While mobile commerce won’t become widespread next year, or even in the next few years, it will eventually be huge, according to a study from The Strategis Group, with about 90 million users generating more than $50 billion in revenues by 2007.
The study, “U.S. M-commerce Marketplace,” finds growth in mobile commerce will be relatively slow over the next four years. But with the advent of 2.5- and third-generation technologies, along with location- and time-sensitive products, consumers in the United States will grow increasingly reliant on mobile transactions.
“We foresee m-commerce transactions outnumbering e-commerce transactions,” said Cynthia Hswe, a senior analyst at The Strategis Group and the report’s lead author. “The wireless device will become their (consumers’) personal shopping tool.”
But several things must happen before the mobile-commerce revolution, Hswe said.
First, the mobile-commerce experience must be a unique one, she said. Retailers must take a multi-channel approach, and their technology must be compatible and agnostic. But, more importantly, mobile commerce will have to be personalized and time sensitive-two things essential to the uptake of m-commerce.
“Initially, it’s got to be a unique mobile experience,” Hswe said.
In addition, Hswe said that because the acceptance of mobile commerce will be generally slow at first, many of today’s mobile Internet companies will have a rough time.
“The retailers that will benefit the most (from mobile commerce) are the brick-and-click,” Hswe said, adding that businesses based solely in the electronic world won’t catch on as quickly. “Initially, we don’t see a lot of companies making money from m-commerce.”
Once mobile commerce begins to become more prominent, the types of m-commerce transactions will change, according to the study. During the next few years, “push” transactions will dominate the wireless sale landscape. Retail promotions that are simply pushed to a user’s device initially will be the most important type of m-commerce transaction. Hswe said those types of transactions will eventually be replaced by push-and-pull transactions, which will feature queries from users that are event and time sensitive. Finally, Hswe said, “pull” transactions-initiated by the user-will become the most prominent type of transaction, and will include mostly small purchases of various household or personal items, such as movie tickets.
“Pull transactions are part of the sweet spot for mobile commerce,” Hswe said, adding that users between 18 and 25 years old will be the first to use m-commerce services. “This age group is much more comfortable buying online than other age groups. M-commerce providers need to target them now and get them addicted.”
The deployment of 2.5- and third-generation technology, along with location-aware services and Bluetooth and infrared technologies, will likely draw many more users conducting many more transactions, Hswe said.
However, “these technologies won’t make a significant impact on m-commerce until after 2004,” she said, adding that education and standards development must occur in the interim.
