Role of Mobile Commerce

Introduction

Since the invention of mobile phones, man’s life has tremendously changed. This change has been evidenced through several ways, with the most common change being personal relationships (Gs1 1). However, overall, mobile phones have enabled people to have more freedom to do whatever they please and at whatever time they want. In a way, this represents personal freedom. In this regard, the use of mobile phones has been extended to various aspects of life and currently, mobile phones are used to undertake activities which were often time consuming and engaging. This trend birthed mobile commerce.

Mobile commerce (m commerce) is defined by the undertaking of commercial activities using mobile phone devices (Gs1 1). Most of the mobile phone devices used in mobile commerce is internet enabled and this assists in accessing internet applications through the phone. Often, mobile commerce has been compared to accessing the internet through the desktop and it has been proved that, mobile commerce provides a new frontier in commerce, with the most distinguishing feature being the fact that it is mobile (Dholakia 1).

Mobile commerce is therefore used in the buying and selling of goods through mobile applications. The concept has been partially applicable in Europe and Africa, with other dominant markets such as the United States (US) slowly gaining pace. Often, m commerce has been widely used in the provision of financial services and telecommunication services but similar services have been offered in sectors such as the information sector and the wholesale and retail sector (Dholakia 1). In the financial service sector, mobile commerce has been majorly used in mobile banking and stock broking services where users conveniently pay for goods and services or take part in stock trading through their hand-held devices. Billing services are also done by m commerce through the telecommunications sector while m commerce in the wholesale and retail sector enables customers to place and pay for orders on the fly. This study further explores the applicability of m commerce in other commercial sectors such as the financial sector and marketing sector but emphasis will also be made on the general benefits of m commerce and how it adds value to both businesses and customers.

Benefits of M Commerce

The biggest benefit of e commerce is the fact that, it enables users to transact business anywhere they are. This benefit is associated with the fact that, mobile phones increase the portability of individuals and in the same regard, there has been a change of perception of what people nowadays think of space, time and where or when commercial activities can be done. Mobile phones are also advantageous in the sense that, they allow for the quick adoption of technology, which is vital to the success of m commerce (Gs1 1). Compared to other e commerce tools, mobile phones seem to integrate new technology faster than other devices such as computers. For instance, it is easier for a consumer to purchase a new mobile phone to enjoy a new technology as opposed to a computer user replacing his (or her) computer to access new technology. Randomly, it is estimated that, consumers normally change their mobile phones every 18 months and in some markets (such as Korea); users are known to change their phone as frequently as six months (Gs1 10). Such statistics expose the fact that, it is easy to adopt new technology using mobile commerce.

Mobile commerce is also a success story in many markets because of its short message service (sms) data application. It is estimated that, people send text messages more frequently than any other type of communication worldwide and current statistics project that, users send about ten text messages daily while generally, about 72% of mobile phone users use the text message service (Gs1 10).

Mobile commerce is also of benefit to most business operators because it makes commercial activities accessible to many users; hence expanding the market outreach for most companies. The penetration of mobile phone service is ahead of many types of electronic devices in the world and therefore, it is correct to say that, m commerce greatly increases the size of audience to be reached. For instance, obviously, the mobile phone penetration in the world market is deeper than the penetration of computer service which is normally seen as an alternative for mobile phones. It is further estimated that there are about four billion mobile phones in the world, and the number is projected to rise in the coming years (Gs1 11). In certain developed markets like Europe, mobile phone penetration is safely past the 90% penetration level and mobile phones are a very critical asset for almost every individual. In this regard, saying that almost everybody has a mobile phone (in such markets) is a reality. The trend is also quickly catching on in developing markets with a great number of people currently using mobile phones instead of more expensive options such as computers. The following diagram shows the extent mobile phone penetration is, viz-a-viz other electronic devices

Benefits of M Commerce

Mobile phones are also widely known for their ability to provide a personal touch to commercial activities. The personal touch in mobile commerce comes from the fact that, consumers have the option of accepting (or declining) marketing services. In other words, for advertisers or marketers to reach a consumer, the consumer needs to give permission to the marketers to reach them. Moreover, the consumers have the option of choosing the marketing service they like. For instance, a consumer can chose to access his or her social networking site to access marketing or advertising services being offered in this medium. Alternatively, consumers can decide to check out a company’s website through his or her mobile phone to gain access to information regarding the company. Freedom of marketing is therefore exercised in this manner and consequently, consumers are able to enjoy a personal touch in their services.

