M-Commerce 101: All You Need to Know

M-Commerce 101: All You Need to Know

calendar-icon

03 August 2022

By attalime

Mobile commerce is now becoming part of daily modern life. It allows people to shop for goods and services to pay for them. No wonder m-commerce applications have vastly grown to be an everyday part of the lives of most consumers. For businesses, integrating m-commerce into their business model or improving their existing m-commerce services should be a priority. 

Well, having an m-commerce app is an important strategy for many businesses – particularly retail – who want to remain competitive and win customers. But if you still wondering about anything good about m-commerce that you can apply to your e-Commerce store? And what’s the difference between m-commerce and e-commerce? You will get answers in this article. Let’s deep dive! 

What is Mobile Commerce? 

Mobile commerce, also known as m-commerce, is transactions between buying and selling goods and services through wireless handheld devices such as smartphones and tablets. Another definition of m-commerce, according to Investopedia, m-commerce involves using wireless handheld devices like cellphones and tablets to conduct commercial transactions online, including the purchase and sale of products, online banking, and paying bills.

Mobile commerce is called next-generation e-commerce because it allows users to access the Internet and make transactions on the go. Even though it contains words of commerce, m-commerce encompasses a much broader realm, not only retail but including banking, ticketing and travel, health services, and more.

According to Sprout Social, mobile commerce is beyond direct purchasing. Activities associated with mobile commerce also include engaging with mobile ads, communicating with sales reps via smartphone, and researching brands on a mobile device. And that’s the importance of mobile commerce because brands with a solid mobile presence can reach customers anywhere and anytime.

M-Commerce in Numbers 

Before we dig into the details of mobile commerce, let’s have a look at the latest trends and predictions for m-commerce in the market. 

Mobile e-Commerce Sales Growth

According to Statista, m-commerce sales up to US$3.56 trillion by the end of 2021. It shows an increase of more than 22.3% of total sales compared to 2020 – US$2.91 trillion. And the fact is m-commerce growth statistic has seen average growth of 33.1% annually. 

Meanwhile, there has been a huge increase in m-commerce sales, up to 72.9% or almost three-quarters of total e-commerce sales in 2021. Or it has increased by 28.1% since 2016 market share of 52.4%. 

Another interesting fact is Insider Intelligence predicts m-commerce volume to hit US$620.97 billion, or 42.9% of e-commerce, in 2024. Two key devices are driving the m-commerce revolution: smartphones and tablets. 

The Difference between M-Commerce and E-Commerce 

While the world of the web and mobile devices are based on the same basic principles and aim to make people’s lives easier, there are some key differences between e-commerce and m-commerce.

Location tracking 

Due to a lack of portability, e-commerce location tracking is limited. However, the m-commerce app can track and identify your location using GPS technology, Wi-Fi, and more. As a result, m-commerce apps can provide location-specific content and recommendations. Notifications allow local businesses to offer discounts to customers in specific locations.

Mobility

E-commerce stands for Electronic Commerce, where purchases are processed over the Internet. E-commerce activities are typically performed using desktop computers and laptops, so users must find a place to complete transactions. Considering the size and how you use the desktop or the laptop, it is inconvenient compared to mobile phones. 

M-Commerce means the use of mobile devices. This way, you can do business anywhere if you can access the Internet on your smartphone and make transactions with your fingertips on the screen. Instead of purchasing with a plastic card, mobile wallets such as Apple Pay and Android Pay allow users to pay using their smartphones, tablets, and smartwatches.

Security

Security is a crucial part of every transaction on the Internet. Credit cards are the most common payment method in e-commerce. However, consumers are still afraid or doubt sending their credit card numbers over the internet. Studies show that Americans are concerned about online security and privacy, and that’s the challenge of e-commerce. 

On the other side, the security features of mobile commerce are rather extensive. In addition to the standard security measures in e-commerce, such as two-factor and multi-factor authentication, m-commerce can also provide biometrics (using retinal scans, facial recognition, or fingerprints). 

Type of Mobile Commerce

Mobile commerce comes in different types. And here are the six types of mobile commerce ​​services that aren’t just limited to shopping apps. 

Mobile payments

A mobile payment app, also known as a digital wallet, is an app that allows you to link to your bank account and make quick and secure purchases using your mobile device. Mobile payments include Apple Pay, GoPay, LinkAja, Dompetku, etc.

Mobile point of sale (POS)

Mobile point-of-sale systems allow stores to receive payments from customers who pay on mobile devices and process transactions. It often includes contactless payments, and the associated system consists of software, payment processors, and hardware.

