Is Mobile the Next Frontier In Online Shopping?

Retailers in all product categories have a place in mobile commerce. For mobile commerce to gain critical mass, consumers must be able to at least access the Internet from their mobile phones.

We recently spoke with eMarketer senior analyst Jeffrey Grau about the state of m-commerce.

eMarketer: When do you think mobile commerce will gain mass adoption in the consumer market?

Jeff Grau: I do not have a measure for mass adoption, but I would say that m-commerce will take a big leap forward this year.

Smartphone ownership, led by the iPhone, is growing rapdly, and recent research from Compete found that 37% of smartphone owners purchased merchandise via their phones in 2009.

One of the m-commece applications that I expect to explode first involves shoppers who take their smartphones with them inside stores. When they find an item of interest they will either photograph or scan its barcode and then price compare via other online retailers. In-store shoppers will also use their phones to to get customer reviews and other product information to help them make purchase decisions.

eMarketer: What sort of products do you currently see consumers buying via their mobile phone?

Jeff Grau: The evolution of mobile commerce is similar to the development of e-commerce. Today, people are most comfortable using their phones to buy services such as travel, event tickets and pizza delivery and media products such as books and music. These types of products were also the first ones to enjoy e-commerce success. As people gain confidence in the mobile commerce shopping process and retailers improve their technology and become smarter in marketing and merchandising to mobile consumers, categories such as apparel, health and beauty products and consumer electronics will likely catch on via mobile phones.

The products best positioned to enjoy m-commerce success are those that have time sensitivity, such as when friends are out to dinner and on the spur of the moment decide to go to the movie theatre. Or a person is in a taxi on the way to the airport and realizes he forgot to buy a gift for his parents’ wedding anniversary. So what he does is order flowers to be delivered to them.

eMarketer: What payment options are currently open to mobile users?

Jeff Grau: There’s PayPal, of course and Gemalto and many startups as well. Others include BOKU, Zong and, Obopay.

It’s a fragmented space, not just globally but even in the US. That said, it’s also one where there is a lot of exciting innovation going on. Too soon, I’d say, to determine which solution(s) will win out.

eMarketer: How many businesses currently have m-commerce sites? Is this set to grow this year?

Jeff Grau: As of December 1, 2009, Internet Retailer reported that 10% of retailers boast a mobile commerce Website. Is this set to grow? Absolutely. Internet Retailer’s survey reported that of those that do not, 41.6% plan to launch one within the next two years. The percentage of retailers with a mobile shopping app is likely to be smaller, but I do not have an available number.

Related

• iMedia Connection: The rising stars of mobile marketing
• Business 24/7: Mobile payment solutions firms eye Middle East
• Ventur Beat: Zong’s credit-card based mobile payments system is growing fast
• Case Study: The Digital Approach to Retail — Online and In-store