Does Mobile Commerce Really Work?
By David Dorf-Oracle on Nov 19, 2008
A few months back I was shopping for a Wii Fit at Amazon.com, but they were out of stock just like every other retailer. But I noticed they offered a Text Alert, which sends me a SMS message when the product is in stock. I decided to try it out, and it worked well. (BTW, when you receive that text message, you have about 2 mins to buy the Wii Fit before they are sold out again.) Not only does it send you an alert, but the service allows you to search for product, then initiate a purchase all via SMS. The system calls your phone to complete the purchase. Amazon calls it TextBuyIt. The alert part is useful, but I can't think of a worse way to make a purchase. I guess they decided to limit themselves to SMS in order to reach all mobile phones. Its a case of least-common denominator.
Digby, an independent M-Commerce vendor, has a very nice interface but requires users to download their application. So it only supports Blackberry, iPhone, Windows Mobile, and Android. Frankly, I'm not sure how many people will go to the trouble of downloading the application.
Recently, Sears announced their Sears2go program for making purchases from a smartphone. Its basically an e-commerce site that's optimized for a small-footprint Web browser. The experience is not much different than using the website, so its fairly intuitive.
But overall, I just can't bring myself to buy something from my phone. If I'm in the house, I'm using my PC. If out shopping, I'll drop by the store. I doubt consumers will hunt-and-peck on their mobile phones to buy grandma new earrings.
I think there's a better chance consumers will use their mobile phones for payment. This has already taken off in Japan, so the "wallet phone" technology is mature. But I've seen this movie before. Back in the '90 Visa and MasterCard introduced smartcards to the US without success. This is where contactless payments originated. The issue has never been the technology; Japan and Europe have been using "chip & PIN" systems for years. The problems are with the business case in the US. Mag-stripe credit cards are ingrained in the culture, and our low-cost infrastructure won't get any cheaper with mobile payments. Consumers aren't demanding it, retailers don't think it will increase revenue, and banks are happy collecting zillions in credit card fees and interest payments. Anyway, is it really that much better to wave your phone rather than swipe your card?
I admit I use my phone for email, text messages, games, and web browsing more than I do for calls. But I don't see a compelling application for retail yet.