Evolution of E-Commerce to M-Commerce - Dissertation Example

Evolution of E-Commerce to M-Commerce Introduction One of the most significant transitions that the global retail industry is undergoing in current times is the slow but steady shift from retail e-commerce to m-commerce. Examination of the global retail industry from the past five years shows that e-commerce is a major game changer with a growth rate almost three times that of retail (Lee, 2013:14). The transition hardly comes as a surprise owing to the fact that several business and established brands have already completed the migration of all or part of their business units online in order to acquire more market share and to magnify their brand presence. However, the field of e-commerce has been hit again by a significant development: m-commerce. With more than 20 percent of total online revenue coming from handheld gadgets, enterprises are now doubling their efforts in establishing mobile optimised e-stores and websites to serve clients on-the-go. Today, businesses are committing a large percentage of their research and development (R&D) efforts and budgets on how handheld gadgets influence consumer behaviour and spending patterns (Lee, 2013:17). Researchers argue that the growth of m-commerce will triple in the next five years, meaning that the impact of handheld gadgets on our businesses’ and individuals’ daily activities is huge. It is also surprising that the pattern of m-commerce is not diverting the focus of sales away from e-commerce; it is adding more value to its operations. Studies reveal that about 90 percent of clients use their smart devices in order to make inquiries about products, their features and their prices (Lee, 2013:19). The on-the-go convenience and ease allows consumers to compare and contrast various products as easily as they would do it in a physical store that they walk into any time they want to. Further, besides pre-shopping activities, consumers make use of smart devices while shopping in outlets. The fact is that m-commerce is improving the general in-store experience and enabling companies to connect with their clients more closely. Businesses can develop more intimate connections with their customers when it comes to understanding them and meeting their needs. This, in turn, drives and will continue driving sales in the foreseeable future. Considering these facts, the biggest question arising is now whether businesses are paying enough attention to their mobile platforms or not (Lee, 2013:23). Based on a study of a number of small enterprises in the United States, the findings show that 60 percent of them lack a plan to replicate their businesses online. In addition, commercialisation does not form part of their strategy because they feel that their companies and resources are not enough to support such expansion. The crux of this analysis is that no matter the size of a business, m-commerce is slowly replacing e-commerce and it is therefore not advisable to stick to e-commerce religiously while rivals gain competitive advantages by adapting to the trend (Lee, 2013:29). M-commerce has been shown to provide consumers with a multifaceted and multichannel experience which improves companies’ customer service skills and services and increases their general strengths. M-commerce will create even more opportunities in the coming years. Besides reducing the outlay associated with staffing, it will also allow businesses to monitor their client locations and to provide them with the stock that is most readily available in those areas. The growth of m-commerce is evident everywhere, whether it is commuters buried in their Smartphones on the subway, consumers buying household items on their phones to avoid the hassle of going to the store and carrying them home, or Amazon’s newly launched Smartphone that is aimed at solidifying then increasing its market share among young to middle-aged consumers. The interesting fact is that m-commerce is actually using e-commerce to rival e-commerce; it is simply providing a different medium for the operation of online businesses (Singh, 2014). Directly or indirectly, m-commerce is improving and usurping e-commerce. With the increase in production of mobile devices and the declining costs of buying internet-enabled mobile gadgets, millions – if not billions – of people across the world are buying into the m-commerce trend. It is no longer compulsory that consumers own laptops and personal computers (PCs) before they can participate in e-commerce. A 2013 study sponsored by the US department of commerce showed that m-commerce is on a rapid rise and is significantly impacting the way consumers shop online (Laudon and Traver, 2013:24). Handheld gadgets are replacing e-commerce and diverting traffic from personal computers to mobile phones and other gadgets. The findings of the study also showed that in the past four years, the US m-commerce market has grown 19-fold. This is represented by a jump in revenue from just $2.2 billion in 2010 to a monstrous $42.8 billion last year. This symbolises a growth of 1875 percent in just four years and a 111 percent four-year compound annual growth rate (CAGR). In fact, there is no other sector in the world that has recorded such growth in such a short time, not even e-commerce in its pomp came close to such figures. This year, m-commerce started strongly with over $12 billion in sales in the first quarter alone. Industry analysts and researchers expect that m-commerce-driven sales will reach $50 billion by the end of the year (Shepherd, 2014). By the end of the first quarter of 2014, handheld devices supported 36.9 percent of traffic to online shopping stores. This represents a 3.4% jump from the start of 2010. Another important fact is that consumers replying email marketing and those going directly to e-commerce stores – including app traffic – represented the highest percentage of purchases on phones. Email marketing supported by mobile phones recorded 26.7 percent of e-commerce sales; tablets took in 23.1 percent and PCs just 20.9 percent (Shepherd, 2014). This is a major development because in the past email correspondence was restricted to PCs and laptops, but now consumers can receive and respond to emails on the go. In addition, they can set their phones to display emails whenever and wherever they receive them, negating the need to log in to their accounts repeatedly. Conclusion From the evidence presented in this paper, it is clear that M-commerce is usurping e-commerce as the leading online business medium. In the coming years, m-commerce is likely to complete its takeover and usher in a new era of mobile phone and tablet domination. The question, for businesses, is whether they are ready for the transition and to benefit from this potentially enriching development. References Shepherd, K. (2014, July 28). Mobile E-Commerce Hits All-Time High: New Custora E Commerce Pulse Report, viewed November 18, 2014, from . Laudon, K. & Traver, C. (2013) E-commerce: business. Technology. Society (9th ed., Global ed.), Boston, Mass., Pearson. Lee, I. (2013) Mobile services industries, technologies, and applications in the global economy, Hershey, Pa., IGI Global. Rossi, B. (2014, October 24) Why do retailers still not see mobile commerce as a priority? | information age, viewed November 18, 2014, from . Singh, S. (2014, October 21) Companies devise new strategies to keep pace with rapid rise of mobile commerce, viewed November 18, 2014, from . Read More