When people buy things, increasingly they’re buying them online.
The U.S. Census Bureau reports that 8.9% of all sales in the second quarter of 2017 were conducted online, placing the price tag for e-commerce at $111.5 billion for the three-month period. The percentage of online sales also is on the rise – e-commerce accounted for 8.1% of all sales for the second quarter of the previous year.
E-commerce is changing, however, and the primary driver of this change can be found in a pocket or a purse. According to a Pew Research Center study, 77% of Americans use a smartphone and 51% of Americans use a tablet. As mobile devices grow in popularity, they’re becoming an attractive option to conduct transactions online, taking the place of desktop and laptop computers.
Hurdles to M-Commerce
Mobile-based online transactions, or m-commerce, is certain to grow in coming years, but obstacles still exist for buyers and sellers. Business Insider says that only 15% of e-commerce is conducted on a mobile device, even though users spend 59% of their time online on smartphones and tablets, versus 41% on a desktop or laptop. Users spent 85% of their money conducting transactions on a desktop, even though people tend to rely more on their mobile devices.
Why is this the case? Experts generally agree that there are two major issues. First, the size of mobile devices, especially smartphones, makes it difficult to read text, view pictures and enter payment information. Second is an issue of trustworthiness — users might not want to enter personal information on a free Wi-Fi network in a coffee shop, but they trust their home network.
These issues might resolve themselves in a couple of years, as smartphones grow in size, and more sites and apps add easier shopping options. (For examples of how companies are trying to make m-commerce easier, check out Amazon’s one-click purchasing feature, Visa Checkout or MasterCard Masterpass.) Business Insider predicts that m-commerce will grow to account for 45% of all e-commerce by 2020.
Sellers are discovering new risks related to m-commerce. A recent LexisNexis True Cost of Fraud study found that incidents of fraud in m-commerce are growing by 12% a year, compared to just 3% a year for physical sales. The research also shows that large m-commerce businesses are more likely to be targets of fraud than smaller m-commerce businesses — but the risk exists for businesses of all sizes.
In the LexisNexis study, more than half of companies surveyed said they don’t trust the security of mobile device payments. But adding more fraud protection brings other concerns: They might slow down sales, frustrating customers to the point where they abandon the transaction.
Two emerging trends have the potential to accelerate the growth of m-commerce:
- Augmented reality on mobile devices has the ability to overlay computer-generated graphics over real-world images. There are many uses for this capability, such as showing a furniture customer what a sofa might look like in his or her living room, or a cosmetics customer what her face may look like with certain products applied.
- Chatbots provide intelligent automated responses to customer queries, providing a more intimate and interactive experience without requiring a seller to add more staff.
Getting a Foothold in M-Commerce
There is a lot of advice available for getting started with m-commerce, but the first consideration is this: Do you already have an e-commerce site? If you do, there are two primary steps. First, make sure your website is optimized for the smaller screens of smartphones and tablets. Non-optimized websites frustrate potential customers, as they are forced to scroll around the screen and use inconvenient navigation systems. Second, think about creating a specialized app that users can download to browse and purchase goods from your company.
If you don’t already have an e-commerce site, this is a good opportunity to get involved in e-commerce and m-commerce at the same time. The steps are fairly straightforward. First, you will need to obtain a domain name and design a website that accommodates both desktop and mobile screens. At this point, you’ll need to decide whether you want a dedicated app to accompany the website.
Then, you’ll need to set up a shopping portal with a secure credit-card processing system, and there are third-party solutions for that. At this time, you’ll be ready to open your store and promote it on social media and search engines.
If you’re not sure how to proceed at any point, remember that there are experts such as programmers and designers that you can hire to help. They bring experience and knowledge that your organization may not have in-house.