The future of mobile commerce is commerce

Last week, I spoke with a well-known specialty retailer. They briefed me on the company’s omnichannel marketing program, then asked for help finding a “really cutting-edge technology to really define our mobile commerce strategy.”

A few things struck me when I heard that.

First, in a trip back to Business 101, your marketing strategy is your commerce strategy. You hitch your transactions to the product pitch — not the other way around. Transactions are just about closing the loop, and the combination of buttons versus users trying to click to seal the deal won’t convert any transactions on its own.

Second (and perhaps more concerning), is that after all the work a company has put into a really comprehensive outbound marketing program, it isn’t looking for a gimmick to captivate users into buying.

I get it. Retailers, banks, and consumers all want frictionless transactions, and nobody wants to be the tragically unhip company that can’t meet its users on their terms. But let’s put things in perspective: There are countless ways to allow users to transact on their mobile devices, and some are certainly more elegant and efficient than others. Technology, however, is not a strategy, and while a lousy checkout can definitely lose a sale, a good one is rarely the reason a consumer decides to buy.

“Mobile commerce” is not a thing

“Mobile commerce” is a bit of a rabbit hole. As a concept it makes sense to look at all the ways in which users will transact on their mobile devices. But mobile commerce encompasses a number of entirely different spaces. A Square-enabled mobile POS, a video game offering in-app purchases, FeLiCa’s tap-to-pay system at train stations, and a retailer’s mobile-enabled website all fit the criteria, but there’s very little overlap. The spectrum of mobile commerce into can be divided into six distinct areas:

  • Commerce website accessed via mobile device
  • Mobile-optimized/responsive website purchase via device
  • Mobile device payment at retail POS
  • Mobile app-only purchases (e.g. Uber, Square)
  • In-app social media purchases (ex. Facebook, Twitter)
  • Mobile-specific rewards, couponing to drive physical store traffic/transactions

The trick with mobile commerce is treating it as a checkbox rather than a top-level strategy. Users must be able to transact on their phones, one way or another — that’s a given. But the how of it is determined by the marketing strategy and customer experience. The correct method may not necessarily fit your competitors, and that’s OK.

Diverging trends

App engagement is up but the number of apps with which users interact has plateaued. In that world, Facebook has the scale and stickiness to create its own payment system, but few others share that luxury. Social game developers might look to Facebook credits as a payment option that could work across devices, while a business like Lyft, whose success depends entirely on its app, can focus on third-party mobile-only payments like Google Wallet.

Starbucks built its own mobile commerce platform as an extension to its existing infrastructure, bringing transactions, loyalty points to the phone in a simple, straightforward package that both complemented and mirrored its offline experience. As Kristina Yee writes in a forthcoming Gigaom Research report, these proprietary “closed ecosystems” will gain ground, despite a complete lack of standardization. At the same time, most of the world’s retailers lack Starbucks’ lock-in, and for those companies, a more lightweight mobile commerce channels may be more appropriate. A properly tuned mobile front-end to an existing Web-based commerce engine may be more than sufficient to service users needs. If it can leverage a user’s existing stored credentials (like an Amazon or Google storefront), the Web-based solution may save time and headaches for customers and developers.

Mobile commerce is an important part of any retailer’s strategy, but it isn’t a strategy in itself. It’s always a good idea to keep an eye on what’s new (and we’re happy to help our clients do that), but if we focus on the business case first, the technology choices will be obvious.