Tudor Aw, technology sector head at KPMG, explains how mobile commerce is one of the biggest opportunities for companies – big and small
Mobile commerce is one of the biggest opportunities companies have to grow and innovate over the next two to three years. It’s a space in which even the smallest players can have a big impact.
The reasons underpinning that are fairly obvious when you look at the amount of smart phones currently being sold.
We reached a tipping point last year when smartphones actually outsold PCs for the first time. Effectively as of the end of last year, we have a billion mobile devices connected to the internet.
This is a staggering figure.
Add to that the fact that 4G is coming around the corner, which will also be a real injection into the arm.
Twelve to 18 months ago most of the conversations I was having around mobile commerce were with specialised companies in two sectors; mobile operators and handset manufacturers on one side and banks on the other.
In the last six to eight months, however, I’ve been having those conversations with just about every sector.
Retailers have really taken interest, health care companies and government agencies are looking into this in a serious way.
Anyone who has got a consumer business or the need to interact with people can see that the single easiest way to do that is going to be through the mobile phone and not through the emails and leaflets of old.
So what is the space like?
In the last six months we’ve seen a lot of new players enter the mobile market but no one at the moment has an out and out lead, or all of the answers. To my mind it’s all to play for.
When I speak with the companies, large and small, it seems small businesses are more confident about their chances. Big businesses don’t ask me what their competitors are doing, they ask what the small start-ups are doing instead – what are all of the speed boats doing around the big battle ship cruiser that turns so slowly?
A lot of these mobile services are very niche and so there is a huge ocean of opportunity for different players. You’ve got to be really open to new ideas and you’ve got to be nimble in terms of staying on top of what is going on. Don’t get overconfident.
How to tackle the mobile arena
Businesses, particularly SMEs should be thinking about mobile as an avenue for them to be connecting to their target customers.
But also how they can help work in an eco-system with other key players. Of all of the companies we are talking about, they are probably good at one or two of the key components to this space but not all. So everyone should be looking for partners who can come along with these ideas and solutions.
What will we see in the future?
Initial discussions were about mobile payments – ‘can I use my phone as my card to buy the odd coffee?’ But the real value is about getting this 360⁰ relationship with your customer.
Say you have a John Lewis or similar retail customer, and they exit the tube at Oxford Circus (using their phone as an Oyster card to swipe out of course), the location-based service will spot them, say ‘there’s a John Lewis 400 yards to your right’, and a map will pop up to show the way.
Next it will recognise that it has been a few months since you bought some shirts with them and pop up with a picture of your favourite shirts on sale, trousers to match, a picture of you wearing them, other customer recommendations etc.
Essentially you will be entering a mobile community.
Say your gas bill was due to be paid yesterday. Your provider will pop up with a reminder and a one click option to pay it straight away without any hassle and add the next bill date to your calendar.
A lot of governmental agencies are realising that while the internet and PCs were a real barrier between socio-economic groups, the mobile is actually a device that can break through all of that and communicate with their target audience.
If they have your contact details they can push advice and tips and let you know of events happening; for example advising pregnant ladies of local support groups and health tips.
There are a couple of challenges facing businesses in this arena
Infrastructure and band width could start getting tricky. With the Olympics coming up people are already panicking that if we don’t build major Wi-Fi spots we will get overloaded and congestion spots will pop up all over the place. So it’s critical that we address potential capacity issues through solutions such as offloading traffic onto wi-fi or additional investment in infrastructure such as a new 4G network.
Awareness is another problem. For four to five years we have been running an annual consumer survey to establish awareness and willingness to engage with mobile commerce.
People who responded that they were aware and willing went from zero per cent in the first year, jumped to 19 per cent, to 48 per cent, and this year we have reached 60 per cent.
While this is still a barrier, awareness has gone from zero to very strong but one of the hardest problems is usability and customer experience. We find that this is where some big companies struggle. They solve the problem from an engineering point of view but in fact the user experience is the issue. If you need a 15 page manual to work out how to use it you’re on the wrong track.
The number one barrier is concern around security and data privacy.
In all the years that we have run our consumer survey, this has been the biggest issue to overcome and in all that time no one has done anything about it. Consumers themselves have given us the answer of what they want in security terms.
They want a very open and transparent explanation about what the companies are doing with security and data privacy and they want them in plain English and in plain sight, right up front – not buried in the terms and agreement.
They want to see third party certification. As in the early days of the internet when you had a lock in the corner and that was a sign that it was a safe site, they want to see something similar, a stamp or kite-mark that signals the same kind of security.
Lastly, companies really need to be careful with their brand and make sure they don’t breech anything. It doesn’t matter how blue chip you are, the minute you do something wrong you can really suffer and if you get it wrong once you’ll never get it back.