 

Person-to-person mobile payments

​​People can exchange money using the inter-personal or peer-to-peer (P2P) payment app. Whether splitting your dinner invoice, donating, or paying rent, the P2P mobile payment app connects to individual bank accounts to exchange money. The most popular apps include Venmo, PayPal, and CashApp.

 

Mobile shopping

The two most popular mobile shopping services are apps specifically designed for shopping and websites designed for mobile first. However, mobile shopping also includes social platforms with Shopping features like Pinterest, Facebook, and Instagram, allowing users to make purchases from online stores.

Fintech: mobile banking and investments

Mobile banking and investment apps give users access to bank accounts, payments, investment management, loan repayments, and other financial services. The most popular fintech in Indonesia are GoPay, OVO, Bibit, Ajaib, GoTrade, IPOT, etc.

How does Mobile Commerce Work?

If we talk about m-commerce, it seems the working system is simple. You might think just connect the smartphone or mobile device with a wireless network to make online product purchases. Well, it’s true, but let’s talk about how M-Commerce applications and services work.  

  1. Users access m-commerce applications and services from their mobile devices with an internet connection. For example, using a smartphone, cellphone, or tablet that is connected to the internet network.
  2. Users access the desired online store, search for the desired product, add it to a virtual shopping cart, as with e-commerce in general, and then proceed to the online payment process. This payment involves a management system for retail transactions (Retail Transaction Management System), which involves the bank where the consumer becomes the customer. There is a PIN, SSL, and user login for authentication and increasing the security of electronic transactions.
  3. All processes are online with a mobile internet connection. So keep the information shorter, simpler, and to the point, considering mobile displays are generally more straightforward and limited than desktops.

The Advantages of Mobile Commerce

You might already know the basics of m-commerce after reading the explanation above. Now, let’s look at the benefits of mobile commerce applications for businesses. 

The Pro and Cons of Mobile Commerce

Complementary the offline store

Online shop sales benefit not only from mobile commerce but also from fixed transactions. Many customers still come directly to your store and select items but still want to see more online reviews of their products. Or vice versa, use your mobile commerce to inspect products, customize colors and sizes, and check for stock at a nearby store. In short, mobile commerce helps retailers and brands grow sales in online and physical stores by reaching a wider variety of customers.

Whether it’s launching a new product or trying to enter a new market, it’s clear that mobile commerce gives retailers a significant competitive advantage. The access and customer data that mobile commerce can provide is an excellent source of information for increasing market share.

 

Wide coverage and accessibility 

Mobile commerce allows companies to expand their market and get potential sales opportunities. In fact, according to We Are Social, the number of people who own a smartphone in 2022 was 5.32 billion, or 67% of the current world population. 

In Indonesia, 370.1 million people own a smartphone, or almost every person has a smartphone that becomes your potential customer. It means many opportunities for generating and nurturing sales leads, especially with m-commerce, allowing customers to access your offer from their phones anywhere, even on the go.

It is different if we compare it to traditionally purchasing products – at brick-and-mortar stores. A customer must visit the store, browse items, and stand in a line to pay. But they can save their time and energy by shopping on your m-commerce website through their fingertips. 

 

Valuable and insightful customer data 

One of the essential benefits of m-commerce is collecting consumer data and gaining better insights into the customer journey. It distinguishes m-commerce from buying in a brick-and-mortar store. In a physical store, customers come to the store to shop and then leave, and just a few details are recorded and stored for statistics and analysis. But with mobile commerce, businesses connect with customers as soon as they visit the store, review products, and make purchases. All of these are valuable signals, from intent to buy to order and learn more about the habits and preferences of your target audience.

However, for business, knowing your customers is critical to the success of your offer. And we might already see companies doing everything they can to reach out to their customers with the right messages at the right time. Mobile commerce can easily provide basic demographic information, shopping history, and location to forecast trends and understand customer shopping patterns.

 

Targeted the customer at the right time 

Mobile commerce allows businesses across different industries to reach customers with the right message at the right time. The perks of mobile commerce apps compared to web commerce is that you can send a push notification when users are browsing for an item and tell them that a new product version will be available in a few days. 

And suppose you notice someone is shopping at your online mobile apps but did not finish the purchase. In that case, you can also remind them with push notifications or email marketing to complete the purchase by sending a personalized promotion. Besides, you can also take advantage of geo-tracking on mobile apps and programmatic advertising to connect with consumers during specific moments in their day. 

 

Fast browsing and transactions 

Time is money. As a result, businesses are looking for ways to help their customers have a faster and more convenient shopping experience. Providing fast and secured transactions to customers is one of the most significant benefits and one of the driving forces behind the growth of mobile commerce. 

