According to eBay's CEO, John Donahoe, there will be more change in the way consumers shop and pay in the next five years than there has been in the last 10. We are currently at an inflexion point with the fundamental force driving change being mobile and the smartphone. EBay's iPhone app boasts 12 million downloads and has generated $700 million in the first year, with $ 1.5 - 2 billion predicted for the second year.
As with eBay, mobile commerce can be used to extend e-commerce activities to wherever the shopper is, day or night, via their mobile phones. Donahoe describes this as "Bringing the world's inventory to you."
Here, however, m-commerce is essentially providing a parallel access method for customers who already have desktop access to "traditional" e-commerce. It would be interesting to see just how much of eBay's mobile revenue had shifted across from the e-commerce platform. As well as cannibalised revenues, there is not much in the way of a reduction in cost of sales or other efficiencies - in fact, I'd argue that cost of sales would actually increase, thanks to retailers servicing substantially the same customer-base via two electronic channels.
However, especially in a country such as South Africa, with very high mobile internet penetration compared to desktop internet, m-commerce may very well be a shopper's first, or only, experience with online shopping. What's more, in such a big country, with large rural areas, m-commerce can give shoppers access to stores and brands they would have previously had to travel hundreds of kilometres to reach.
Now the retailer truly starts serving a customer-base that has not been served via an electronic channel before, bringing in cost-savings and widening their market reach substantially. Nevertheless, to capture this mobile-first or mobile-only market, retailers cannot rely on a smartphone only strategy. To offer m-commerce effectively, retailers need to understand their customer-base, know which handsets they are using, and devise a mobile strategy that spans across mobile apps, mobile web and possibly USSD all running on feature phones, smartphones and tablets.
Retailers should not overlook the huge benefits of bringing mobiles into their bricks and mortar stores. This cannot only give them a competitive edge over their rivals but can help them profile customers, manage inventory and reduce the costs of servicing customers.