How lucrative could the mobile economy become? In part 1 of this series, we consider the development of M-commerce and how it is likely to expand. And, what business opportunities mobile can deliver and, how all enterprises should be mobile-first.
It’s estimated that by 2025, the number of unique mobile subscribers will hit 6 billion. For several years mobile commerce has been evolving. As it looks set to eclipse the massive success of E-commerce, how can a business make the most what is rapidly becoming a highly lucrative digital commercial channel?
The mobile channel continues to expand as a commercial space. Over 70% of American’s now own a smartphone, with 80% of them purchasing with their phones. In the UK, research from Global Payment Trends predicts by 2023, payments via M-commerce will nearly double from their current rate, resulting in a market worth $2.29 trillion (£1.77 trillion).
“The UK, in particular, is a highly-developed market, and with 99% of the population connected to the internet, e-wallets are the future of mobile commerce for shoppers – but this is only the beginning,” comments Motie Bring, general manager for the UK, Global Enterprise e-commerce, at Worldpay.”
Bring continued: “The latest innovations in device hardware, from voice recognition to facial scanning, are helping make payments more seamless and secure than ever before, prompting consumers to ditch desktop in favour of their smartphone or tablet. To stay ahead, UK merchants should invest in their own apps, building a seamless shopping and checkout experience across every device, and support the most popular payment methods.”
Gaming, of course, has massively expanded on mobile digital devices. And, it’s a lucrative space: According to analysis from Deloitte, mobile gamers spent, on average, nearly £50 a year on in-app purchases. This rises to over £120 with the 25 to 34 age group.
“It’s impossible to sit on a train or bus, or indeed in your living room, and fail to be in the company of people avidly playing games on mobile phones. We’re a nation hooked to our smartphones, and ever since Snake, mobile gaming has been one of the key pastimes for the population,” said Paul Lee, global head of technology, media and telecoms research at Deloitte.
“As mobile gaming, this year breaks the billion-pound mark, new gaming subscription packages and franchisees are lining up to launch into the market. This will undoubtedly mean that mobile gaming will reach the next level in 2020, bringing fresh opportunities for advertisers and app developers,” Lee said.
The continued development of 5G will also have a transformative effect on the mobile channel. The consumption of data has grown exponentially over the last five years.
“Global total mobile data traffic is expected to reach around 38 exabytes per month by the end of the year (2019) and, is projected to grow by a factor of four to reach 160 exabytes per month in 2025,” says Ericsson. “It represents the mobile data that over six billion people will consume using smartphones, laptops and a multitude of new devices six years from now.”
For the tap economy, the steady expansion of the 5G network and, the devices that connect to it, will deliver an ecosystem that all businesses can take advantage of. China, not surprisingly, will see the largest 5G network and will become a testbed for how services – most notably, commerce – will take shape.
How consumers access the services they want to buy is still dominated by the app. According to Comscore: “Looking at a snapshot of the retail category in the US, retail apps reached 87% of the total app audience in 2019: a 16% increase since June 2017. Total audience trends skew towards 25-54 age-group and females. Interestingly, we still see almost a quarter of time spent consuming retail content on desktop, which may be due to the larger screen real estate that can facilitate a closer examination of online purchases.”
Speaking to Silicon UK, Raj Bawa, Operations Director, JBi Digital said: “Apps are 100% relevant to consumers and businesses alike, though the relevance of particular apps depends on the individual requirements of the user. While there are lots of business apps on the market, businesses need to consider whether their products and services are better suited to traditional websites or apps. While on the go, apps have the upper hand over websites, and developers are looking for new ways of creating personalized experiences for end-users.”
The experiences that consumers have when using the mobile channel are now of paramount importance. “Offering convenient and clean mobile journeys should be the main aim for businesses,” said Chris Johnson, Operations Director, SmarterClick. “On mobile, you are subject to arguably heightened competition, where APPs such as Snapchat, Facebook, Instagram, WhatsApp, TikTok (to name a few!) will consume a user’s social time.
“It’s therefore of paramount importance to ensure you offer a slick customer experience when there is a purchase journey in play. In a general ‘commerce’ sense, loyalty shouldn’t be underestimated. Owning the customer through offering loyalty bonuses is a crucial strategy for keeping the brand front-of-mind and acquisition costs, down.”