Role of M-commerce in Retailing

This case study explores the role of M-commerce in retailing and its impact on the industry. It discusses the benefits of M-commerce, such as easy store access, better user experience, cost reduction, and a new marketing platform. It also explains why retailers invest in M-commerce technologies and the challenges in managing them. Additionally, it explores the future of AI and AR in M-commerce and L-commerce.

Case study on Mobile
Commerce

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Discuss the role of M-commerce in retailing..........................................................................1
2. Why do retailers spend much of their IT budget on developing/implementing M-commerce
technologies?...............................................................................................................................2
3. What are the difficulties in managing these mobile technologies?.........................................3
4. What is the future of AI and AR in M-commerce and L-commerce?.....................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
M-commerce can be termed as the percentage of online purchases and commerce which
takes place through various types of mobile devices that includes tablets, smartphones or
portable devices such as smartwatches (Sadeh, 2003). In the following case study, importance
and significance of M-commerce is being determined by analysing its various dimensions.
MAIN BODY
1. Discuss the role of M-commerce in retailing.
It can be argued that technology has witnessed one of the biggest waves in this decade
which has changed the dynamics of every industry. Importance and role of M-commerce in the
retail industry sector can be comprehended with the help of following points:
Easy store-access: M-commerce has a crucial role to play in providing the ease of access
and the customers can purchase and discover products and services using smartphones at the
comfort of sitting at their homes and without the need to travel physically (Clarke III, 2008). In
the retail sector, this role of M-commerce has certainly increased the number of purchases being
made and the extent of commercial activities I an economy. Increasing accessibility is a major
role of M-commerce in the retailing sector.
Better user experience: Using seamless technologies that allows the user to demonstrate
cross-devices behaviour and make purchases using multiple devices such as discovering the
product and adding the product to cart using smartphones and making the payment using tablets,
the customer experience of retailing increases and enhances (Ghinea and Angelides, 2004). M-
commerce plays a major role and provides the customer an opportunity to review alternate
products and services which adds to the final consumption experience of the user as well.
Cost-reduction and profitability: M-commerce also plays a significant role in reducing the
cost of retailing for the producer and manufacturer of goods and services with the help of online
sales. In-store demonstration costs, salaries and wages, print letter, brochures etcetera share a
huge part of company’s expenditure which can be reduced with the help of M-commerce in
retailing (Dezoysa, 2001).
Marketing platform: One of the most important role of M-commerce in retailing is the
creation of an alternative marketing platform which is very effective in providing information
about the products and services of the company to the potential customers where the customers
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can also make real-time purchases. Push-notifications enables real-time interaction with the
customers using M-commerce channels. Also, it has been observed that users generally share the
products and services listed on mobile application developed by retailers with their friends and
peers which results in marketing efficiency for the retailer.
2. Why do retailers spend much of their IT budget on developing/implementing M-commerce
technologies?
M-commerce in retail industry is growing at a very rapid rate which reflects the changing
aspects of consumer buying habits as well as the increasing investment being made by retailers
in mobile technologies. The rationale behind the increasing investment in M-commerce
technologies by retailers can be understood with the help of following discussion:
(Figure 1: M-commerce total sales and share of E-commerce, 2018)
The above graph represents the rise in M-commerce sales as a percentage of total e-
commerce sales from 16% in 2013 to 34.5% in 2017 which is expected to increase up to more
than 50% by the year 2021. Seamless technology and the increasing demand of consumers to
indulge in purchase and shopping using mobile applications and M-commerce drives the
increasing investment being made by retailer in developing M-commerce technologies. Along
with the clearly increasing demand with respect to M-commerce technologies, some of the
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important factors influencing increased investment as a part of total IT budget by retailers in M-
commerce technologies are being discussed as follows:
Customer data: One of the primary incentive for retailers in investing into M-commerce
technologies is the access to customer data. While signing up on mobile applications and distinct
promotional and customer loyalty programs on these apps, a wealth of data and information is
being shared by the consumers with respect to their profile and buying behaviours (Safieddine,
2017). This data is used by the retailers to understand their customers in a better manner and
provide tailor-made products and service for matching demands and needs.
Increasing access to smartphones and internet: Access to smartphones and internet
technology has increased exponentially in this decade and a majority of consumers now have
anytime access to smartphone technology. This has further increased the demand by consumers
to shop using these technologies inspiring the retailers to make significant investments in M-
commerce technologies. Increasing access has fostered consumer behaviour of anytime shopping
and checking out various products and service while on-the-go which motivates investment into
such technologies.
Mobile application versus websites: E-commerce using websites has opened up a new
sales platform for every business organisation and it is essential for retailers to invest in online
sales channel and technologies. Comparing the user-interface and experience on mobile
applications with websites, investing into M-commerce technologies come out as a better
alternative for retailers due to seamless connection and comfort and as a result, investment into
M-commerce technologies in rapidly increasing (Wong, 2012).
3. What are the difficulties in managing these mobile technologies?