Read more: Progressive Web Apps. The Future of Mobile

The Disadvantages of Mobile Commerce

Mobile commerce also comes with disadvantages. And let’s glance at some disadvantages of m-commerce so you can get a better perspective in making decisions about using m-commerce or not. 

 

Fierce battle market 

In recent years, many companies have shifted their focus to investing and succeeding in mobile commerce. It means that you have to face thousands of existing competitors along the way. You must find a targeted or niche market suitable for your product or services to gain a competitive advantage. 

 

Risk of advertising fraud  

Advertising fraud still remains the most extensive prejudice in mobile commerce. On the other hand, most companies are not ready to address this risk. According to HuffPost, more than 60% of marketers still lack active fraud prevention in their mobile marketing. 

One of the ways to solve this problem is for companies must comply with MRC (Media Rating Council) and TAG (Trustworthy Accountability Group) standards. This compliance is the first step to showing your customers that you are aware of mobile advertising scams and are taking steps to stop them, and at the same time, it can boost your brand safety. 

 

Customer privacy 

When customers give more access to their data, m-commerce companies have greater responsibility for protecting their customers’ personal data. As m-commerce, you must ensure that your company and partners comply with strict user protection requirements. Second, give your customers transparency about what and how data is shared, collected, and stored. 

 

Limited personalization 

Online shopping and mobile commerce are still considered to have limited personalization. As a result, businesses are making even greater efforts to reach their customers. Providing customers personalized messages and rewards based on birthdays and preferences is part of a suggestion to increase attribution and gratitude. 

That’s why mobile commerce should be seen as an enhancement to the traditional shopping experience, not an alternative to eliminate the limitations. One of the best ways to deal with mobile commerce inside and outside is to create mobile-first websites or mobile shopping apps that enable you to connect with consumers and differentiate yourself from your competitors. 

Mobile Commerce Best Practices

Mobile commerce has become common practice for businesses, especially retail companies, because of the opportunity to deliver a better customer experience, personalization, better impression on your customers, and of course, gain or increase sales and revenue. But you must realize that creating mobile shopping experiences requires strategic design and user experience. And here are the best practices for a successful mobile commerce business. 

Mobile Commerce Best Practices

Simple UI/UX and fast site loading speed

Every customer or user always demands a fast and responsive site loading. That’s why slow site speed is a proven conversion killer. And as a mobile commerce owner, you need to have a fast site speed by disappearing menus to crowded product pages. 

According to Google, here are the tips for better mobile UX:

  • Highlighting main product categories on the homepage
  • Insert a homepage search bar to reduce needless browsing 
  • Implement “hamburger-style” dropdown menus with the images to help direct traffic
  • Be clear about product descriptions or require visitors to tap through to see it

 

Easy product search and personalized suggestions

For m-commerce, showcasing all your products and services on a tiny mobile screen is quite uncomfortable. That’s the reason you need to ensure an intuitive filtering and search system that allows mobile users to narrow their search and look for products that meet their specific needs. You can also provide personalized product suggestions based on shopping behavior and preference. 

For example: 

  • Use the ‘people also bought’ feature that shows what products pair well with the one in your cart. 
  • To speed up searches, consider providing auto-fill suggestions in the search history.
  • Make sure that the search results are reliable and accurate.

 

Simplify the checkout stage

For e-commerce businesses, including m-commerce, checkout is the most delicate phase of the purchasing process. And this is reinforced by research by Statista that 82% of retail shopping paths stop at the cart. 

The reasons for the cart abandonment are hidden shipping costs, using the cart as a wishlist, and comparing prices. Besides, perceived a lack of safety was also the reason even research conducted in 2019 no longer finds this motivation as the primary one.

Having fewer bottlenecks during the checkout process is better by requiring fewer form fields to collect customer information. Besides, here are the tips for minimizing cart abandonment:

  • Reduce the number of confirmations between the process of adding a product to a cart and completing a purchase
  • Allow users to check out the products using a guest account
  • Provide as many payment options as possible
  • Provide crystal clear shipping costs before checkout

 

Floating add-to-cart

If you realize, the add-to-cart button is quite impactful to the conversion. One of the effective ways is adding a floating add-to-cart button. The floating add-to-cart button remains at the bottom of the screen as the user scrolls up and down the page, but it fades out when the static add-to-cart button becomes visible. 

According to Adobe, businesses can increase cart rate and revenue per visitor (RPV) by adding this feature. RPV is a metric calculated by dividing the total revenue earned during a determined time period by the number of visitors during the same period. 

