Small businesses should venture into the world of mobile
Date: Tue, 03/30/2010 - 13:37 Source: By Raam Thakrar, CEO of Touchnote
During the last decade a cold war was waged between small businesses as they struggled to take full advantage of the online space. The key advantage of e-commerce – that it can quickly introduce your services to a global audience – also presented small businesses with the issue of massively increased competition
The web is, after all, an environment where consumers can compare prices, reviews and customer feedback at the click of a button. Businesses in every sphere have battled to differentiate themselves online, engaging in a virtual arms race to take advantage of the latest technological developments and win a greater market share.
The benefits of e-commerce that have become unlocked through new technologies are manifold. The internet has freed many businesses from the restrictions of their real-world stores and has forced all businesses to at least develop an online arm. Fully fledged e-commerce has extended sales geography, lowered overheads, provided a useful route to managing customer relations and allowed businesses to be more responsive to sudden changes in the market. Awareness of online purchasing and services is now extremely high, with more and more people searching, comparing and buying via the internet than ever before. Even small businesses with no specific need for e-commerce have been forced to embrace the internet as an essential part of raising their public profile, attracting new clients or providing an improved level of customer support.
Increased consumer confidence in fraud protection when purchasing online has broadened the variety of services companies are prepared to offer. Additionally, faster broadband connections – combined with far more sophisticated websites - have made the customer experience far more engaging. The earlier generations of e-commerce sites were just HTML and simple images. With today’s high speed broadband, sites are not shy about using flash, multimedia, videos, ajax and many rich media technologies to give customers a superior browsing experience.
Yet, this crowded online marketplace has left many small businesses searching for the next platform that can provide a competitive advantage for customer engagement.
M-commerce, buying goods or completing financial transactions via mobile phones or other handheld devices, is rapidly being adopted, especially in Asia and Europe. Juniper Research has predicted that the industry will be worth more than US$60 billion globally by 2013.i Rather like e-commerce, mobile phones have the potential to help businesses in a huge variety of areas, from providing a platform to make purchases, to marketing and customer support. Yet the greatest value of m-commerce for businesses is its ability to grant access to a vast number of customers.
Mobiles have become a ubiquitous accessory with over 4 billion mobile handsets in use worldwide.
Nokia, the world’s largest handset manufacturer, sells 13 phones a second, while Chinese mobile operators see 5 million new subscribers each month. Mobile phones are also increasingly common in countries where access to laptops or PCs is extremely rare. Many African populations now regard their mobile phones as indispensable - indeed telecoms is often their only reliably functioning utility. Thus mobile handsets represent a means to not simply reach more consumers, but also to monetise markets previously inaccessible to e-commerce.
Unlike laptops and PCs, mobile phones normally tend to be within close proximity to their owner. This makes them a uniquely valuable platform for businesses. For example, businesses selling a product that is time specific, such as event tickets, can add value to their offerings by reminding customers of the booking. If a platform to purchase tickets is also available for mobile then businesses can fulfil their customers’ needs instantly. Customer interactions via mobiles also have the potential to take advantage of in-built handset technologies, such as cameras, GPS navigation and accelerometers. If your business can take advantage of a handset’s unique properties with new applications, your brand will remain in a customer’s pocket 24/7.
The variety of different mobile devices currently available can allow businesses to more accurately target different segments of their market. For example, if your business wants to target wealthy urbanite professionals, the platform of choice for your product would be high end devices like the Blackberry Bold or Apple iPhone – these consumers can therefore can be reached through user downloaded applications, Bluetooth marketing or the mobile web. Alternatively, if you are targeting lower-income consumers, tactics that target less advanced handsets, such as SMS messaging, should be implemented.
However, it will take consumers some time to accept the premise of paying for goods via their mobile phone, just as it took time for online payments to be adopted in the last decade. Many consumers are still unsure of the security of higher value mobile payments. While PCs and laptops are now protected by advanced firewalls and virus scanners, many consumers are unaware of the dangers to exactly the same data on their smartphones. There are also few comprehensive security programs available for the platform and, because we carry our smartphones with us at all times, these devices are more exposed to physical theft and misuse. Vendors will also have a need for greater security if higher value or physical products are offered to consumers.
There are a number of routes through which businesses can take advantage of the growing mobile marketplace.
The widespread uptake of smartphones has blurred the lines between online and mobile payments, with many handsets now capable of recreating a PC-quality internet browsing experience. With an estimated 10% of UK retail sales taking place online in 2010,ii the uptake of mobile transactions will only continue to increase as mobile technology is no longer a barrier to making mobile purchases and it will be increasingly easy to reach customers through mediums such as the mobile browser, Bluetooth, Wifi, Applications, 3G and high speed data networks. However, high-quality mobile browsing experiences are currently only possible on a small section of handsets, limiting the number of customers who can be reached effectively through this means. Additionally, online browsing is difficult to optimise for the (comparatively) slower data connections of mobile handsets, which can make purchases through a mobile browser more frustrating. If you decide to take your business to the mobile web, it is vital to optimise your website in order to create a better user experience.
As an alternative small businesses may wish to create their own mobile applications. The rise of mobile applications has already changed the way businesses interact with consumers and many app stores are now enormously popular. Apple’s App Store has seen over 2 billion downloads of 100,000 applications by 60 million users, while more than 200 million users worldwide can access Nokia’s Ovi Store and Google’s Android Marketplace. Mobile applications can offer consumers anything from an easier means to make purchases via their phone, to providing useful services or simple entertainment. The level of interactivity and response times from mobile apps is far greater than the mobile web and they are also capable of taking advantage of individual handset features, such as the iPhone’s accelerometer.
Currently, the main challenge of developing a mobile app for your business is deciding which platform to design it for. With a plethora of app stores now flooding the market, it can be hard to tell who is winning the race to become top dog. In terms of sales, the Apple App Store is undoubtedly leading the pack with over 2 billion downloads. However, Apple is a relative newcomer compared to other players like the independent app store GetJar, which launched in 2001 and has seen nearly 800 million downloads. As other big-name manufactures enter the field, competition will only become more fierce. Nokia's Ovi Store had a difficult birth, but will undoubtedly see a vast increase in downloads due to its sheer size.
Meanwhile, Blackberry’s App World has had some success, although high prices and difficulty with its application search and discovery are holding it back. In truth, none of these hopefuls look likely to dethrone Apple in the near future. However, Google’s Android Market has the potential to become a worthy challenger. Google has been clever in creating a truly open operating system that enables developers to have the freedom to create amazing apps. As the number of handsets that can run Android increase, Android Market could be the next store to truly take-off. Additionally, businesses should be open to the potential of partnering with others in the mobile space.
Touchnote recently packaged up the ability to print and post postcards anywhere in the world into a code library that iPhone and Nokia phones can understand. This allowed many different image-based app developers to offer postcard functionality, whilst giving additional revenue to all those involved.
The rise of mobile application stores and improving mobile internet capabilities are whetting the consumer appetite for m-commerce. Undoubtedly, now is the time for every entrepreneur to ask themselves how can their business take advantage of mobile.
i Source: Juniper Research: http://www.juniperresearch.com/shop/viewpressrelease.php?pr=106
ii Source: Out-Law.com: http://www.out-law.com/page-6948