The retail landscape is constantly changing — and it’s undergone a dramatic transformation during the pandemic. 10 years of ecommerce growth has been scrunched into a matter of months as people have been forced to embrace online shopping and contactless payments.
With so much change, brands are naturally looking for ways to stay ahead of the curve. And there are plenty of people hyping mcommerce as retail’s “next big thing.”
But here’s the catch: mcommerce isn’t a fad or a passing trend that’s just going to be surpassed by the next next big thing. It’s the next step in the evolution of ecommerce, and it’s here to stay.
So what is mcommerce? And how can your brand deliver the kind of mcommerce experience that’s required to succeed in 2021 and beyond?
This article covers all the basics you need to know to understand where retail is headed, including mcommerce definitions, pros and cons, stats, trends, and more. And don’t miss the infographic summarizing mcommerce 101 at the bottom of the post.
What is Mcommerce? Mobile Commerce Definition
Mcommerce, or m-commerce, stands for (you guessed it) mobile commerce. The term ecompasses all commercial transactions that are completed using a mobile device like a smartphone or tablet, including retail purchases, online banking, and mobile payments.
The term “mobile commerce” was coined by Kevin Duffey at the very first Global Mobile Commerce Forum all the way back in 1997.* That’s the same year Buffy the Vampire Slayer premiered on the WB!
So while mcommerce is only recently starting to take off in practice, the concept has been around for nearly a quarter of a century. And it’s grown to encompass industries like mobile ticketing, mobile vouchers/coupons/loyalty cards, mobile content delivery, mobile brokerage services, mobile auctions, location-based services, and more.
What is the difference between mcommerce and ecommerce?
When it comes to defining mcommerce vs ecommerce, let’s keep it simple. Ecommerce covers all forms of selling and buying online. Mcommerce is a subset of ecommerce that’s specific to mobile devices like a smartphone or tablet.
Breaking down the main types of Mcommerce
What are the types of mcommerce? Broadly, mobile commerce involves any type of monetary transaction completed via a mobile device. But that covers a lot of ground.
Most commonly, mcommerce refers to these three main categories:
- Mobile Shopping
App commerce, social commerce, location-based marketing, digital content purchases, electronic ticketing, and more
- Mobile Banking
Mobile money transfers, account management, and bill payments
- Mobile Payments
Peer-to-peer transactions, contactless payments, and in-app payments
To clarify what mcommerce looks like out in the wild, here are a few mcommerce examples. When you think mcommerce companies, think digital marketplaces like Amazon, retail apps like Starbucks or Nordstrom, mobile banking apps like Capital One, and mobile payments services like Square and Apple Pay.
Mcommerce Advantages and Disadvantages
It’s no secret that the world has gone mobile, and mcommerce has fundamentally changed how brands interact with consumers. Just think: your customers can reach into their pockets and buy nearly anything they can imagine in just a few taps.
But like any change, there are both benefits and challenges.
Advantages of Mcommerce
- Ability to reach more consumers. With mcommerce, there’s no limit to your potential audience. People can access your shop from anywhere just by downloading the app or browsing the mobile web.
- Faster customer journey. Things like mobile and voice search, social commerce, and one-click ordering make it easier and faster than ever for people to find and purchase your products.
- New and useful technologies. Apps allow for helpful features like augmented reality, which allows consumers to virtually try out your products; chatbots that provide instant customer service; and real-time inventory that enables people to view products available nearby.
- Greater convenience for customers. Mobile puts the world of retail at consumers’ fingertips. They get access to a wider variety of products and services, the convenience of shopping anywhere and anytime, easy access to customer support, plus the ability to compare products and prices between retailers.
- More effective engagement. Instead of fighting for your customer’s attention via saturated channels like social and email, you can send a push notification, SMS, or in-app message. Customers expect a full omnichannel experience, and mobile allows brands to deliver.
- A fully personalized shopping experience. Data-driven campaigns make it possible to create uniquely customized experiences for each and every user, from personalized product recommendations and discounts to geotargeting campaigns.
- Access to convenient and secure payments. Options like mobile wallets, one-click ordering, and installation payments make it easy and safe for customers to transact.
Mcommerce Challenges to Overcome
- Legal compliance can get complicated. Depending on which geographies you make your app or store available in, you’ll need to understand and comply with more tax laws and regulations for all the locations you sell and ship to. Not to mention user data and privacy regulations like GDPR with which you will need to comply.
