M-Commerce
The Age of M-Commerce
What Does the Future Hold For the Mobile Consumer and the Brick-and-Mortar Experience?
As an undergraduate business student at Oregon State University in 1991, I vividly remember sitting in a banking class one warm spring day. The lecture hall was half-filled, and a tad bit stale. I slouched down in my seat, watching the minute hand making another excruciatingly slow revolution around the faded green clock that hung lazily at a slight angle, just above the room’s only escape route.
Half-listening to a dull voice droning on from the front of the room about various financial institution transactions — how checks clear the bank, or something or other — I felt myself slowly drifting away into my weekly Tuesday afternoon coma. Then it happened.
Suddenly, as if miraculously alerted to the room’s collective boredom, the professor spun around from his frantic whiteboard scribblings to face the class directly. With a hint of anticipatory jubilation, he proclaimed, “A revolution in the banker-merchant relationship will soon be upon us, so you need to pay very close attention to this next topic.” He paused briefly to assess the room’s reaction before continuing, “Soon, cash will become a thing of the past.” The ensuing silence was deafening.
“How many of you have an ATM card in your possession right now?” he asked. As we all glanced at each other with plain mixed interest, a few brave souls started to raise their hands. Unfazed by our slow reaction, the professor pressed on to drive home his point. “If you haven’t noticed, businesses are installing checkout scanners at a rapid pace. These machines not only read barcodes to calculate your total bill accurately and efficiently but also adjust inventory in real-time. In the near future, you will be able to use your enhanced ATM card just like an electronic check.”
As he drew in his next breath, he made his final push, “You’ll swipe it at the checkout, and it will quickly check your checking account balance. If there’s enough, it’ll approve the transaction and release your funds to the merchant. No more need for cash or checks — just your ATM card, or rather, your debit card!” With that, we began to understand the significance of the topic on that dreadfully dull day.
As the class ended, I was left to ponder the gravity of his proclamations, with an equal measure of wonderment and healthy skepticism. That’s all good and well, I supposed. At least, that’s how I recall feeling about it back then.
However, at the time, cash seemed simply more practical to me. Why fix something that wasn’t broken? What was the excitement about? Older people surely wouldn’t want to bother with this concept, would they? It wouldn’t be as big as he said it would be, would it? Where would we be in 20 or 30 years?
Well, we all know how that turned out. Things change.
Fast forward 33 years to 2024. I still have a debit card in my wallet. Only, it’s now becoming antiquated technology. Yes, it still works fine. Although, I struggle mightily to recall the PIN on the rare occasions I find the need to actually use it. But, it feels so… physical. Simply too mechanical for this day and age. Today, I use my ATM card about as often as I visit a shopping mall — if I can find one.
Indeed, in 2024, there’s surely a modern-day business professor, somewhere, excitedly urging their students to “get smart” about the emerging possibilities of a much more intriguing concept than I was introduced to a few decades ago. This leading-edge technology falls within the trending category of “m-Commerce”, and while it isn’t exactly hot off the press, it is rapidly tightening its grip on the global consumer.
So, what exactly is m-Commerce?
E-Commerce Versus M-Commerce
To explain m-Commerce, one must first understand the concept of e-Commerce, which is simply the sale of goods or services online, by individuals or businesses. To distinguish further, e-Commerce is the broader term coined to describe all online transactions, using desktop or laptop computers, smart phones, tablets, or any other internet-connected device, whether fixed or mobile. M-Commerce is simply the subset of mobile devices (smart phones, tablets, etc.) within e-Commerce that can connect to the internet and conduct online transactions, such as mobile shopping, mobile banking, and mobile payments.
Remarkably, the first-ever online sale is commonly believed to have occurred back in 1994. The transaction involved a CD of Sting’s “Ten Summoner’s Tales” album, which was sold by a NetMarket employee to a friend in Philadelphia. This sale is considered significant as it marked the beginning of e-Commerce as we know it today.
Nowadays, almost everyone with internet access has tried online shopping to some extent. A growing number of online shoppers are increasingly using their mobile devices for shopping, leading to changes in the role and necessity of in-person visits to physical stores (more on this later).
Combined with mobile banking and mobile payments, mobile shopping offers an all-in-one experience that seems light years ahead of those earlier days. In the unfolding future, few people will miss the routine of swiping a plastic card through a point of sale reader after waiting in a queue at a physical checkout stand.
M-Commerce Growth
An FTI Consulting report predicted U.S. online retail sales to reach over $1.1 trillion in 2023. An August 2022 Forrester report predicted that e-commerce sales will reach $1.6 trillion in the U.S. by 2027.
