How Brands Are Using M-Commerce

[This post was originally written on Social Media Today and was published on June 27th 2011. You can read the original article here.]

Smartphones continue to be increasingly popular with consumers; sales for 2011 are expected to increase from 305 million to 472 million. This presents brands with tremendous potential to leverage smartphones for M-Commerce and personally engage with consumers wherever they are, something that brands have not been able to do before. Brands have the opportunity to be ubiquitous, relevant and individualized to their consumers whenever and wherever the consumer chooses.

Scope

Much of the coverage of M-Commerce features FoursquareGroupon and Facebook Places. We wanted to see what else is happening in the space and how brands are engaging consumers. For this report we have considered tablets as part of M-Commerce. Indeed according to a recent Forrester report, tablet-based commerce could be the single biggest inhibitor to the growth of M-Commerce.

There are numerous definitions of M-Commerce, some more restrictive, and others more encompassing. For this report we define M-Commerce into 2 components:

  1. The use of a mobile phone or tablet to conduct financial transactions and payments online
  2. The delivery of information to a mobile phone or tablet that can facilitate a purchase

Growth of M-Commerce

M-Commerce sales have experienced huge growth in the last couple of years, from $1.2 billion to a projected $9 billion in 2011 and are expected to hit $31 billion in 2016. For me the key driver of M-Commerce is convenience. Mobile phones are a part of our daily engagement with our world, whether through calls, text messages, emails or apps. In terms of shopping, the convenience and immediacy comes across clearly when looking at some of the most popular activities for using mobiles from a recent study by Google of US smartphone users:

  • 74% of smartphone users end up making a purchase (76% in-store; 59% online via a computer; 35% via a phone)
  • 70% use a smartphone while in the store
  • 54% use a smartphone to find a retailer
  • 49% use a smartphone to compare prices
  • 48% use a smartphone to get promotions and coupons
  • 44% use a smartphone to read reviews and product info
  • 34% use a smartphone to search in-store inventory

The full results from Google’s study can be viewed on slideshare.

How are brands using M-Commerce?

Driving transactions is an important goal of M-Commerce, but with mobiles and tablets continuously used by consumers irrespective of where they are, they also become important marketing tools for brands. We are interested in what is happening away from the location and deal-based M-Commerce services that Grouponand others provide, and looked at a number of ways that brands are using mobiles and tablets to continuously engage consumers:

1.       Ensuring a mobile-friendly website

With more people accessing websites through their phones it should be a high priority for brands to create a mobile-friendly website. This is what Dunkin’ Donuts have done, adding a trip planner, restaurant locator and information (opening hours, wifi, drive-thru availability), menu, nutrition information, and integration withTwitterFacebook and YouTube. They have also begun to geo-target content (local promotions, new products, news) based on a person’s location.

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2.       Engagement and Loyalty

Brands are adopting mobile strategies that go beyond a focus on transactions to also include loyalty, engagement and relationship building activities. This is the strategy that Sunkist has adopted. As mobile shopping is unlikely to work yet for selling fruit, they focus instead on educating people, building loyalty, engaging customers and increasing awareness for their brand and for citrus fruits. They do this in 2 ways:

  1. Sunkist Daily Diet offers ways to track calories and exercise, create a food diary, and search nutritional facts and tips
  2. Their mobile website aims to engage consumers at the point of purchase by providing fruit-based recipes. It also provides nutritional and fruit information, healthy living tips and a shopping list feature.

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3.       Product Reviews and Purchase

The experience of shopping online is nothing like walking down the high street, stopping at occasional windows or going inside to browse. There is an opportunity for brands to improve the user experience and design of shopping on mobiles and especially tablets. The closest any brand comes to replicating the traditional shopping experience is Amazon’s fluid Windowshop app. All the usual Amazon features are included: product reviews and features, wish lists, DVD and music previews or trailers, the ability to manage your account and track orders, and integration with Facebook and Twitter. Unfortunately the social element of logging in with Facebook Connect is missing.

 

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4.       Price Comparison

 

One of the worst parts of shopping online is the range of sites to visit when searching for comparison prices. Thankfully there are a number of apps that does this for consumers. While brands like Target can provide price and stock information across their stores, comparing prices across numerous retailers is something that 3rd party apps are better capable of doing. For travel CheapOair provides comparison and booking features for flights, hotels and car rentals. For retail products two of the leaders are Amazon Mobile and PriceGrabber. Both apps have a similar set of features – search for specific products, read reviews, ratings, compare prices across retails, and the option to share products by email, text, Facebook and Twitter. An advantage that Amazon offers is the ability to scan a barcode, take a photo, type or say the product name and receive comparison prices from Amazon and other retailers.

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5.       Point-of-Sale Payment

There are a couple of ways that brands are offering point-of-sale payment options. Pizza Express, the UK restaurant chain, launched an app in June 2011 that allows customers to use a 12 digit code on their receipt to pay for their meal via PayPal, as well as book tables and view menus. Port’s Tea and Coffee Co. pursued an alternative method by using Square’s Card Case. Customers have 2 payment options. They can set-up a virtual tab with their credit card details, pay with the press of a button on their smartphone and receive a receipt by email, or they can swipe their credit card through an iPad accessory and sign with their finger.

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What can brands do to take advantage of the M-Commerce trend?

I think there are 3 steps that brands can follow to create take advantage of the M-Commerce trend:

  1. Create great user experience. If brands don’t need an app like Target then at least provide a mobile specific site. Sites optimized for mobiles do not always translate well to a smaller screen
  2. Create great consumer experience. Amazon got this right with Windowshop. It is not only a beautiful app but it covers nearly every feature that consumers expect. I would expect them to add sharing the Price Check feature from their mobile app in future versions.
  3. Incentivize use. Brands want to make sure that they are available and relevant to their consumers at all times. This could be done by engaging daily like Sunkist’s Daily Diet app or ensuring easy purchase options and location-based information and deals.
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