What is m-commerce?

Mobile commerce is the process of using a handheld device like a phone or tablet to complete a purchase online. You’ll also hear mobile commerce referred to as mCommerce or m-commerce. Since we’re all glued to our devices these days, it makes sense that mobile commerce is one of the largest subsets of the total online commerce space.  Data from Oberlo shows that mobile commerce has seen an average year-on-year increase of 33.8% since 2016.

In fact, mobile devices are now the primary way that customers shop online. Comscore found that in 2019 mobile commerce reached  51% of total online transactions in North America.

Much of this is owed to the fact that mobile commerce gives shoppers flexibility. They don’t need to use a desktop computer to make a purchase, and they can pay for products or services without swiping a card or using physical cash.

Types of mobile commerce

Mobile commerce is a broad term that encompasses a number of different types of mobile transactions, including:

• Mobile shopping: A customer uses an internet browser to access an e-commerce website (which is often optimized for a seamless mobile experience) using their cell phone or another handheld device.
•  In-app purchasing: A customer completes a purchase using a dedicated mobile application. For example, a customer orders a coffee through the Starbucks mobile app and receives push notifications when it’s ready for pickup.
•  Virtual marketplaces: A smaller subset of in-app purchasing, many marketplaces—like eBay or Amazon—have their own dedicated mobile apps where customers can browse items and complete online transactions.
•  Mobile banking: Believe it or not, mobile banking is a part of mobile commerce. Most financial institutions have dedicated banking apps or mobile websites that allow users to complete bank transactions on their mobile devices.
• Mobile wallets: More and more customers are using digital wallets, with a projected  56% of all e-commerce transactions  to be paid with mobile wallets by 2023. This is another branch of mobile commerce. Customers store their credit card or other payment information in their digital wallet (like Apple Pay, Samsung Pay, Google Pay, PayPal, etc.) and use that as their payment method when making purchases with online retailers, or even at physical stores.

Needless to say, when mobile commerce represents any type of commercial transaction using a mobile device, there are a number of different business models that fall under that umbrella.

Mobile commerce trends: Why is m-commerce important?

We’ll cover the advantages of mobile commerce a little later. But for now, here’s the biggest thing you need to know about the importance of mobile commerce: It’s becoming increasingly prevalent.

Way more than a trend or a passing fad, mobile commerce is quickly becoming the go-to way that people complete transactions online. If businesses—yes, even small businesses—don’t keep pace with these changing shopping behaviors, they risk losing out on customers and sales.

Here are a few more statistics that emphasize the importance of mobile commerce in today’s online shopping landscape:

• Mobile accounts for approximately half of the web traffic worldwide.
•  62% of people who own a smartphone have made a purchase using their mobile device in the past six months.
• On average, mobile payment users spend twice as much as those not using digital payments.
•  45% of consumers who shop online complete their purchases using their phone, whereas under 34% use their computer.

To put it simply, mobile commerce is here to stay—and it’s only going to increase in popularity. Predictions estimate that mobile devices will make up almost  73% of total e-commerce sales  globally by the end of 2021.

M-commerce vs. e-commerce: What’s the difference?

You might hear m-commerce and e-commerce used interchangeably, or you might even hear the term “mobile e-commerce.” However, there’s a slight difference between m-commerce and e-commerce that business owners should be aware of.

M-commerce is actually a specific subset of e-commerce. Here’s the most straightforward way to think about it:

• E-commerce stands for electronic commerce, which is any type of purchase that’s completed online.
• M-commerce stands for mobile commerce, which is any type of purchase that’s completed using a mobile device, specifically.

So, saying “e-commerce” instead of “m-commerce” isn’t technically incorrect—mobile commerce is a part of electronic commerce. However, if you’re talking about purchases made via mobile, the term “mobile commerce” gives a more accurate representation of the type of sale and customer experience you’re referring to.

Mobile commerce options for small businesses

Think small businesses are unable to leverage the power of mobile commerce? Think again.

Even if you aren’t in a place where you can create your own custom mobile application or web apps, there are still a number of options for businesses who want to jump on the mobile commerce bandwagon. These include:

• Your website: If you have an e-commerce website, make sure it’s optimized for mobile (more on this a little later) so customers can easily complete purchases on your site from their cell phones or tablets.
• Social media: Many social media platforms allow businesses to list and tag their products in their social posts. Customers can then click those product tags and complete purchases without ever leaving that social network. It’s a way for businesses to enable mobile purchases without needing to roll out a dedicated website or app.
• Point of sale system: Most current point of sale (POS) systems are equipped to accept mobile payments, which allow users to hold their mobile phone over a scanner and pay using their digital or mobile wallet. Check if your existing POS allows for this functionality or if you need to purchase an add-on reader.

Rest assured, you don’t need to jump right in with a complex solution to begin integrating mobile commerce into your small business. The above options can help you offer flexibility and convenience to your customers, without a ton of hassle and cost on your end.

Advantages and disadvantages of mobile commerce

It goes without saying that mobile commerce is continuing to make up more and more of e-commerce sales. But, that doesn’t mean it’s perfect. Here are a few pros and cons of mobile commerce that you should be aware of.

Advantages of mobile commerce

Let’s start with the good news first. Mobile commerce offers a number of perks—not just for customers, but for business owners too.

• Improved customer experience: Today’s shoppers want options. That not only applies to products and services but payment methods too. A reported  42% of US consumers won’t go through with a purchase if their preferred payment method isn’t available. Mobile payments give your customers the flexibility they demand, which improves their experience with your business and can even increase customer retention.
•  Greater convenience: Mobile commerce offers greater convenience for shoppers, as they can browse and complete a purchase directly from their phone—sometimes even by scanning their own fingerprint, if they’re using a mobile wallet. Mobile commerce limits manual work for business owners as well, as payments are automatically recorded. And, if you have your payment processor hooked up to your accounting software, all of that information will be logged for more accurate bookkeeping.
•  Business growth: Mobile commerce can happen anywhere, which means your sales aren’t limited by geographic location. Additionally, mobile shoppers reportedly spend more than customers who don’t use digital payments, which boosts your business’ bottom line.

