Mobile Commerce or M-commerce is emerging as one of the most contending subsets of the E-commerce market. As E-commerce is set to witness gargantuan growth levels in the years to come, a major proportion can be attributed to mobile commerce which accounted for more than 70% of the total e-commerce market in 2021.
M-commerce simply can be understood as a medium of commerce in which a mobile device such as a tablet or smartphone runs a process that enables any sort of monetary transaction. It comprises functions like paying bills or service costs, buying/selling products, and utilizing online digital wallets and banking services. Valued at nearly USD 270 billion in 2021, the m-commerce market is growing at a CAGR of 27% between 2022-2030.
With Black Friday sales around the corner, M-commerce is the talk in the market with consumer surveys reporting nearly 85% of consumers are going to shop from their phones.
Rapidly changing Consumer Behavior
Millennials are on track to become the largest living adult generation. Their forcefulness when it comes to technology and digital services is so strong that many businesses are making a pivot to focus more on this segment. The millennial population has created the perfect storm for mobile commerce adoption to take off because millennials are more likely than any other age group to embrace mobile devices as their primary means of accessing the internet.
A person spends 3 hours and 15 minutes per day on average on their smartphone. Social media has also significantly catalyzed the shift. Consumers have more access to mobile devices than ever before which is why there is a dramatic shift in embracing mobile commerce among all demographics, age groups, and cultures.
The increasing importance of Apps
Nearly 85% of customers use shopping apps to make purchases and browse for store-bought items. More than 90% of consumers believe that companies should have dedicated apps for both iOS and Android. This data is up from 78% just five years back indicating the growing importance of apps for customers’ purchase behavior. It is more likely for customers to end up on a company website which likely has an app to navigate first. The importance of apps is often attributed to convenience, mobility, and most importantly better sense of trustworthiness. At the same time, brands can control customer experience by optimizing re-targeting and incentivizing loyal customers, thus seeing a higher conversion rate than websites on mobile browsers.
Technological Advancements setting growth trends
Emerging technologies like AI, ML, and AR (Artificial Intelligence, Machine Learning, and Augmented Reality) can be a real game-changer in the landscape of mobile commerce with more and more brands taking its aid. Augmented reality is increasingly getting incorporated into mobile applications for providing rich shopping experiences for customers. Major brands like Coca-Cola and IKEA have already used embedded AR in their mobile applications to provide a heightened customer experience. Advancements in metaverse technology will further accelerate the growth of mobile commerce.
The mobile commerce market will continue to grow as brands look for ways to make the shopping experience more fun and engaging for their customers. Providing exact location using Wi-Fi or GPS-based technologies, as opposed to just IP address, providing a broad region of the user’s location, M-commerce can generate insights that can help marketers to build location-specific content and offer personalized recommendations. Smartphone subscription worldwide accounts for more than double that of just 5 years back and is predicted to reach 7.69 billion by 2027, just slightly less than that of the current global population. Retail industries will be seeing a major shift in consumer patterns. By 2025, m-commerce sales will make up over 10% of all US retail sales.
Given these projections, it is of critical importance for marketers and brands to rethink their strategy to align with the evolving consumer nature and maximize their potential profits.