Reflective Journal

In this blog I will be discussing m-commerce and the rise of mobile marketing.

M-commerce refers to the use of wireless devices such as mobile phones for informational or monetary transactions (Chaffey et al, 2006).

“Smartphone growth between 2009 and 2011 has been exceptional, with an almost 100% increase in sales growth year on year. The applications built for and hosted on smartphones are key to the devices’ popularity, as they allow users to turn their phones into multifunctional tools, capable of locating restaurants, price checking items, connecting with friends and more” (Mintel, 2012).

2.0 Reflective Journal

The mobile phone market in the UK is a large target, with 91% of the population of the UK owning a mobile phone (a larger percentage than the 85% who have a fixed line) (Mintel, 2012). For marketers this is a prime market to tap into, as mobile marketing and m-commerce is still in its infancy, whilst fixed line ownership has been slowly falling, and was overtaken by mobile ownership in 2008 (Mintel, 2012).

That said, the market is not set to grow further in the near future, as it is fair to assume that consumers who do not currently own a mobile phone do so either because they do not want one, or because they cannot afford one. Many of these consumers without phones are likely to be OAPS, and an aging population within the UK will lead to further slow growth (Mintel, 2012).

The next digital market set to grow is the tablet. The market is still relatively low, in October 2011 just 9% of consumers owned one (Mintel, 2012), however the market is still rising fast, as in July 2011 only 5% of consumers owned one.

One great benefit to marketers and consumers alike is ‘location based marketing’, in which customers receive messages on their mobiles which are relevant to their geographical location (Chaffey, Smith, 2008). The benefit of this to the company is that it cuts down on needless spending, and the benefit to the consumer is the information they have received is relevant.
“Mobile traffic currently makes up 10% of global Internet traffic, and next year more people will use mobile phones than PCs to get online, according to Gartner. Purchases made on mobile devices amounted to $6.7 billion in the U.S. last year, or about 8% of total online sales, and are expected to nearly double to $11.6 billion this year. By 2015, U.S. mobile sales are forecast to reach $31 billion” (Indvik, 2012).

The use of smartphones for online purchasing is being performed more and more frequently by consumers. With 62% of Britons now owning a smartphone (Mintel, 2013), and 49% of these consumers using the device for online shopping, the market size is clear. The challenge for developers of mobile friendly purchasing sites is trying to get consumers to purchase more premium products over mobile devices, as at present m-commerce is mainly used for smaller purchases (Mintel, 2012).

Another challenge for mobile marketers is how to appeal to younger smartphone users. According to Mintel, 75% of 10-11-years-olds have a mobile and over the age of 12 the proportion is almost 100%, with over half of these phones being smart phones. The market for games created as apps is huge, worth £102 million in 2012 (Mintel, 2012). Given that around 80% of these applications are free, marketers must work to include certain advertisements within these games, whilst not making them annoying for the user.

Due to the rise in the use of the mobile phone as a ‘digital wallet’, companies have had to start creating websites which are ‘smart phone friendly’. This means that users will be able to navigate freely and easily on their mobile, without having to scroll in to view the page at the correct size. Social media news website Mashable conducted a study of 1088 US smart phone owners, and found that;
• Mobile sites lead to mobile purchases
• If your site isn’t optimized for mobile, shoppers will go elsewhere
• A bad mobile experience can damage a company’s brand

This push on mobile friendly websites has led developers to create innovative new systems which combine the efficiency of the full website with the ease of the mobile web. Businesses such as restaurants, news websites, banks, social networks, Google, YouTube, and many others have adapted their websites in order to gain a larger market share.

BBC News App

Mobile Web vs. Regular Web

Many companies have started introducing their own apps as a way of targeting the mobile market. In the UK in 2012, mobile app downloads rose to 567 million (Mintel, 2012). A Great example of an effective business app is the Barclays banking app. This app is used to administer online banking transfers and keep check on the users balance, and is available on smart phones and tablets.

Barclays Mobile App

One great tool which the mobile marketers currently possess is the consumers ‘love’ of smartphones. A study by Ofcom found that currently 37% of adults and 60% of teenagers claim to be “addicted” to their smartphones (mintel, 2012). With such a large market in which to operate, it is no surprise that m-commerce is growing at an accelerating rate. It is fair to say that those companies who dedicate investment and attention to this trend are likely to benefit.

The popularity of smart phones has led to rivalry between competitors, who are trying to ‘out-do each other’ by releasing more and more modern and innovative smartphone features. Current features such as high mega pixel camera’s, built in MP3’s, Apples Siri, and built in HD screens are available, as retailers use these add-ons to “try to secure the four in ten UK consumers who have not yet converted to smartphone ownership” (Mintel, 2012).
The next ‘big thing’ within the mobile world is the mobile wallet, which will be a system for mobile payments. It is possible that the introduction of the mobile wallet will ‘bridge the gap’ between smartphone users and regular phone users, who now have more of an incentive to switch formats.

Chaffey, D. et al (2006). Internet Marketing. 3rd ed. Harlow: Pearson Education Limited. p124-5.
Indvik, L. (2012). How Important is a Mobile Optimized Site for Your Business?. Available: http://mashable.com/2012/10/10/mobile-site-small-business/. Last accessed 30/04/2013.
Chaffey, D. Smith, P (2008). eMarketing eXcellence – planning and optimizing your digital marketing. 3rd ed. Oxford: Butterworth-Heinemann. p197-9.
Mintel. (2012). Mobile Gaming Applications – UK – February 2012. Available: http://academic.mintel.com/display/612893/?highlight=true#hit1. Last accessed 30/04/2013.
Mintel. (2012). Smartphone Purchasing Habits – UK – November 2012. Available: http://academic.mintel.com/display/645211/?highlight=true. Last accessed 29/04/2013.
Mintel. (2012). Mobile Phone Retailing – UK – January 2012. Available: http://academic.mintel.com/display/609631/#hit1. Last accessed 29/04/2013.
Mintel. (2012). Mobile Phone Apps – UK – June 2012. Available: http://academic.mintel.com/display/627025/. Last accessed 30/04/2013

Advertisements

~ by jeffreyalcock on May 2, 2013.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: