Mobile payments have hit the headlines in recent weeks in the UK with the delayed announcement of O2’s Wallet and the launch of Barclays Pingit earlier this month. With so many operator strategies reliant on getting it right it is no surprise that m-commerce has also been a hot topic at the recent Mobile World Congress, with Vodafone and Visa also announcing a global partnership that will enable customers to pay for goods and services using their mobile phones.
So once the payments systems are underway and embedded into consumers’ lifestyles what is it exactly that individuals will be spending their hard earned cash on? In our latest Mobile Commerce and Payments survey we found there is real appetite for m-commerce globally. Of the countries already well on their way to full-scale m-commerce adoption, Kenya (39%), Saudi Arabia (32%), Poland (32%), US (30%)and South Africa (28%) are the top five countries in which consumers are already using their mobile for shopping. This is as a result of cheaper data that led to an increase in internet traffic across the board, and brought entirely new users to the fold. Meanwhile, cheaper phones, with better usability and bigger screens have steadily delivered a better and more rewarding web experience to mobile users.
If we take a moment to look at the UK market we appear to be looking at the other end of the scale. The UK falls into the bottom three with only 19% of users already using their mobile for shopping. So there is still a great opportunity for brands to embrace mobile payments here. Whilst mobile content and airtime are still top of the list of things to purchase, physical items are also proving popular purchases via mobile, including; travel, e.g. tickets and hotel bookings (13%), entertainment, e.g. books, music and movies (21%) and gadgets (18%). However when it comes to consumers’ intention to use mobile for buying one of these products (travel, entertainment and gadgets) over the next six months, the UK tops the charts in Europe at 89% followed closely by Germany (71%) and Poland (62%). A promising sign of things to come?
However, there are still many barriers to consumers fully embracing m-commerce: 35% of users aren’t aware of the basic mobile transactions available, plus those who are aware of these commercial platforms find the services too complicated (21%), or are worried about security (27%). It’s imperative therefore that retailers provide reassurance and education about options and availability of the services that already exist. Furthermore it is crucial that brands provide product information and it is important that they consider how to provide this for example; 30% of mobile web users use their phones to get more product information (product features) and 32% use it for bargain hunting (comparing product prices). Addressing these issues must be a key focus if mobile commerce is to succeed. One of the ways businesses can overcome consumer security concerns for example would be by offering a ‘payment on delivery’ option.
So where are the opportunities? There are significant opportunities for customer relationship management (CRM), coupons and redemption, this will also help drive m-commerce activity and increase sales. Another key aspect would be the ability to track purchases, providing the consumer with increasingly better and efficient service will gain trust over the long-term. However the largest opportunity still remains with the changing demographics we have seen over the past year. Many countries are dominated by young male mobile web surfers and brands are therefore overlooking opportunities to market to women and mature (age 35+) audiences, both of whom are important m-commerce segments in those markets in which they are present.
In our recent survey we found the proportion of mature users across the globe is growing (15% are now over 35). This group of users is most likely to be a catalyst for mainstream adoption of m-commerce, as their intent towards repeat purchases is disproportionately high. They’re most likely to drive m-commerce in the areas of travel, gadgets, groceries and prepaid utilities in many markets. In the UK, for example, over-35s make up only 23% of mobile web users, yet they account for a third of those who plan to buy gadgets in future.
In order to pave the way for further demand for mobile and lifestyle content as well as mobile commerce offerings consumers the entire mobile ecosystem needs to develop by gaining trust from consumers, as well as brands to take advantage of spending power maturity. If the industry clarifies their communications, reassures users about their security concerns, and overcomes the confusion then 2012 looks set to be an exciting year.