- Security and privacy are still top-of-mind. Consumers don’t always trust mobile apps to be responsible with their private data, or to keep their payment information 100% secure. Earning and keeping that trust isn’t easy.
- Integrations with payment solutions. Consumers expect convenient and secure payment options, many of which involve integrations with mobile wallets.
- Need for a fully optimized mobile app or site. Last but most certainly not least, consumers have high expectations for the mobile experience. Laggy load times, bugs or crashes, spammy or poorly-timed messaging, a glitchy mobile checkout experience — you simply can’t afford any of these mistakes.
In short, there are a number of convincing advantages of mcommerce — if you’re willing to put in the effort to develop and maintain a high-quality mobile experience. The costs of a poor mobile experience are just too high: people who have a negative experience on mobile are over 60% less likely to purchase from that brand in the future.*
50+ Mcommerce Stats for 2021
Mobile Commerce: A Global Snapshot
- Mcommerce is growing at a 25.5% CAGR, predicted to hit $488 billion by 2024. (Business Insider)*
- Time spent globally in shopping apps on Android phones grew 30% in 2020. Outside of China, global time spent in shopping apps grew by 45% (App Annie).*
- Mobile commerce sales are projected to reach $3.56 trillion in 2021—22.3% more than the $2.91 trillion in 2020. (Statista)*
- Shopping is the fastest growing mobile app category with 54% year-on-year growth.(Statista)*
- At 46%, global mobile shopping penetration is the highest in APAC. (Statista)*
- Mcommerce accounts for 72.9% of all ecommerce sales — a 39% increase from just 5 years ago. That means nearly three out of every four dollars spent on online purchases happens on mobile. (Oberlo)*
- 79% of all smartphone users have made a purchase using their mobile device in the last 6 months. (Business Insider)*
- 55% of people who shop on their smartphones made a purchase after seeing a product on social media. (App Inventiv)*
Mobile Commerce: US Trends
- In the US, $53.2 billion was spent on mobile from Nov 1- Dec 9, 2020. (App Annie)*
- During the third quarter of 2020, smartphones accounted for 71% of retail website visits and 56% of online shopping orders in the US. (Statista)*
- In the US, mcommerce makes up 31% of all retail ecommerce sales. (Statista)*
- 2020 saw mcommerce revenue hit $338 Billion in the US (Statista)*
- In the US alone, daily time spent on mobile devices has increased from 188 minutes in 2016 to 234 minutes in 2021. That’s a 24.5% increase in just five years. (Oberlo)*
Mobile Apps vs Mobile Web: Shopping Habits
- 51% of mobile shoppers in the US make their purchases via apps. (Statista)*
- 8 in 10 Americans are online shoppers. Half of them use a mobile device for shopping. (Pew Research Center)*
- In 2020, the average mobile shopping app install-to-registration rate was 32.8%, and the average install-to-purchase rate was 14.7%. (Statista)*
- Apps convert at least 3x better than mobile websites. (Criteo)*
- The average order value from a mobile app is $102, compared to $92 from a mobile website. (Buildfire)*
- Mobile app users make twice as many purchases as mobile website users. (Buildfire)*
- Mobile apps have the lowest cart abandonment rate at (68%) vs mobile web (97%). (Buildfire)*
- 46% of consumers say they use mobile retail apps to look for more information about a product or service. (Statista)*
- 75% of consumers say they make purchases on their mobile device because it saves them time. (Oberlo)*
- 60% of buyers say transaction speed makes them more (or less) likely to buy. (Think With Google)*
- 73% of shoppers use multiple channels to shop, making an omnichannel experience essential. (Harvard Business Review)*
- 40% of shoppers say they will buy a product if they get to experience it through augmented reality before they buy it. (Digital Marketing Institute)*
- 61% of mobile consumers are more likely to buy from mobile sites that customize information to location and preferences. (Think With Google)*
- Organizations are experiencing as high as 3x ROI for personalization efforts. (Monetate)*
- 70% of mobile searches lead to action within an hour. (Convince and Convert)*
- Only 12% of consumers find shopping on the mobile web convenient. (Dynamic Yield)*
- As many as 90% of shoppers say that their experiences with mobile commerce could be improved. The two most common concerns hindering mobile shopping are links that are too small to click on and security issues. At least half of shoppers also indicate that they would like online retailers to provide more product reviews and information within apps. (Oberlo)*
