Consumers Attitudes Towards M Commerce example essay topic

'The greatest wealth in the 21st century will not be made from products or services, but rather by the company that creates the conduit for international m-commerce through the mobile device' (Unknown author) As defined by market analysts, mobile commerce is the natural extension of e-commerce that allows consumers to make business via a wireless mode anytime, anywhere and always -on. It uses digital cellular phones, PDAs, pagers, notebooks and even cars can already be online wireless ly, all this developing another channel of the value-added chain. It is the innovation to meet the evolving customer needs of wanting to escape the personal interaction eyeball-to-eyeball pressure of purchasing. In comparison for further distinction, where e-commerce uses the Web on a computer screen to run transactions, m-commerce uses much smaller screens on mobile devices. Mobile Commerce connects business and customers via the Internet through wireless devices, cell phones, Palm Pilots, personal digital assistants, handhelds and basically any wireless device. Many businesses in various mobile industries may find wireless credit card processing very appealing.

These might include those involved in maintenance or delivery services to homes, towing companies, food delivery, transportation services, trade shows, etc. With mobile commerce, you don't need a phone jack or electrical outlet, and transactions basically take only a few seconds to complete. (Coursaris, Constantinos. Hassnein Khaled.

Head Milena. M-Commerce in Canada: An interaction framework for wireless privacy) Wireless credit card processing terminals are available in retail form (to swipe cards) or for real-time keyed in transactions. M - commerce have also become possible to the emerge of the 3 G (third generation) phones that due to their advanced technology make the transition of data between the wired and wireless world possible. The 3 G mobile phones are a key step in the evolution to a Mobile Internet because the technology provides significant gains in network capacity, and speed, which, will, enable advanced video and multimedia services in addition to rapid deployment of m-commerce capabilities through network operators and their banking affiliates. However, if m-commerce is to become a reality, 'it has to save time, it has to be convenient, and it has to work everywhere,' Mike McC amon of the Bluetooth Special Interest Group said. Although mobile commerce has many facets, including the ability to conduct wireless banking, access the Internet or find information on the fly, most consumers now think of it as a wireless wallet -- the ability to make financial transactions at a point of sale using a wireless device.

In this scenario, consumers are recognized by the signals they emit, most likely from their wireless phones or PDAs, and they can purchase goods and services from vending machines and businesses without having to use a checkbook, credit card or cash. But making the wireless wallet a reality will require an evolution of both technology and consumer attitudes that is still far in the distance. Moreover, at the commerce phase, in which consumers should realize that using wireless devices to purchase real goods in the physical world does not necessarily deliver those goods to their wireless device. It will be a challenge to convince consumers to leave their credit cards at home and let their phones do the purchasing. In addition to this, consumers will need easy-to-carry wireless devices that they will always have with them, and terminals will have to be available at stores or in vending machines.

Both of these devices must have the necessary infrastructure to enable transactions. Last, and most difficult, there must be a worldwide standards initiatives. However, the most important aspect is to explain to the consumers, what is their benefit to use the services of m-commerce, instead of the brick-and-mortal practices of credit-card and cash purchasing. (Cell Phones As Credit Card.) Internet doesn't change basic shopping rules In order to assess consumers attitudes towards m-commerce, it is logical to understand in the traditional e-commerce environment how consumers move through their decision making process. Traditional shopping advice urges consumers to obtain a quote on a loan from a bank or other lender before going out to kick tires at dealerships. The Internet can provide online loan applications and calculators that determine monthly payments, how much car consumers can afford and buy-versus-lease comparisons.

However, customers know that some prices on products can be outdated or the increase will not be included, so basically they will be looking at yesterday prices in some cases. Regardless this, the Internet stays as the most valuable source of customer research. The volume of goods being purchased via the Internet is rising. However, while certain consumers know what they want and feel comfortable making an instant purchase, many have questions about product pricing, availability and quality. Increasingly, the latter group is turning to online comparison-shopping sites for help when making a purchase decision. Convenience is a big attraction of these sites.

A user can find information about a variety of products and companies. Biz Rate. com, for example, says it works with more than 40,000 sellers and has information on more than 30 million products. Yet companies such as Biz Rate. com, Pricegrabber. com, Nex Tag and Shopping. com go beyond simply connecting potential customers to desired products. These sites feature up-to-date, side-by-side feature comparisons; written evaluations from individuals who have used different products; availability information, such as who sells an item and whether or not it is in stock; and pricing comparisons, including any shipping charges. The sites try to function like Consumer Reports and provide information about product performance and reliability.

As a result, the online comparison-shopping sites feature reviews written by other consumers. For instance, Shopping. com has approximately 2 million reviews on its network. However, the Internet's anonymity presents potential problems with these reviews: In hopes of boosting its sales, a company could have an employee, relative or distributor contribute a glowing product review, which might influence potential purchasers. 'We do get a few positive reviews from biased sources, but the bigger problem comes from disgruntled employees writing negative reviews,' said Helen Grace, who oversees reviews in Shopping. com's Home and Gardens section.