With the increased adoption and inception of M-commerce technology by business
organisations and retailers, problems and difficulties being faced while managing these
technologies have been identified that are being discussed below:
Data privacy and security: One of the major challenge with respect to management of M-
commerce technology is the potential theft of customer data and breach of privacy. Internet
security is a very challenging task which requires constant upgradation and monitoring by
technical experts. M-commerce application relies on heavy consumer data for a better quality of
service and in most of the situations, access to this data is available for people with no technical
skills which could increase the risk of security breach and data theft (Niranjanamurthy and et. al.,
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2013). Data theft can result into heavy fines and penalties and also affects the image and
goodwill of a retailer in adverse manner.
Payment Solutions: Initially, only a limited number of payment alternatives were being
provided to the customers on M-commerce applications but since the inception of mobile
wallets, it has become imperative for the retailers to provide a range of different alternative
payment options available to customers which makes the task of managing M-commerce
technologies more difficult (Sharma and Kansal, 2012).
Constant optimisation: For security and interface concerns, M-commerce technology and
applications needs very frequent updates which involves a huge amount of expenditure
increasing the total cost of managing these technologies very high for retailers. Moreover,
constant updates and optimisations also requires the user to re-install the application which might
reduce the number of active users on M-commerce technology after every successive update.
Simplifying buying experience: M-commerce technology has resulted into a wide range of
choices and alternatives of different products and services for the customers. Lack of physical
touch and sense in M-commerce makes the buying decision difficult for customers particularly in
the case of consumer goods such as clothes or fabrics. Hence, managing mobile technologies in a
very effective manner is a difficult task which requires integration of more advanced technology
to assist the customers in decision-making process.
4. What is the future of AI and AR in M-commerce and L-commerce?
Augmented Reality:
Augmented reality has huge potential of integration with the M-commerce applications to
facilitate the process of consumer decision-making. Physical touch and lack of sense still remains
one of the biggest challenge for consumers during purchase decision-making using M-commerce
technology. Increasing use of AR and its growth in M-commerce is expected in future. For
example, with the help of AR technology, users can superimpose pictures of the products and
services on their own images to make a better purchase decision (Atalar and Özcan, M., 2017).
AR has witnessed a huge growth in the M-commerce spectacles retail sector which provides the
customer an opportunity to try and evaluate different frames. In future, AR headsets can be used
by customers to evaluate different outfits and have a similar experience to in-store shopping. Use
of AR is also expected to increase in L-commerce where users can inspect a store or restaurant
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using augmented reality and the decision to purchase from that local store can be enhanced based
on the store’s physical elements.
Artificial Intelligence:
Use of Artificial Intelligence in M-commerce and L-commerce is expected to witness an
immense growth in future. AI technology can be used by M-commerce retailers to provide better
quality of customer service by virtually appointing a representative to assist the customers in the
process of decision-making. Use of AI can also be extended to the customer complaint
management in case of M-commerce using automated feedbacks. In the future, AI can also
enhance the experience of customers by substituting to execute the role of providing
recommendations and saving the consumer time and making the M-commerce shopping
experience more fun and interesting (Keegan, O’Hare and O’Grady, 2008). Use of AI will also
extend to L-commerce where the users can get automated responses and search results for sorting
out local sellers and manufacturers of the products and services that they sought.
CONCLUSION
It can be concluded that M-commerce has witnessed an exponential growth in this decade
with the increased access to smartphones and mobile devices. Growth in M-commerce is
anticipated to rise in future which has influenced the increased expenditure made by retailers in
M-commerce technologies. There exist some difficulties in managing these mobile technologies
such as data theft and privacy matters. At last, it can be concluded that Artificial Intelligence and
Augment Reality have a huge potential considering the future of M-commerce and L-commerce.
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REFERENCES
Books and Journals
Atalar, M. and Özcan, M., 2017, October. New augmented reality application in E-commerce
and M-commerce. In 2017 International Conference on Computer Science and
Engineering (UBMK) (pp. 332-336). IEEE.
Clarke III, I., 2008. Emerging value propositions for m-commerce. Journal of Business
Strategies. 25(2).
Dezoysa, S., 2001. The cost of m-commerce. Telecommunications. 35(7). pp.10-10.
Ghinea, G. and Angelides, M.C., 2004. A user perspective of quality of service in m-
commerce. Multimedia Tools and Applications. 22(2). pp.187-206.
Keegan, S., O’Hare, G.M. and O’Grady, M.J., 2008. Easishop: Ambient intelligence assists
everyday shopping. Information Sciences. 178(3). pp.588-611.
Niranjanamurthy, M., Kavyashree, N., Jagannath, S. and Chahar, D., 2013. Analysis of e-
commerce and m-commerce: advantages, limitations and security issues. International
Journal of Advanced Research in Computer and Communication Engineering. 2(6).
pp.2360-2370.
Sadeh, N., 2003. M-commerce: technologies, services, and business models. John Wiley & Sons.
Safieddine, F., 2017. M-commerce. Innovations in e-systems for Business and Commerce,
pp.227-243.
Sharma, A. and Kansal, V., 2012. An analysis of mobile transaction methods and limitations in
execution of m-commerce transaction. International Journal of Computer
Applications. 43(21). pp.14-19.
Wong, S.H.R., 2012. Which platform do our users prefer: website or mobile app?. Reference
services review.
Online
M-commerce total sales and share of E-commerce. 2018. [Online]. Available
thru<http://www.cbre.us/real-estate-services/real-estate-industries/omnichannel/the-
definitive-guide-to-omnichannel-real-estate/by-the-numbers/what-is-the-role-of-m-
commerce-in-retail-sales>
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