A growing proportion of e-Commerce sales are being attributed to m-Commerce. In 2025, mobile commerce is projected to account for 44.2% of all online retail operations, reaching a projected $728 billion in sales. Also, 91% of consumers currently make online purchases using their smartphone. As the sheer number of smartphones and other mobile devices continues to soar, the increase in m-Commerce activity is expected to grow in tandem.
“The average American watched 3.1 hours of TV a day, whereas they spent 4.1 hours on their mobile device in 2021.” (Data.ai)
Business Response to Consumer Demand For More Mobile Options
So what are today’s businesses doing to meet this consumer demand for shopping mobility? Many are developing intuitive interfaces and sophisticated search algorithms to ensure that they are prominently featured to relevant customers searching for their products or services. This results in improved visibility, increased brand exposure, and ultimately, a higher rate of customer acquisition.
Customers want convenience, and the more spoon-fed, the better. The time savings from not spending hours traveling from store to store are immeasurable.
Businesses are also catering to customers using sophisticated personalization strategies. Advanced personalization uses AI, chatbots, and machine learning to analyze user preferences and behavior. This helps platforms deliver personalized recommendations based on each customer’s interests and needs.
Businesses must continue to ensure a seamless transition throughout the entire interaction, from the customer’s first-contact or “discovery” all the way through final purchase and delivery of the product to the consumer.
To learn more, read this LinkedIn article:
Some Advantages and Disadvantages to m-Commerce
From the consumer’s point of view, there are various advantages and disadvantages to using m-Commerce. On the positive side, consumers now have the ability to instantly compare prices, read numerous product and shopping experience reviews, compare similar products from different manufacturers or retailers, and make their final purchase decisions at a time and place of their choosing — whether it’s during a camping trip in the woods or on an airplane, as long as they have an internet signal.
However, there remain challenges to overcome. Poor execution and user experience on mobile devices can frustrate customers and discourage purchases. Also, mobile payment options are not universally available and may not support all types of digital wallets. In addition, there are complex tax compliance issues for customers ordering items across state lines or even internationally. Lastly, security vulnerabilities, including mobile fraud and attacks such as SIM swaps and malware, are also an ongoing concern.
To closer examine the various convenience factors, associated challenges, and latest statistics, please review these articles:
Emerging Trends in m-Commerce
As we travel the path ahead in m-Commerce development, there are several trends emerging. First, Generation Z is leading the shift to mobile shopping, with 76% shopping more on their phones compared to two years ago, compared to 56% of the overall population. Another is that cryptocurrencies are expanding in the area of mobile payment options, offering fast transactions directly between parties. Third, voice commerce is on the rise, with an expected growth to $40 billion in 2022 from $2 billion in 2017, driven by shopping through smart speakers and virtual assistants. Social commerce is driving shopping activity, and will continue to grow in years to come with direct access to shopping experiences via the social media platforms. And finally, artificial reality is enhancing online shopping with virtual “try-on” and other technologies, improving consumer product evaluation and confidence in purchases. These are but a few of the trends.
Review more comprehensive lists in these articles :
What Does This Mean For the Brick-and Mortar Experience?
One might surmise that the combined weight of both m-Commerce and e-Commerce spell certain doom for the future of shopping inside physical stores. But, surprisingly, there are many indicators that suggest otherwise.
The COVID-19 pandemic seemed to spur a dramatic increase in e-Commerce (and m-Commerce) when it first hit back in 2020, but in the three years since, shoppers now indicate that they are more interested in returning to physical stores than abandoning them fully. There is an experiential aspect to shopping that transcends the online shopping phenomenon. While convenience and cost drive the online shopping trends, the ability to socialize and to interact directly with products still drives shoppers into the brick-and-mortar options.
“For the first time ever, we saw brick-and-mortar sales grow faster than e-commerce — with 18.5% growth in physical sales compared to 14.2% e-commerce growth. And this rate continues to grow, as 94% of consumers headed back to brick-and-mortar stores over the last year.” — Bob Swindell
To survive, the malls, shopping centers and box stores that remain above water in this post-pandemic era, must all further brand and integrate the total shopping experience. This includes integrating new entertainment experiences that appeal across demographics and generations to create lifestyle hubs and centers that cater to emerging trends. It demands options such as immersive experiences and interactive, personalized displays, to enhance the overall shopping experience.
At the end of the day, customers still want to purchase products that they can touch and interact with in person. While the future of m-Commerce continues to grow, the only threat to the traditional brick-and-mortar appears to be not changing with the times. The same conveniences that consumers demand from their mobile shopping experiences will apply to the in-store shopping experience. However, the difference is that retailers will need to constantly adjust to accommodate consumer needs rather than allowing themselves to become as stale as that lecture hall I found myself trapped in back in the 1990s.
Read more about the returning momentum of the brick-and-mortars, below.
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