If management is serious about increasing transaction volume this year, the organization needs to add mobile transactions to its strategy fast. Mobile turned out to be a major factor in driving Thanksgiving and Black Friday sales last year, according to a study by IBM, and you can bet it will be even bigger this year.
Through March of this year smartphones and tablets accounted for almost half of digital time spent on retail websites and applications according to comScore, a research firm. Since 2011, mobile sales have increased almost three fold to $38.4 billion annually. According to estimates provided by eMarketer, mobile sales could double by 2016 to $86.9 billion.
Gartner takes a more global view, reporting worldwide mobile payment transaction values will reach $235.4 billion in 2013, a 44% increase from 2012 values of $163.1 billion. It estimates the number of mobile payment users worldwide will reach 245.2 million in 2013, up from 200.8 million in 2012.
“We expect global mobile transaction volume and value to average 35% annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017,” said Sandy Shen, research director at Gartner.
Mobile commerce—transactions conducted via smartphones and tablets—is too important to be left to the marketing group or CMO alone. As transaction activity shifts to the mobile channel the CIO needs to get a handle on how to deliver efficient mobile transactions that facilitate customer purchases. “Adoption of mobile is unprecedented, surpassing even email adoption a decade ago,” says Carissa Ganelli, CEO, LightningBuy, Bridgeport, CT. “More people than ever are accessing the Internet today, and it is driven mainly by mobile,” she adds.
Mobile commerce is different and the mobile buyer is different. Many companies still don’t realize that. They try to retrofit their conventional e-commerce website for mobile marginal success at best. “Sorry, the mobile experience is not the same as the desktop or laptop experience,” says Ganelli. The devices are smaller but the consumer behavior as a result is dramatically different.
An IBM study found that consumers put, on average, 5.5 items in their desktop/laptop shopping cart. On their mobile devices, they put 1.2 items. This tells you that consumers use their mobile devices for serious shopping. They aren’t just browsing around. They are looking for one thing and prepared to buy it right then. As a result, organizations need to rethink their e-commerce strategies in terms of stimulating conversions and maximizing revenue and profit. With mobile consumers, skip the loss-leaders and other low (or no) margin transactions and go for your best sales.
To win the mobile commerce game, companies need to think in terms of mobile behavior, notes Ganelli. For example, a large party favors retailer’s typical order consists of 22 items. Forget that for mobile sales, even laptop sales average only 5.5 items per shopping cart. But thinking mobile, the retailer packaged those items into a single bundle, a Star Wars pack or a Superman pack. The mobile shopper, whose typical shopping cart contains 1.2 items, could then buy the entire package as one item.
Any transaction processing gateway can handle mobile payments these days. LightningBuy, however, offers a transparent, frictionless mobile commerce gateway to organizations wanting to ride the mobile wave without any new development work on their part. All that is required is adding one line of code (a cut and paste job) for the url. For the mobile customer it’s even better: no account registration, no password needed, and no long and painful checkout process. On the seller side all the transaction processing, for better or worse, remains the same. LightningBuy doesn’t touch your internal processes except to transparently expedite the mobile buy.
LightningBuy costs seem minimal: a one-time set up fee, a monthly fee, and a small transaction fee, 5-10%. There is no limit to the number of products you can add to your commerce pages. Still, it makes sense to shop around. An article in Business News Daily offers help sorting through the pros and cons of 14 different mobile payment services and that’s just a handful of what’s out there.
Right now mobile commerce remains primarily a consumer phenomenon but that could change as procurement and supply chain folks adopt smartphones and tablets. There is no reason, notes Ganelli, that it couldn’t handle B2B transactions.