M-Commerce - Mobile Business
By Ted Hoy, Vice President of Product at Digital River

The e-commerce experience is all about taking the shopping environment to the consumer instead of the consumer physically going to the shop. Today, however, this scenario is changing rapidly. As the usage of next generation handsets grows and mobile technology continues to advance, bringing the experience to the consumer will increasingly mean delivering it to their mobile devices. Even though mobile commerce is still in its infancy, consumers are already getting a taste of buying in an anytime, anywhere scenario and using handsets to buy cinema tickets and make travel reservations, among other things. Online merchants who want to stay ahead of the game should be looking to test the market early or risk being left behind as their competitors take these principles to the next level.

Several global market dynamics already are signaling that mobile commerce is here to stay - just the pure volume of mobile devices coming into the marketplace is an indicator. In 2008, approximately four times as many mobile devices shipped worldwide as compared to the volume of PCs. Not only are mobile sales up, so is mobile usage. Many research firms indicate that mobile phone usage in Europe is among the highest of any geography in the world. In fact, Forrester Research suggests that more than 85 percent of European adults use a mobile phone. And in 2008, almost half of these Europeans accessed the Internet from a broadband connection through a mobile device at least once a week, if not every day. When you add smarter phones, bigger screens and faster networks to these market dynamics, it is not hard to see that many forces are converging to create a considerable growth opportunity for online merchants.

For retailers that already have an online presence, finding a cost-effective m-commerce solution may be as simple as getting assistance from their existing e-commerce provider, many of which are now introducing advanced mobile commerce solutions that simply plug into existing online stores. By detecting when a consumer accesses an e-store via a handheld device, these solutions are able to display only the most relevant features of a mobile shopping experience, including a choice of secure, mobile friendly payment methods. Because the mobile store interfaces with the same set of features and information as the online store, the shopping experience is consistent and helps the retailer maintain and build its brand.

As mobile technology continues to advance, merchants need to ensure their mobile strategies are in sync with their larger business goals to drive the best overall result. If reaching a large audience is a key goal, companies should consider launching an m-commerce site, which is accessible by anyone with an Internet-enabled mobile device. Companies wishing for alternative or complementary mobile solutions might consider creating e-commerce applications. These apps also provide a fast, sophisticated shopping experience because software is stored right on the handset; personalized services are available through integration with handset features like contacts and existing apps; and location-based services can be provided via GPS navigation. However, the downside to e-commerce applications is that they are specific to certain brands of smartphones and, as a result, are likely to attract a noticeably smaller audience. While there are differences between e-commerce applications for smartphones and m-commerce sites, companies need to first determine their mobile goals in order to choose the approach or combination of approaches that is most appropriate for their business.

Beyond mobile sites and pure e-commerce apps, there are other exciting developments in the cards as retailers and developers begin dabbling with technologies like Augmented Reality (AR). AR, the combination of computer vision and object recognition, allows information about the user's surroundings to become interactive and digitally usable. The increasing use of AR in smartphone applications demonstrates not only the strength and usefulness of the technology, but also the added convenience it can offer to smartphone users. It is not uncommon today to find apps designed for a variety of smartphones that help users navigate and find their way or desired destination using AR navigation systems, similar to how in-car GPS navigation systems function. The use of AR technology is not limited to navigation apps, however, and is beginning to emerge in the mobile commerce space. A prime example of an m-commerce-oriented AR app is designed for Amazon's Android phone. Using the smartphone's camera, the app "reads" barcodes and recognizes simple objects, such as CD or DVD covers, and allow users to do basic price comparison shopping. As AR technologies continue to evolve and progress, it is likely they will become more engrained in mobile commerce applications and used commonly among consumers.

By all indicators, it appears that sometime in the not-so-distant future, mobile shopping is going to be as mainstream as its online counterpart. Many retailers may take comfort from the fact that the majority of their competitors are either watching from the sidelines or casually beginning to formulate their m-commerce strategies. While there are some benefits to learning from mobile trendsetters, businesses serious about embracing new technology and attracting next generation consumers need to act now to diversify their multi-channel sales strategies by testing the mobile commerce waters.