Mobile: How Do I Buy With Thee? Let Me Count The Ways

Written by Evan Schuman
September 16th, 2007

The good news is that major companies are now actively pushing mobile. The bad news is that they’re pushing in different directions.

Historically, any major communications or commerce channel is only remembered after the industry agrees on one (or perhaps two) directions.

Think back to the early days of the Web. Ask most people when the Web began and they’ll typically say 1995 or 1994. In truth, Tim Berners-Lee finalized it in 1990 and working systems were already deployed by 1991.

There were a healthy number of users accessing Web sites using non-graphical browsers. Yes, it was painful. I remember searching through the Security and Exchange Commission’s database in a text-based browser. If you’re ever in the market for a cruel alternative to capital punishment, it would be an excellent choice.

But it wasn’t until the launch of the first graphical browser–NCSA Mosaic, later changing its name to Netscape Navigator and eventually just known as Netscape?in 1993 did the industry coalesce around that graphical browser and the Web caught on fire.

I think it’s safe to say that the mobile phone e-commerce activities you’re seeing today?and certainly any you played with last year or earlier?are going to fall victim to the same amnesia fog that envelopes all of those early Web searches done on Lynx (major early non-graphical browser).

Although the Web had been around for years?and the Internet for much longer?it was the graphical browser that got the industry to agree on one way to create Web pages that could fire the imagination of businesses and consumers.

That defining moment has yet to hit mobile commerce. Forget design and programming issues. There hasn’t yet even been broad agreement on how m-commerce is supposed to work.

Let’s start with simple payment. Is it based on an RFID chip in the phone, making it one big contactless credit card with a speakerphone? Or is it charged to wireless telco that is powering it, identified through the phone number?

Some have tried using the phone number as a unique identifier and have it tied into a credit card, authenticated by the user having to either answer the phone at a specific moment or making a call from that phone and then having a limited number of minutes to make a specific purchase.

McDonalds?certainly a heavy-hitter regardless of the measurement method?is now experimenting in South Korea with a mobile phone payment method where the phone is physically plugged into a port at a table and requires the downloading of an applet. When the food is ready, the phone rings. If it wasn’t McDonalds doing it, I would wonder about the wisdom of a mobile application that requires a physical tether.

Then there are m-commerce tactics that try and leverage the phone’s unique attributes, such as its digital camera and almost-realtime chat capabilities.

The camera can be used to “see” 2-dimensional (and soon more) images and take certain actions, typically launching a web browser and going very deep inside a site, requiring a URL much too long to manually key in conveniently. This allows the URL to reflect the exact location of the user at the time of download, helping to identify the effectiveness of a particular ad on digital or physical signage.

The chat capability has the most promise and requires the most retail effort. The potential: A consumer goes into a department store and the store’s network identifies the consumer based on the phone’s number. (With number portability, the number is likely to stay with the consumer longer than the phone hardware will, although neither are especially long-lived.)

Knowing that customer’s history of expensive cashmere sweater purchases, it messages a 20 percent discount if a purchase is made in the next 30 minutes. Where it gets interesting is if customer service people are awaiting his reply at a call center somewhere. He replies, “Maybe, but I’m really here shopping for a new refrigerator. If you throw in a 15 percent discount on that, we’re there.” They counter: “I’ll give you 12 percent right now, but you need to buy both.” Sold, he replies.

Or maybe the phone’s chat function will be an exchange of questions that would normally have gone to those hard-to find floor sales reps.

Some recent moves?most prominently from Sprint on Sept. 13?are going for a limited number of products that can be recrafted to look better on cellphones.

Cellphones have the serious burden of limited bandwidth and very limited screen size, a deadly combo for any commerce efforts. That’s one reason why McDonalds is experimenting with a tether and the phone’s ringtone, which conveniently bypass both of the phone’s biggest problems.

But is a piecemeal approach–Digby, for example, works only on Blackberries, and selects a limited number of products to finetune for mobile?going to take mobile to the next level?

Mobile commerce is going to get real?there is something too much potential and too many dollars for it to die?but it?s not going to happen with the industry flying in so many different directions.

For retail executives, though, they need to think carefully about what m-commerce method to embrace. That snazzy ringtone app may just be the 2007 equivalent of Lynx.


One Comment | Read Mobile: How Do I Buy With Thee? Let Me Count The Ways

  1. vacher Says:

    Your title and analysis is very clear, about the actual cloud/fog on the good way to do m-commerce and m-payment.


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