E-commerce: Social and Mobile Impact

It is most likely that you are engaging in most of your internet browsing activities through your smartphone or tablet. Moreover, you are probably spending enough time on popular social networks as well, like Facebook, Twitter and Instagram. These everyday habits of internet users have a profound impact on the way internet services are designed, developed and ultimately delivered to both consumers and businesses. E-commerce is no exception to this rule, which is the reason why it’s going both mobile and social. Enterprises are therefore concentrating on mobile-first and social media strategies as part of their e-commerce activities. To this end, we highlight the drivers and implications of both mobile and social commerce.

Mobile Commence: Drivers and Implications

Mobile commerce (M-Commerce) refers to business activities and transactions that are conducted from mobile devices. It is driven by the usual factors that drive mobile-first strategies, including the widespread availability of smartphones and tablets, consumers’ cultural shift towards using their mobile device as internet access channel, the increased mobility of the consumers, as well as the rise of a mobile workforce in several industrial sectors. Moreover, M-commerce is propelled by the availability of increased bandwidth, the state-of-the-art mobile communications and the push from device vendors and telecommunication providers, which target to increase the traffic in their networks. M-Commerce offers distinct benefits to consumers, including ubiquitous access to e-transactions, convenience and personalization based on the users’ profiles in mobile cloud platforms (e.g., iCloud) and their location.

M-commerce applications are found in different sectors, such as:

• Financial Services: Prominent examples include mobile banking applications, which enable customers of retail and investment banks to view and manage their products and transactions. Apart from this mainstream use case, there are also more specialized m-commerce services, such as the provision of support for low-amount payments, which is coined “micro-finance”. Furthermore, in recent years, there has been a growth in the number of proximity payments that are concluded based on mobile devices and digital wallets, such as payments based on NFC (Near Field Communications) technology.
• Business to Consumer Transactions: Similar to conventional web-commerce, it’s nowadays possible to purchase products using your mobile device. An increased number of retail transactions are made through mobile devices, every day.
• Advertising and Marketing: Nowadays, a great deal of marketing and advertising campaigns are targeted towards mobile users. These are dependent on the delivery of customized content through an ecosystem of popular apps. Another example of marketing apps are the apps which involve management of loyalty interactions through digitized cards and coupons.
• Entertainment: Many users take advantage of their mobile device to access entertainments services, including content, media and games. In several cases, these services are offered to consumers for a fee, which is paid through their smartphone or tablet.
• Information services: Access to information on a mobile device comes in various forms such as mobile yellow pages, maps, shopping guides and travel planning apps. Moreover, these information services can be blended into entertainment services towards providing mobile infotainment services.
• Location based services: Location based services form a special class of m-commerce applications, which use the location of the consumer in order to personalize the application. In principle, all the above-listed applications can leverage location in order to enhance the user experience. For example, in the finance sector, the user’s location can be used for verifying the validity of the transactions and reducing fraud. In particular, transactions from strange locations other than the user’s usual location, can raise suspicion and alerts. Location-aware applications come in two flavors, namely network-based positioning and terminal based positioning applications. Network-based positioning applications exploit base stations in order to find the location of mobile devices and subsequently of their users. On the other hand, terminal-based positioning calculates the location of a user based on the signals that are sent by his/her device to base stations.

The Social Commerce Dimension

In addition to M-commerce, modern e-commerce infrastructures take advantage of users’ presence on social networks in order to enhance the user engagement and functionalities of services offered to the consumers. Collective intelligence from social media is exploited in order to personalize mobile and location aware services.  Key to this engagement is the establishment of a strong and user-friendly presence on social media, which will be appealing to consumers and will motivate them to interact with other users and the brand. Enterprises with a critical mass of social media followers are able to elicit and use large amounts of information about their brand. For example, they can tap into the collective intelligence of users by processing comments and feedback about the e-commerce site. Moreover, they can map and measure relationships and information flows among consumer groups and the products and services that these groups use.

Overall, social networks improve the effectiveness and business value of e-commerce transactions through:

• Building better customer relationships, based on frequent interactions on the various social media platforms.
• Facilitating recruiting and retention, as social networking sites provide excellent opportunities for generating leads and pushing offers and other benefits to consumers.
• Effective community building, as social networking groups provide the means for creating and managing vibrant communities of interested consumers and customers.
• Providing a channel for disseminating expert advice, which is often sought by consumers not just before, but also after their purchases.
• Improve trade show presences and experience, as it is common for enterprises to manage interactions with potential customers through social media channels and groups.

Mobile and Social Commerce: A powerful mix

E-shop operators need to look at effectively integrating mobile and social commerce into their business strategies. Mobile commerce and social commerce should be seen as both technological and business disciplines. Under this prism, they should consider the limitations of mobile and social commerce. In the case of mobile commerce, such limitations have to do with Human Computer Interaction issues (i.e. poor user interfaces), as well as with the power consumption of the m-commerce apps, which can lead to frequent recharging of a users’ device. Likewise, bandwidth limitations should be taken into account as an element of the reliability of the various transactions. All these limitations can be solved, yet the solutions have an impact on time, effort, user experience and the calculated ROI, which makes the overall exercise challenging. Once these challenges are addressed the business value of incorporating mobile and social ecommerce will be high and yield unprecedented results.