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Virtual & Augmented Reality

Evolution in Mobile Commerce

The German Federal Government wants to limit cash payments to € 5,000. Retailers are up in arms. Why is that? In the age of mobile commerce, most people pay digitally anyway, and shopping in person is giving way to shopping on the go. This is partly due to the constant innovations in IT.

29 Feb. 2016
Mobile Commerce

An IPSOS study on mobile commerce found that m-commerce is growing three times faster than classic e-commerce, i.e. PC-based online shopping. That is no wonder, as more than two billion people now own a smartphone. This figure will grow to as many as 2.5 billion by 2018 and fundamentally change how we use IT.

Online retailers have been hit hardest by the effects of the mobile commerce trend. In 2014 alone, mobile turnover on grew 110 percent to $ 16.8 billion, for example. That puts the number one in online retail in first place for mobile orders too, followed by Apple at $ 14 billion. Increasingly simple and secure payment systems certainly are one reason for this increase. Besides the pioneer PayPal, many other options have now established themselves on the market, allowing companies to integrate them in their own online store or m-commerce app via APIs. Google Wallet and Apple Pay are just two of the best-known solutions.

By the way, did you know that the average shopping cart total for orders made by smartphone is $ 96, while the average order placed on a tablet is $ 132 . Does a larger screen make people buy more – perhaps because products look better on them? A simple statistic, but one which could be relevant for retailers developing their own apps. It would indicate that tablet-optimized applications are more profitable than universal apps for all mobile devices.

M-commerce meets personal advice

In the past, e-commerce has often been a one-way street. Customers choose products, add them to their shopping cart, order them and are done. The disadvantage is that anyone who is unsure whether the product is right for them is out of luck. Advice is something you get at classic retail outlets. Until now. A new trend is gradually coming to the fore on smartphones: conversational commerce.

Conversational commerce entails integrating messenger services like WhatsApp in a mobile shopping channel. Customers write a short message explaining what they want, and a real customer service agent sends a product recommendation to their phone. For companies like Outfittery, the technology is perfect for their business model, as the clothing retailer combines personal outfit recommendations with an anonymous online mail-order business. By asking "what can I wear to my date tomorrow?" buyers can find what they want much faster than by searching manually.

Facebook is currently expanding its own messenger "M" , to integrate added value services like this better, among other reasons. It will not only enable retailers to send links to their products, but also to integrate a shopping interface, for example. Facebook aims to make the system more convenient, while also increasing the level of automation. Of course, human customer service agents are not needed on the other side. A recommendation algorithm can be just as good.

Autonomous purchase algorithms are on their way

In fact, artificial intelligence will be critical if the boom in mobile commerce is to last. Mobile assistants like Microsoft’s Cortana, Apple's Siri or Google Now could soon make autonomous purchase decisions based on our behavior and preferences. If we believe the estimates by market researchers at Gartner , this will generate an annual turnover of $ 2 billion from 2018 on. Soon, telling Siri etc. "order an exciting thriller" might be all you have to do to receive your new favorite book in the mail the following day.

Hotspot for retailers

The mobile commerce market is developing rapidly, and innovative IT is creating new sales opportunities for companies. CeBIT provides an overview of the technologies. In Hall 5, experts will discuss the future of retail , while pioneering solutions for marketing and sales will be the focus and in Hall 4.