The Future (and Past) of M-Commerce

Most cell phone users don’t feel comfortable with ads on their phones. That is, users aren’t comfortable enough to actually reach out and buy something. Industry wisdom has held that it will take as long for people to embrace m-commerce (“m” as in mobile) as it took them to embrace online ads on their PCs.

And don’t let the streets of New York and Los Angeles fool you: not everybody is reaching into a handbag or coat pocket in response to beeps and chirps. As of October of last year (Adweek, Oct. 2), half the country didn’t even own a cell phone, and the rate of cell phone users claiming that they were “uncomfortable” receiving wireless ads was as high as the number of households whose phones lacked the capacity to deliver any Web advertising at all.

Sadly, if you’re an m-commerce advertiser, the news hasn’t gotten any better. According to a new report from New York-based Jupiter Media Metrix, only seven percent of consumers stated a desire to conduct a purchase over their cell phones.

The report states that last year less than 100,000 out of the 6.25 million consumers who owned Internet-ready wireless devices (i.e., PDAs or handsets) actually used these devices to make purchases. What is more, the number of U.S. consumers making wireless business transactions is not expected to exceed one million until late 2002.

The reason? Dylan Brooks, Jupiter wireless analyst, said you can’t blame the technology any longer. “The actual culprit is consumer apathy,” said Brooks.

–Not all the wireless news is hopeless. JMM analysts predict that the shopping content on mobile phones will “influence” online PC sales and offline brick-and-mortar sales. These sales are expected to reach $39 billion in 2006.

–Cell-phone users like to buy timely gifts on their phones, but only occasionally. Sales conducted over cell phones this year are expected to be driven largely by flowers, airline tickets and tickets for entertainment events.

–More people might make purchases over their cell phone if they felt the transactions were secure. Thirty-three percent of consumers who own portable devices with wireless capability will not engage in mobile commerce because they are wary of paying by credit card or giving out payment info.

Source: Jupiter Media Metrix