- When people have a negative brand experience on mobile, they are over 60% less likely to purchase from that brand in the future. (Think With Google)*
- The probability of bounce increases by 32% if mobile page load time goes from 1 second to 3 seconds. (Think With Google)*
- 42% of shoppers have security concerns about shopping via smartphone. (Dynamic Yield)*
- 35% said they’d abandoned a mobile site because they were required to create an account. (Think With Google)*
- More than 1 billion consumers worldwide use their phones for banking. (Juniper Research)*
- The number of global mobile banking customers surpassed the number of online banking users in 2018, two years earlier than anticipated. (Juniper Research)*
- Digital banking stats predict that the total number of online and mobile banking users will exceed 3.6 billion by 2024. (Juniper Research)*
- Based on online banking trends, it is estimated that there will be 85 million neobank users in Europe by 2023. (Kearney)*
- Nearly half of mobile users in the US use mobile banking apps. (Business Insider)*
- Mobile banking apps rank as one of the top three apps among US consumers. (Citi Group)*
- Only 20% of consumers prefer visiting a physical bank location than banking via digital channels. (Consumer Affairs)*
- Mobile banking has a huge impact on customer retention. 82% of account holders mention their bank’s digital platforms as an important reason they haven’t switched financial institutions. (Consumer Affairs)*
- 30% of Americans prefer mobile banking over other banking methods. (American Bankers Association)*
- 89% of American bank account holders use mobile banking to manage their accounts. (Business Insider)*
- 48% of account holders use mobile banking to transfer funds between their own accounts or send money to someone. (Deloitte)*
- 56% of account holders use mobile for balance inquiries. (Deloitte)*
- 41% of account holders use mobile apps to pay their bills. (Deloitte)*
- The global mobile payments market will have a compound annual growth rate of 33% to reach $4,574B by 2023. (Allied Market Research)*
- 1.3 billion people are projected to use a mobile payment app by 2023. (eMarketer)*
- Market share for Apple Pay, Samsung Pay, and Google Pay is expected to reach 27% in 2022 with a user base exceeding 1 billion. (Payvision)*
- The global mobile wallet market size is expected to reach $3,142.2B by 2022. (Zion Market Research)*
- 30% of consumers under the age of 54 use mobile payment services like Venmo and Apple Pay at least once a week. (Provident Bank Survey)*
- 70% of millennials use mobile payments for rewards and discounts. (Pew Charitable Trusts)*
- 50% of US retailers plan to incorporate mobile payment options in stores. (Retail Dive)*
Mcommerce Growth & Trends to Watch
Mcommerce is growing at a 25.5% CAGR, predicted to hit $488 billion — 44% of all ecommerce — by 2024.* And time spent globally in shopping apps on Android phones grew 30% in 2020.
Why is mcommerce growing so fast? Simply put, because people are spending more and more time on their mobile devices instead of on their computers.
Part of this is driven by technology: smartphones are getting faster, screens are getting bigger, and the mobile experience is getting better.
Part of it is driven by behavior: consumers are becoming increasingly inseparable from their mobile devices, and brands will naturally go where consumers are.
With so much growth happening so quickly in the world of mcommerce, what’s shaping the landscape to come? These are the mcommerce trends to watch for in 2021 and beyond:
Social Commerce: Shoppable posts on Instagram and Facebook where brands can tag products just like they tag people make it easier to convert social traffic into sales. The entire shopping experience happens in one spot: customers can discover products, read reviews, and complete check out all without leaving their social media page.
Voice Shopping: 40% of adults use voice search at least once a day.* What are people using voice search for? 36% of consumers use voice to add items to their shopping lists. 22% make a purchase using voice, and 17% reorder items.*
Mobile Chatbots: You can’t beat instant, 24/7 customer service. 54% of consumers say they would always choose a chatbot over a human rep if it saves them time.*
Wearable Payments: Mobile wallets have proven themselves a preferred payment option for consumers, and that will extend to wearables like smart watches, health sensors, and fitness trackers. Wearable payments are projected to drive more than $100 billion in transaction volume in 2025.*
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