Disadvantages of mobile commerce

Mobile commerce has plenty of upsides, but as with anything, there are a few drawbacks to take note of.

• Maintenance and optimization requirements: A mobile experience isn’t automatically a good mobile experience. Unfortunately, one 2018 study reported that only 12% of consumers found the mobile shopping experience to be convenient. Ensuring that mobile commerce is simple and streamlined for your customers will require some work. Additionally, you’ll need to continue to optimize your user experience as technology evolves.
•  Complicated compliance: Mobile commerce isn’t the wild west—there are certain regulations that businesses must stay compliant with. Plus, if you have international customers, the tax laws can get complicated. None of this is insurmountable, especially if you find the right technology and trustworthy professionals to help you. But, this additional complexity can be a little intimidating at first.
• Security and privacy concerns: Even though more and more shopping is happening online and with our mobile devices, most consumers still have concerns about their security. An impressive 92% of customers say security is important to them when they shop online. This is especially important for mobile commerce, where fraud is common. In addition to being Payment Card Industry (PCI) compliant, businesses need to extend their fraud prevention efforts to their mobile website and applications and work with a payment processor that proactively detects suspicious activity.

How to implement an m-commerce strategy for your business

Mobile commerce isn’t without its faults. But, considering that it isn’t going to disappear anytime soon, it’s still a worthwhile avenue for all businesses to explore.

Overwhelmed by how to roll out a mobile commerce strategy for your own small business? It doesn’t need to be complicated. Let’s cover a few different things you can do.

1. Optimize your website

Your website might look great on a computer. But what about your mobile users? If a customer visits your website on a different device, can they easily navigate it? Or are they met with jumbled text and buttons that run off the page?

The foundation of any mobile commerce strategy is website optimization—particularly if you have an e-commerce website where customers can place orders. It needs to function well on all types of devices.

You can start by visiting your website on your own smartphone or tablet. How does it look? Can you get to what you need or are you running into bugs and problems? Take note of what you’re finding so you can share that information with your web developer to fix those issues.

You can also use  Google’s Mobile-Friendly Test . Simply enter your website URL and the tool will analyze your site and tell you whether or not it’s easy to use on a mobile device. Or, if you want to get even more specific, you can use a site like  Mobile Moxie to see how your site looks on a bunch of different iOS and Android devices.

Keep in mind that a long or complicated checkout process is the  third most common reason  that shoppers abandon their carts. By optimizing your site and your checkout for mobile users, you can streamline their experience and increase their chances of completing a purchase.

2. Leverage social media

What if you don’t have a website for your small business? Does that mean mobile commerce is off limits to you? Not exactly.

As we mentioned earlier, many social media platforms have rolled out shopping features that allow their users to shop directly within the app (you might hear these referred to as “social commerce”). How this works for businesses will differ from platform to platform, but generally the steps are as follows:

• Ensure you have a business account, rather than a personal one
• Upload your products or services to the social platform to create your product catalog
• Turn on the shopping features on that specific network
• Tag your products in your social media posts so they’re “shoppable” for your followers

This means people can purchase your products on a mobile device even if you don’t have a website. For example, they’d click your tagged product on Instagram and complete the purchase without ever leaving Instagram. Social media can be a great option for businesses who want to use mobile commerce but don’t yet have the resources to roll out a full e-commerce site.

What social media platforms offer shopping functionality? Currently, shoppable posts are available on:

• Facebook
• Instagram
• Pinterest

However, we’ll likely see social commerce continue to increase in the coming years. Other platforms, such as TikTok and Snapchat, have also been experimenting with various shopping features.

3. Offer assorted payment options

We’ve mentioned the importance of optimizing your website and your mobile checkout experience, but there’s a big piece of that puzzle we still need to touch on: payment methods.

Whether on desktop or mobile, customers prefer a variety of different payment methods. One might like to use a credit card, while another always opts to use a digital wallet. As we mentioned earlier, if their preferred option isn’t available, customers are far more likely to ditch the checkout process.

This is why it’s important that you offer more than one payment option at checkout. Make it easy for customers to use the payment method of their choice. Fortunately, most payment processors and gateways today make it easy to accept a variety of different payments—from money transfers to mobile wallets.

You’ll improve the customer experience and simultaneously boost your business’ conversion rate.

4. Keep an omnichannel experience in mind

Mobile commerce is important, but that doesn’t mean the small screens and your mobile marketing strategy deserve all of your attention and energy.

Rather, you need to remember that customers might interact with your business using a variety of different channels (this is something called omnichannel). In fact,  96% of Americans  shop online, yet 65% of their shopping budget is actually spent in-store.

For example, they might discover a brand while scrolling through social media on their computer and then click over to its website. Then, they might be retargeted with SMS messaging and click through again to complete a purchase on their mobile device.

If each of those touchpoints doesn’t offer a high-quality experience, customers can drop off. So, while people are increasingly using mobile, don’t make the mistake of neglecting all other channels. It’s when they all work together that you’ll really reap the rewards.

Make the most of mobile commerce

It’s no secret that we’re all attached to our phones—which means mobile commerce isn’t something your business can ignore.

From accepting mobile wallet payments to optimizing your e-commerce site for handheld devices, consider this your guide to making the most of mobile commerce in your business.

Put these strategies to work and you’re on your way to improving your customer experience, landing more sales, and growing your business.