Meanwhile, cart rate is the percentage of visitors who put at least one product into their shopping carts. Both RPV and cart rates provide insights into the health of your e-commerce funnel.

Although the floating add-to-cart button experiment had a modest increase in RPV (+0.71%),  92% of merchants experienced a positive increase in cart rate.

 

Seamless shopping from social media

Nowadays, consumers are becoming more familiar and comfortable with making purchases that start from social media. It is because mainstream social media platforms also provide Shopping features that allow customers to easily shop your brand’s photos and videos across social media. You must tag products in photos without sacrificing style points, then direct link from your social media to your e-commerce store.

M-Commerce Trends in the Future

As technology changes fast and progressive, so does mobile commerce as a part of technology. And here are the seven critical m-commerce trends that will become even more prominent in the future.

 

Progressive web apps

PWA, or Progressive Web App, is one of the important trading patterns for the mobile commerce trend. Online businesses often aim to increase profits and improve the customer experience of their online store. In recent years, brands have tried to put mobile first when launching websites. Progressive Web App is a mobile application-based website. The cost of developing and launching a native smartphone application. More brands will use PWAs to deliver better and faster mobile experiences while using the browser on the desktop.

 

Omnichannel

Simply put, omnichannel sells products across multiple networks. Such as electronic trade, smartphone apps, and physical stores that are classified into different mediums. An e-commerce store owner needs to be aware that buyers get information from a variety of sources before they make a purchase. If there is a physical retail store, the in-store experience can change how people shop online. 

The fact is that 73% of consumers shop on multiple channels, while 75% of people expect consistent experiences across channels. And additionally, 73% of people would be willing to switch brands if they don’t get a consistent omnichannel experience from certain e-commerce. These customers cannot be treated differently from those who have a physical retail store and an online store. 

So here are the tips, if you’re using an m-commerce app, you can utilize a push notification when an app user enters the app. You can offer discounts or promotions as an additional incentive to purchase. Either way, there’s a good chance customer will consult about their calls, which further drives customer conversions. We can go a step further and provide personalized ads and recommendations based on your surfing behavior. 

 

One-click order

Did you know that shopping cart abandonment rates are so high from mobile websites? The fact is that 97% of mobile site shopping carts are abandoned. Meanwhile, the mobile app shopping cart abandonment rate is just 20%. It is because mobile commerce allows you to store customer information to their user profile, so they don’t need to enter those tedious details manually every time they buy. 

And with one-click ordering, customers complete the entire purchase process just in one click. It is a win-win scenario for the business owner because conversions will skyrocket and for the customer because they can buy easily. With one-click ordering eliminates the checkout process. So, that’s why one-click ordering will be the trend of mobile commerce in the future. 

 

Mobile chatbots

You might be familiar with or have interacted with chatbots for various reasons at least once in your lifetime, especially on the e-commerce site. Chatbots are one of the best ways to serve your customers, and now it’s growing in popularity, even becoming a must-have item for e-commerce businesses. 

It quickly becomes a part of our lives, and surprisingly it also penetrates the mobile world. Think about all the benefits of chatbots. If you’re already using bots on your website or mobile commerce, you’ve benefited from it. 

It is because more than half of online customers choose a chat over a human representative if they save time. The quickest and the most responsive resolution of questions or issues increases customer service and could impact your sales or revenue. That is why this feature became essential and is sometimes already provided by several websites for e-Commerce.

 

Mobile Payment

Mobile wallets have become a vital part of daily life nowadays. It has been increasing in popularity and usage. OVO, GoPay, ShopeePay, Jenius has become payment method to checkout when shopping from a mobile retail app. It is a quick, safe, and secure way for them to shop both online and offline, offering touchless pay capabilities. 

And it is not a baseless argument because according to Statista, mobile payment volume is growing on average at 62% annually. 

 

Mobile commerce is one of the most powerful consumer trends in 2022. More than 3 billion people worldwide and 70.1 million people in Indonesia use smartphones to connect to the internet for browsing, playing games, and shopping. 

And mobile commerce is going to drive even more conversions because it offers excellent shopping experiences for customers, all the while gathering data about their buying habits and preferences. So, investing in it right now is a smart move for you are considering your business to benefit from an m-commerce app.

Let’s get in touch if you want to learn more about your options for mobile commerce. Or suppose you want to build a website with a mobile-first design. In that case, our developer team will assist you in creating m-commerce applications that take your business to the next level.

Share on social networks:


accelerating Commerce, Begin your digital transformation.

Start your project with LimeCommerce

whatsapp lime