitting 10% and up to almost 20% of their traffic from mobile devices. This is a drastic change from a year ago.”

The fact is that 87 percent of the world’s population now has mobile phone subscriptions. This brings the total to right around 5.9 billion people worldwide. This figure will only go higher in the foreseeable future considering that mobile phone sales are still on the rise. Android is growing at a rate of a staggering 886 percent per year, and activates 160,000 new mobile devices per day. In the US, with 9 out of 10 people owning mobile phones, individuals are more likely to own mobile phones than books! With these statistics alone, why wouldn’t e-commerce enthusiasts consider in investing in good quality mobile apps, or upgrading their website to be mobile-friendly? Well, the fact of the matter is that mobile ownership doesn’t necessarily mean that much if it doesn’t entail mobile internet usage.

According to The ITU, there are currently 1.2 billion mobile web users all throughout the world. In other words, 17 percent of humanity is accessing the internet through their mobile device! In relation to this study, Starcounter claims that these mobile web users account for 8.49 percent of website hits. In addition, most of these mobile web capable devices are smartphones.

rate of growth

Ok, let’s look more practically at the phones that will be widely used to make purchases: the smartphone.  At the current rate of growth, eMarketer estimates that smartphones in the US will number more than 115 million units by the end of 2012. Several studies agree that more than 50 percent of these smartphone users will use the devices to make actual purchases, and a similar, albeit smaller, percentage will use these devices to help them make an informed decision while considering the purchase of an item.

To add some real world experience, we’re seeing some of our clients hitting 10% and up to almost 20% of their traffic from mobile devices.  This is a drastic change from a year ago.

E-commerce on mobile devices most commonly takes two forms. The first, mobile applications, apps for short, are typically very company controlled. The developer often uses the app to create memorable customer reactions like games. Applications however, also typically have a shorter lifespan when compared to the alternative form of m-commerce, the mobile website. Mobile websites basically make the developer’s traditional website mobile friendly. This form of m-commerce is mostly used by e-commerce retailers, since this form offers more transactional abilities than mobile apps. To make the deal of investing in m-commerce opportunities even more appealing, a study by Mobile Commerce Daily claims that 41 percent of e-commerce merchants using the mobile platform have seen positive returns on their investment. Moreover, this number is even likelier to grow, considering that 32 percent of the percent measured didn’t even look into the return of their investment.

Entrepreneurs interested in utilizing m-commerce for their businesses, should consider a few things to insure a return on their investment in mobile devices.

M-commerce and e-commerce are similar in a very fundamental way. A good measuring point for the effectiveness of both approaches is to measure the traffic and time spent on a website. Even if the customers are not making actual purchases on their mobile devices, this doesn’t mean that the company doesn’t get any benefits from their visiting the website. Getting attention is also a part of effective marketing. The fact that the market knows a company even exists is already a relatively positive step in terms of marketing. However, if you are utilizing m-commerce and want to improve your interface to make the customer’s experience all the more pleasant to improve his retention and opinion of the company, simplicity is still the key. Studies show that m-commerce shoppers are more directed and have little patience for complexity. How much is the product? Does the company offer free shipping? Are there any product bundle deals? When they go online to check on a product or service m-commerce shoppers want to know the prime considerations for their purchase as quickly as possible.

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Every merchant should consider all their options for marketing and distribution. M-commerce is simply one of them. However, according to the statistics, m-commerce will also be one marketing and distribution outlet that will definitely show massive growth in future markets. Take advantage of all marketing options available, be they digital or physical!