E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
More wireless carriers and mobile shoppers have been signing on with a flowering m-commerce technology, from companies like Obopay and Click&Buy, that enables users to complete online purchases via mobile phones.
Mobile commerce, a subset of electronic commerce, is on the rise. An increasing number of Americans are purchasing digital content as well as merchandise via their mobile phones-a practice already commonplace overseas in countries such as Japan and Brazil. Needless to say, users must pay for their m-commerce purchases. But in many cases they’re doing so a bit differently than they do in traditional e-commerce.
There are more than 200 million mobile phones in use in the U.S. today, many of which come preloaded with technology to enable some form of Internet interactivity-instant messaging, e-mail or web browsing (which includes e-retailing); 15% have all three capabilities. At least 100 million phones in use today in the U.S. are “download capable,” according to investment bank Piper Jaffray & Co., meaning they are able to connect to a wireless carrier-based site or Internet-based site to purchase and download digital products such as ringtones, images and games.
Most of the major wireless carriers operate sites on their networks-as opposed to on the Internet-on which users can purchase digital content, paying for it via their mobile service accounts. Further, carriers have begun adding shopping portals, or decks, to their user interfaces. Mobile phone users access the shopping area which enables them to link to m-commerce sites-either wireless carrier-based versions of sites or Internet-based mobile-enabled sites-of retailers that have agreements with the carriers. There shoppers can buy not just digital content but merchandise as well.
To “close the deal,” more wireless carriers and mobile shoppers have been signing on with a flowering m-commerce technology: mobile payment software and systems. Companies such as Obopay Inc., Click&Buy; and UnWired Buyer Inc. already have come to market with mobile payment software that enables users to store payment and contact information in a secure account, then use that account to complete purchases via mobile phones.
The development of mobile phone-based payment systems is another step in the downsizing of items Americans carry or maintain, some experts say. Retailers paying attention to the younger generation are seeing watches disappear from the wrists of teens and young adults, paper address books and calendars in the trash, land-line telephones vanishing, and soon wallets and credit cards sitting at home on dressers, says John BaRoss, vice president of global sales and strategic development at Click&Buy;, operated by Webpay International AG. The company’s e-payment technology is used by 6 million consumers and 6,000 merchants, it says.
“All of these common tools and tasks are being consolidated on mobile phones, which younger people everywhere continuously rely on,” BaRoss says. “In Asia, for example, it is a matter of routine for people to point their mobile phones at vending machines and via embedded RFID wireless technology pay for drinks and snacks. Mobile devices are on their way to becoming the gateway to virtually everything-the alarm clock that wakes you up, the place where you access your e-mail and instant messages, your only electronic communication vehicle, your shopping mall, and much more.”