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Mobile commerce almost here, but don't get too excited yet: analysts

Analysts have been predicting the imminent arrival of mobile commerce for more than a decade now. Another imminent-arrival prediction has just been issued, but with caveats.
Written by Joe McKendrick, Contributing Writer on

Analysts have been predicting the imminent arrival of mobile commerce, sometimes referred to as m-commerce, for more than a decade now. (Check out this 2002 report in the Journal of Information Management.) Another imminent-arrival prediction has just been issued, but with caveats.

Sucharita Mulpuru, analyst with Forrester research, just published market research that shows that m-commerce is growing, but still only has a very small chunk of the e-commerce market -- about 2% of online sales, and online sales are only about 4% of total retail sales.

The popularity of mobile apps from the likes of Apple and Android make m-commerce easier and more seamless than with standard cell phones with WAP browsers. Forrester's projections, also reported in the New York Times, see mobile commerce reaching $31 billion in sales by 2016, up from $3 billion in 2010. Retailers are also prepped and ready: NYT reports that 25 of the 30 top online retailers have iPhone apps, and at least 90% of online retailers have mobile strategies.

Still, Mulpuru is conservative about the growth of m-commerce, noting that while Forrester expects mobile commerce sales to grow 40% each year for the next five years, "we’re still talking small numbers overall (7% of web sales penetration by 2016)."

She says the following issues may confuse and confound the m-commerce market in the years to come:

  • Tablets will be used for online shopping. Forrester doesn't count tablet-based online shopping as "mobile commerce." Plus, data soon to be release indicates that "most tablet owners also own smartphones, and many of those people naturally prefer to shop on the device that has the larger screen when given the choice."
  • Shopping never leads web behavior.  "In any list of activities that people do on the Internet, shopping nearly always ranks below things like 'reading news' or 'using social networks.' Even those activities are not universal among the smartphone set, so it would be premature to expect that shopping would rank high on the list (which it of course doesn’t)."
  • Mobile “shopping” that does happen often isn’t about buying online. "When consumers do use their mobile phones in a retail context, it is to look up product information as they are in the midst of researching products in a physical store, or to compare prices, which often leads to a customer demanding a price match, which naturally won’t surface in any m-commerce figures."

Mobile commerce may be a muddled category, since the lines are blurring between devices. If I order something from a netbook -- or even a laptop -- while sitting at the airport, am I engaging in mobile commerce?  So there will be a lack of clarity about how much online retail is "mobile." And clearly, as Mulpuru points out, the use of mobile is transforming the shopping experience. Late last year, another analyst firm, IDC, estimated that mobile was at least "influencing" up to one out of four shoppers, who were using their phones for on-the-spot product and price comparisons. Here, m-commerce numbers will get muddled up with bricks-and-mortar retail numbers.

This post was originally published on Smartplanet.com

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