With such rapid growth of m-commerce in such a short span of time, it is an obvious speculation in everybody's minds as to where m-commerce is headed. In this blog, we will talk about m-commerce trends for future and would weigh what companies need to do in order to sustain competition and grow in the mobile space.
M-Commerce is a growing sector and is booming proportionately with the boom in smartphones industry. It is estimated that by the end of the year 2017, the total number of online shoppers using mobile devices for their purchase would reach 2 billion.
A throwback at where it all started
Mobile commerce goes back to the year 1997 when it was first used to operate and pay at a Coca-Cola Vending machine by customers using SMS services in Helsinki, Finland. It was Merita bank which first launched phone-based banking services through SMS. After the successful execution of this m-commerce experience, many countries and companies decided to follow the trend and revolutionize the way business was being done. Just a year later, in 1998, world’s first digital data download through phone also took place in Finland in the form of ringtones.
Following the initiative by Merita Bank, two more commercial m-commerce platforms were set up in Philippines and Japan, named Smart Money and i-Mode respectively. By the year 2000, Norwegians could buy parking tickets, Austrians could buy train tickets and the Japanese could even buy flight tickets, all through their mobile phones. Since then, developments in m-commerce have been unstoppable.
Major Milestones in the journey of M-commerce
There have been breakthrough developments in m-commerce since the year 1997, but the industry has gained momentum only around the year 2013 with big players like Apple and Samsung introducing their own payment platforms, i.e., Apple Pay and Samsung Pay respectively. Let’s have a look here at major milestones achieved in m-commerce:
Forrester Research in their 2015 study has forecasted that the mobile payments market will touch the $162 billion mark by the year 2019. The numbers were close to $69 billion in the year 2008.
Future Trends and Challenges for M-commerce
M-Commerce has broken the barriers for a prospective buyer to be present in front of their systems. This being the biggest merit of m-commerce, users can now buy anything, anywhere and anytime. But, there is much more to m-commerce than this. Advancements in m-commerce are disrupting the traditional retail systems and are putting a lot of pressure on the retailers to adapt to this quick change or eventually die!
The online space today is flooded with apps and businesses trying to sell everything possible online. It is estimated that by the year 2020, 49% of the total e-commerce transactions would come from mobile devices. As compared to a ratio of 34% in the year 2016, it is a huge jump. The growth of m-commerce could be attributed to breakthrough features, such as in-store mobile checkout, and buy online and pick up in store.
The largest share of sales through m-commerce will be the millennial shoppers, i.e., the age group of 25-34 yr olds. The need of these millennial shoppers for a hassle-free checkout process has created a fair opportunity for the mobile wallets to flourish. The consumer would be more inclined towards using chatbots and virtual personal assistants to have a better mobile shopping experience. With consumers being comfortable with sharing all kind information including their location details, the challenge lies in securing the information and its flow.
Businesses need to transform their operating models, strategies, processes, and infrastructure into an intelligent system which could provide more personalized and relevant experiences to customers and enhance loyalty. A recent study by Bain and Company, done along with Earl Sasser of Harvard Business School, shows that a mere 5% increase in customer retention can increase the profitability by as high as 95%.
The retailers need to focus on:
The future of m-commerce is bright and it is expected that m-commerce would become a $467.3 billion market by 2019. Talking about growth, m-commerce market is predicted to grow at CAGR of 32.23% for the period of 2014-19. The major revenues are expected to come from North America and Europe, while APAC and MEA are posing to be promising regions for drastic m-commerce growth. According to a recent Goldman report, it is stated that “There will be Mobile commerce in 2018 as E-Commerce in 2013”.