Is Small Business Ready for Mobile Commerce?

Wednesday Mar 16th 2011 by Jennifer Schiff
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Experts predict that mobile devices will change the way people buy. Here's what you can do to take advantage of this booming trend.

Many analysts predict that mobile commerce will soon overtake traditional ecommerce as the number of smartphone and tablet (e.g., iPad) sales continue to rise. Is your small business prepared for the mobile onslaught?

Mobile Commerce by the Numbers

In 2010, comScore estimated that, out of more than 234 million mobile device subscribers, more than 45.5 million Americans owned a smartphone. That number has since grown -- to 65.8 million people as of January 2011. More significantly, those smartphone owners are using their mobile devices to shop -- some 48 percent of them, according to a recent comScore mobile commerce survey. And that’s not including the estimated 3 million-plus people who browse and shop online using an iPad or Android-based tablet.

And while shopping is clearly an important aspect of mobile commerce, consumers are also using smartphones and other mobile devices for many other commerce-related activities as well. These include finding nearby stores, comparing prices, researching products, using social networking sites to view and share their recommendations and scheduling appointments.  

While many businesses have created mobile versions of their websites and/or optimized their existing sites for being viewed on a mobile Web browser, small and medium-sized businesses lag behind.  According to the SMB Group’s 2010 Small and Medium Business Mobile Solutions Study, only about 12 percent of small businesses (1-99 employees) and 21 percent of medium businesses (100-499 employees) have mobile Web sites (versus 44 percent for companies with more than 500 employees).

That said, more than 50 percent of the small businesses SMB Group surveyed in the retail, education and non-governmental organization (NGO) verticals said they planned on creating a mobile website in the next 12 months. Interestingly, many of the startups surveyed by the SMB Group reported they are developing a mobile presence before creating a traditional website, because that's the area they believe will provide the most customers and opportunities.

Mobile Commerce: Trend or Fad?

“Mobile commerce is definitely not a fad,” stated Laurie McCabe, partner, SMB Group. Fads are fleeting. “If there was some indication that the whole mobile device market was subsiding, I’d say maybe it was a passing fad. But it’s not,” she said. And while smartphone sales have slowed somewhat in the United States recently, usage has increased, with more people shopping with their mobile devices than ever before.

“We don’t do forecasting here at SMB Group, but there are forecasts out there that say that the mobile payments market is going to quadruple by 2014 -- and end up being about 5 percent of total ecommerce sales,” McCabe added.

To put the mobile commerce trend in context, McCabe and other analysts (including the National Retail Federation) see mobile commerce at the same stage that ecommerce was at in the late 1990s. Although many people don’t remember now, at the time many people wondered if consumers would really buy products and services online. Some people doubted ecommerce would ever really catch on and take off. Mobile commerce will continue to grow in much the same way, predicted McCabe.

How to Make Your Business Mobile Friendly

As Jonathan Rosenberg, the senior vice president in charge of product management at Google stated during Google’s Q4 2010 earnings call, “The key to unlocking mobile commerce [is] to make it easier for people to both search and then consummate the transaction on the mobile device.” And with smartphones becoming more ubiquitous, and more businesses optimizing their businesses to accommodate mobile users, Rosenberg believes that mobile devices are already changing the face of ecommerce.

Note that Google now makes $1 billion in mobile ad revenues, and its Android mobile operating system is the most widely used smartphone platform in the world. Bottom line: Rosenberg knows what he is talking about.

So what can you do to take advantage of the mobile commerce trend?

“When you create a mobile-friendly website, it’s important to not only be able to process payments but to make it easy for customers to get information about products and services,” said McCabe. Other features you may want to consider include the capability to:

  • make appointments (if, for example, you run a hair or beauty salon or auto repair shop)
  • check on orders (i.e., delivery status)
  • contact customer service

For more information on why and how to create a mobile website, see Why You Need a Mobile Website.

In addition to those features, you also need to provide your mobile customers with incentives to get them to shop at your site.

“To take advantage of the mobile commerce trend, small and mid-sized businesses should focus on their existing customers first and provide incentives -- special mobile-only deals and discounts -- to transact business over their mobile device,” said Andrew Lipsman, senior director, Industry Analysis, comScore.

The fact that many SMBs have yet to take advantage of the mobile commerce trend means that you have an opportunity to get ahead of the curve. As Lipsman noted, now is the perfect time “to help your best customers develop an m-commerce habit with your brand, so that as they become more comfortable with the medium, you, the retailer, will have the opportunity to gain share of wallet.”

One of the most important aspects of mobile commerce is that it’s about creating a positive user experience.

“When creating a mobile-friendly site, it’s important to think not just about how people can buy something, but how do you recreate the customer experience [of a traditional ecommerce site] and improve it through the mobile device,” said McCabe.

Addressing Mobile Security Issues

“Security is probably the toughest hurdle to overcome right now,” in regard to getting more people to shop via mobile devices, stated Lipsman. But businesses can help customers overcome that largely mental hurdle by adhering to the same security measures and best practices they employ on their traditional ecommerce sites -- and reassuring customers that “transacting over mobile is just like transacting online,” Lipsman said. “The more retailers can get customers to see these activities as synonymous, the more likely they will get them over this mental hurdle.”

Consumers can protect against mobile malware by installing antivirus and anti-malware software -- from a trusted publisher -- on their mobile devices. They should also take care when downloading apps -- only download applications from trusted sources; keep track of mobile devices at all times; and lock phones when not in use.

Jennifer Lonoff Schiff is a regular contributor to Small Business Computing and runs a marketing communications firm focused on helping small and mid-sized businesses.

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