April 28, 2014, 1:02 PM

E-commerce and m-commerce: The next five years

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Eventually, additional web-connected devices in the home and car will play important roles in online shopping, as smartphones and tablets do today. These other devices include smart TVs, mirrors, shoes, washing machines, refrigerators and others, Ask says, describing what many call “the Internet of Things.” “All of these devices will be connected," she says. "One utility they will offer is commerce: Think automatic replacement of ink cartridges or new running shoes or adding milk to the grocery list."

Some research firms are bullish on the Internet of Things (which excludes PCs, laptops, tablets and smartphones). IoT will grow to 26 billion units installed in 2020, representing an almost 30-fold increase from 0.9 billion in 2009, according to technology research firm Gartner Inc.

"The growth in IoT will far exceed that of other connected devices. By 2020, the number of smartphones tablets and PCs in use will reach about 7.3 billion units," says Peter Middleton, research director at Gartner. "In contrast, the IoT will have expanded at a much faster rate, resulting in a population of about 26 billion units at that time."

But Gartner does not break out forecasts by type of web-connected device or by industry, such as retail. Gartner also expects that "ghost" devices with unused connectivity will be common. This will be a combination of products that have the capability built in but require software to "activate" it and products with IoT functionality that customers do not actively leverage. In other words, many consumers may have web-connected devices but will not be using them or will not have all the technology required to make IoT devices function.

Cisco Systems, which calls IoT the "Internet of Everything," expects 50 billion IoT units by 2020. However, even the CEO of the research firm, Beecham Research, that put together the studies upon which Cisco based its expectations, says IoT estimates today may be absurdly high, saying errors in forecasts on this very new type of technology are potentially enormous.

The Internet of Things will not become commonplace during the next five years, maybe not even in the next 10 years, some experts predict.

"The general reaction to Google¹s acquisition of Nest shows that it's one thing to be invasive on a mobile device, but it's another thing entirely to be invasive about things that go on in the home," says Baird. Nest offers web-connected thermostats and smoke detectors. "It will take 10 years at least for ‘Internet of Things’ devices to be useful enough and prevalent enough to wear down consumers' objections to companies controlling things inside their homes. Plus, we¹re going to have to go through a lot of innovation and then consolidation before these web-connected devices get useful enough."

While the Internet of Things may indeed have a major effect on the way people shop online, it's mobile commerce that stands to benefit from the proliferation of web-connected devices in the home that can track products, some experts say.

"The information from Internet of Things devices in some cases will influence or inform retail purchases; for example, a smart appliance notifying a consumer via smartphone alert that parts or service is required, and enabling the consumer to place an order through an app on the phone," says Middleton of Gartner. "Smartphones and tablets are more practical and this will continue to be the case."

However, one newer web-connected device is likely to gain quite a bit of ground in the next few years. That device is the Internet-connected, or smart, TV. In the United States, web-connected TVs will be in nearly 53 million American households by 2016, accounting for 43% of all U.S.televisions, according to new data from research firm BI Intelligence. Globally, shipments of smart TVs will reach a tipping point in 2015, when they will overtake shipments of traditional TVs, BI Intelligence forecasts.

When it comes to the future of e-commerce and m-commerce, chain retailers cannot afford to overlook the "glue opportunity" mobile commerce affords, Baird says.

"Mobile is as much about bridging physical and digital as it is about enabling digital," Baird says. "The one nut retailers have not yet truly figured out how to crack is mobile as part of a physical shopping experience. Some retailers don’t want to encourage a combined experience because they’re afraid of showrooming. And some retailers just have very little imagination when it comes to how to use mobile to drive a more convenient or more engaging in-store experience."

Baird says she is still waiting for a chain retailer to create a compelling combined store, online and mobile shopping experience.

"I haven’t seen one yet that gets me excited," she says. "Too much of it is still tech for tech’s sake, and not yet focused on delighting or engaging the shopper, or saving her time or money. So that 'glue experience' could, like the Internet of Things, also easily be 10 years away. And I fear it's going to be up to one retailer to come along, an upstart, like a Moosejaw Mountaineering or the next Moosejaw, before the retail industry gets shaken out of its apathy when it comes to digital, mobile and store."

Some chain retailers are innovating, though, with the use of touchscreen windows and tablet kiosks that help shoppers in-store. Not to mention add to the number of contexts and locations retailers must serve.

Schueler of Usability Sciences delivers the bottom line for the next five years and beyond. "Mobile devices—smartphones and tablets—will evolve," he predicts. "Wearables and the Internet of Things eventually will disrupt. Analog in-store experiences will go digital. And businesses that embrace 'contextual commerce' will thrive."

Follow Bill Siwicki, managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.

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