Application of M Commerce in Business

Since the introduction of mobile commerce in the 1990s, there has been a shift in the manner business activities are carried out. In this regard, there are many business processes which could have been manually handled but are currently being handled in an automated manner. The automation of business activities stretch from ordering activities to customer service ventures.

In business, mobile commerce adds to the gains already made by e commerce because it offers a personal touch to business activities (something which e commerce fails to do) (Gs1 11). This personal touch is stronger in business-to-customer relations (which also happens to be at the centre of marketing and advertising ventures). Many applications have been developed to enrich the relationship between businesses and customers and often, such applications have a significant role to play in the purchase cycle between businesses and customers.

For businesses and customers, mobile commerce has played a big role in the identification of products because mobile phone devices can use a barcode to detect a product (Dholakia 19). This saves time for consumers wishing to identify a product and the location where it can be bought. Businesses also enjoy this benefit because they make similar purchases from their customers. Many companies have in the past benefitted from such a feature as is evidenced by GSI France, which together with its business partners developed a software to enable its consumers easily access its products using their mobile phones. This technology allowed for the identification of a product using a barcode to select the product from a data base, complete with the information of every product associated with GSI France. Gs1 explains that, the technology worked by:

“Creating a prototype to follow the specifications recommended by GS1 France Mobile Commerce workgroup: read the GS1 bar code on products to facilitate access to information and search for the information in a GDSN (Global Data Synchronisation Network, see section 5.5.2 for further details) product catalogue” (Gs1 11).

For instance, if a consumer wanted to obtain data regarding a given product, he or she needed to send a short message service bearing his full names which will be redirected to the company’s software, known as “Codeonline”. However, before this process is undertaken, it is within the consumer’s discretion to enquire about the “Codeonline” service. After the consumer sends the short message service via his or her phone (free of charge), they are required to fill information regarding the product desired, and with such information at hand, the software downloads the information regarding the product to the user’s mobile phone (Gs1 11). Comprehensively, when users want to get information regarding a product, they simply have to click in the “Codeonline” icon on their mobile phones and then input the data, after which the software downloads details regarding the product to the user’s mobile phone.

Mobile phones are also used to enhance the relationship between two or more businesses. Through the enrichment of businesses, various business owners are able to enjoy more efficient business relations throughout various transactional processes such as ordering, dispatch, delivery, payment claims and such like transactions. For instance, in the ordering process, a business owner can simply scan a bar code of the product, obtain information about the product (from the bar code) and later order the product. The same process is also applicable while reordering a product. Delivery of the goods can also be affirmed through the mobile phone because there are mobile applications which show the delivery status of a given product (Gs1 11). In the delivery process, businesses can also obtain information regarding the supply chain information of the ordered goods (such as the product’s past and future states in the supply chain). Also, through scanning the bar code of a given product, a mobile phone device confirms the delivery of a given good.

Mobile phones can also be used in stock control where people keep track of stock and send such information to a central database where the final computation is done. For this process to work a business owner ought to scan the barcode of the product and in real time, he or she can update the stock information. The biggest advantage of mobile phones in stock taking is evidenced from the fact that, mobile phones gather stock data from various locations and compute them in another. This is an advantage that cannot be attributed to other types of stock taking devices such as stationery scanners. The bar code fed to the mobile phone device can also be used to check the authenticity of a given product (Gs1 13).

Mobile commerce also comes in handy for mobile companies or those which heavily rely on the concept of teamwork because members of a given team can collaborate or communicate with one another from remote locations to let other team members know the status of their jobs (Dholakia 41). Often, companies which operate in such kind of environments require their agents to have their mobile phones always because this is their basic business tool. Also, companies require such devices to ensure their agents are providing their customers with the best services.

Application of M Commerce in Financial and Marketing Activities

Marketing

With the inception of M commerce, advertisers have recently shifted their focus from offline media sources to online media sources to better connect with their target audiences. Such is the case evidenced from the relationship advertisers have with their consumers through social networking sites like facebook and twitter (which are also available through mobile phones). Not only is the paradigm shift evidenced in only advertising and marketing circles, other companies are also optimistic about the change. For example, Gs1 explains that “IBM forecasts 22% growth in mobile, digital and interactive advertising formats between 2006 and 2010 against 4% growth in traditional advertising formats” (Gs1 15).

