According to latest Booz & Company report, companies need to work together to achieve credible scale required for mobile commerce success
London, 14 September 2011 –Mobile phones will replace physical wallets faster than anticipated, if companies collaborate effectively. Technology advances and changing user behaviour indicate that developed markets are ready for mobile commerce to take off. Much broader than just a “new way to pay”, m-commerce will transform the customer experience of both online and high street shopping. Much suggests that it will follow a shorter adoption curve than e-commerce did a decade ago. The study, “mCommerce Comes of Age: Collaborate to Succeed” by global management consultancy Booz & Company concludes that companies should collaborate in order to win in this rapidly developing market.
There has recently been a flurry of activity as companies recognise the potential benefits of providing m-commerce services. Many are looking to launch multi-functional “mobile wallets” that combine payment solutions promotional offers and loyalty programmes. The breadth of services being brought together is leading a diverse range of companies to bring mobile wallet propositions to market, including Google, eBay, Visa, Bank of America and many mobile operators such as Telefónica and Deutsche Telekom. This has created a new dynamic where players from previously distinct industries are now in a position to compete or collaborate.
For a mobile wallet proposition to achieve mass adoption, it must meet the needs of all those in the m-commerce ecosystem, which includes not only consumers but also retailers, advertisers and banks. Merchants and suppliers are looking for a one-stop-shop that removes complexity and its associated costs, and provides quick and easy access to a large proportion of the population. The next 18 months will be critical time in the evolution of m-commerce as a variety of players strive to achieve credible scale. Michael Knott, Partner at Booz & Company says, “Our latest report highlights that while many companies are seeing m-commerce as a strategic priority, few will find themselves in a sustainable, value-accruing position. For most, the only way to win at scale is through collaboration. It is through collaboration across all elements that a mobile wallet proposition will come to the fore - one that can revolutionise the customer experience, facilitating a much deeper and more sustainable relationship with the end consumer.”
There have already been various announcements of collaborations across the world. In the UK the top three mobile operators Vodafone, O2 and Everything Everywhere have come together in an intra-industry Joint Venture. Elsewhere we have seen many different tie-ups whether between banks and mobile operators (such as Turkcell and Garanti bank in Turkey) or internet giants and financial schemes (such as Google and MasterCard in the US). Knott’s view is that there is no single correct make-up of a national, scaled m-commerce proposition, adding, “We believe that collaboration is necessary to create a workable proposition in most markets. In each country, it is still unclear what this proposition will consist of, or who will create it. What is clear, however, is that it is unlikely to be driven by a single company in isolation.”