Financial Services

Companies offering financial services are posed to be the greatest beneficiary of the developments made by mobile phones in the financial service sector. The most popular form of mobile commerce applications in the financial service sector is mobile banking. Through mobile banking, companies have been able to perform cheque balancing, account transactions, payments, deposits and similar financial transactions through the utilization of applicable softwares developed by leading mobile phone companies such as Apple and Google (Rose India Technologies 4). Through mobile banking, users can therefore transact money through their mobile phones; thereby eliminating the traditional method of queuing behind a teller to undertake such transactions. Through mobile phone financial services, banks have also found it possible to provide their customers 24-hour bank assistance to their customers through voice calls undertaken via mobile phones. Other companies have also been known to provide the same services using a non-voice facility but which instantly alerts the customer about the progress of his or her transactions, or regarding any question about his or her banking services. Rose India Technologies confirms that:

“Whenever any user needs money or wants any sort of banking and finance related services, he/she can access the services or register services via voice calling or via Short Message Services (SMS) services. WAP based mobile handsets allow the user to access the official website of the institute” (Rose India Technologies 4).

As mentioned earlier in this study, mobile commerce has also been successfully used in other financial activities like stock broking where users are able to access real-time quotes in the stock market and also able to participate in real-time trading via their mobile phones; either through the voice or non-voice service. Sometimes, some users decide to use both services (Gs1 15).

Easy Language

Lastly, mobile phones are also used to provide commercial services to users in different languages. This means that, it is possible for companies to customize their services in their users’ language without having to employ people to learn the new languages and communicate using those (Deans 107). Using the best software and information technology experts, companies can also be able to tailor their services or online communication platforms using the target audience’s language; thereby providing a personalized service to its users. In this regard, companies can provide their services to many people around the globe and in the same manner; consumers can have access to a variety of services without experiencing language barriers.

Conclusion

Mobile commerce offers several advantages which conventional electronic commerce services cannot. This study notes that mobile commerce is the new frontier in digital commerce and its positive commendation comes from the immense benefits it poses to businesses and consumers alike. Businesses are able to benefit from mobile commerce through improved decision making processes because they are able to enjoy richer and complete shopper behavior which compliments their decision making processes. In this manner, they can also be able to offer their customers better services and from the improved services, they can be easily differentiated from their competitors.

From a marketing perspective, businesses are able also to improve their brands, and undertake on the spot purchase decisions such as allergens, traceability and such like transactions. Most of the benefits identified in this study are also applicable to both businesses and customers but most importantly, businesses are able to gain access to a wider market in marketing their goods and services. In undertaking this process, businesses are also able update their company’s information in an easy manner. Moreover, the fact that, mobile commerce allows for the easy adoption of new technology simplifies the process of quick information updating because businesses are able to do so using the latest technologies. From the wider access to consumer markets, businesses are also able to customize their products and services to suit the different needs of various languages and cultures. Cross-selling compliments this feature.

In as much as mobile commerce is of benefit to most businesses, this study also acknowledges that, consumers can also immensely benefit from the services provided in m commerce. The greatest advantage of m commerce, for consumers, is the control of information received from marketers and advertisers. In this regard, consumers are also able to get the right information and in whatever format they prefer (such as language preference and such like features). Also, using the barcode feature, consumers are able to obtain accurate information regarding various products at any time and any place. This feature enables them to make spot-on purchases, thereby making the purchasing experience more efficient and fun. Moreover, mobile commerce gives an opportunity for consumers to personalize their commercial activities by simplifying the process, like changing the sizes of the texts used, abbreviating words and such like features. Collectively, these advantages define mobile commerce.

Works Cited

Deans, Candace. E-Commerce and M-Commerce Technologies. London: Idea Group Inc (IGI), 2005.

Dholakia, Ruby. M-Commerce: Global Experiences and Perspectives. London: Idea Group Inc (IGI), 2006.

Gs1. Mobile Commerce: Opportunities and Challenges. Brussels, Belgium: Gs1. Rose India Technologies. Mobile Commerce. 2011. Web.