As a result, many comparison sites have been forced to put some checks and balances in place. If Pricegrabber. com finds that a company has doctored a review, it permanently bans the firm from its site. In addition to collecting information about various types of products, the sites feature links to vendors and retailers, so shoppers are whisked away to e-commerce locations that can take their orders. (Wang, Yi-Shun.

Assessing Customer Perception of Website Service Quality in Digital Marketing Environments.) Is it better? If modern wireless mythology is to be believed, it won't be long before everything in the business world will be linked to the Internet and remotely controlled via cellular phone. People will walk down the street to a chorus of beeps and rings as coupons and ads from nearby shops arrive at their wireless inboxes. Mobile workers will be able to get the latest report from the office, even if they " re cooling their heels in the back of a cab. No wireless device will have a keypad, because they " ll all be controlled by voice commands. What happens in reality?

While the future will indeed be wireless, some of these expectations are likely too great. When observers ponder how we might reach sky-high penetration rates and widespread use of mobile commerce, they often begin at a disheartening point. The quality of today's networks must be dramatically improved if the industry is to achieve its Herculean goals. And they ask this revealing question: If wireless users today think that coverage and voice quality 'stinks', how can they be confident or interested in using wireless data applications tomorrow? The answer lays in the basics of coverage and customer service are ultimately mastered; wireless devices eventually will be widely deployed by enterprises, industry experts say.

But it won't take the super-high-speed data streams promised by third-generation (3 G) networks to achieve that widespread use, and it won't happen until the marketplace better understands how to best use wireless technology. However, it is not the same as the wired Internet. While many enterprises are looking to wireless as an extension of existing Internet strategies, that assumption could be off the mark. The biggest misrepresentation in the entire wireless world may be that people are approaching it from trying to figure out how to replicate the wired Web experience on a personal device. That inevitably results in coming to the wrong answer and services that aren't compatible. It's not a new platform for weather reports, but a new business model, a new way to interact with businesses.

The slew of companies that once emerged hoping to make it easier to translate the Web to the wireless Web missed one important step. 'No one bothered to ask the consumers what they wanted,' said Roland Van der Meer, a partner of venture capital firm Com Ventures. 'It's a classic case of the engineers leading the charge. ' Currently, there's less value to be gleaned from corporate wireless applications because network coverage isn't pervasive and transmission is excruciatingly slow. For example, companies that might want to deploy specialized applications for workers who visit remote areas of the country might not be able to take advantage of wireless. Regardless of speed, the networks of the future will have one important characteristic that will be key to improving the end-user experience: They " ll be packet-based.

Most of today's wireless data offerings that are delivered over the traditional voice networks use circuit switched technology, so users must essentially dial up to use many wireless data applications, similar to using a dial-up landline connection. In the example of wireless e-mail, messages sit at a server until the user dials up to retrieve the messages. Navigating through a wireless Web site requires the device to dial up to the network with nearly each button click on the phone. Packet data will enable more instant delivery of information and a smoother user experience. Overall providers should look for all those details mentioned above in order to improve customer satisfaction.

Hassnein Khaled. Head Milena. M-Commerce in Canada: An interaction framework for wireless privacy). M-commerce is cost- saving According to some studies m-commerce is cost beneficial especially in the finance-services sector. Deepak Pataki, head of the mobility research group at Infosys Technologies Limited in Fremont, Calif., says, 'Overall, the findings were that people are looking at mobile technologies more from an efficiency, rather than a mobile-services point of view. ' They want to 'implement mobile technology to improve productivity and give their employees access to vital company information.

' Moreover, the study found that 'cost savings, not increased revenues, is the primary expectation' of implementing M-Commerce in financial institutions, according to industry executives, who expect to save 15 percent on their e-business initiatives over the next three years thanks to wireless. 34 percent saw wireless as relevant to creating new revenues, although 49 percent said it was relevant to increasing existing revenues. Another research done by Kenneth Klemmer, an analyst at Forrester Research, profiled U.S. consumers interested in wireless commerce. The conclusion reached that people more biased towards m-commerce are consumers with college education and above, higher income and many years of experience surfing the Internet.

Therefore, they are more prone towards Internet banking, they buy and sell stocks online and overall they have higher invested assets. (Appendix A). Although this study should not be taken as a face value for all consumers, even not for the whole American population, but can give just a simple guidance, a mere profile of the m-commerce consumer. Moreover, broker firms and investors should not use that results as a guidance, as Mr Klemmer suggests that as firms with the bigger stake in technological development make the wireless appealing, nevertheless "It's not a huge thing to build. ' (Wireless studies reveal path to prosperity) Advantages of M-commerce Based on the analysis drawn above, I established that m-commerce has many advantages in today's market.

Presently, many companies are moving towards a one-to-one customer marketing relationship where a seller positions himself in order to reach a single buyer. Unlike PCs and televisions, mobile devices can be used in a manner that is truly individualized and singular. Since PCs and televisions are shared, marketing messages directed through these devices cannot be targeted towards a single individual. However, mobile devices usually have a single owner. Thus, they are ideal for accessing personal information as well as receiving targeted messages that hold a high value proposition for that particular consumer. As a seller, mobile technology can not only enable a one-to-one marketing strategy based on specific and individual demographic information but also permit a relationship to exist any time and anywhere.

The greatest benefit for the consumer will be the new experience created by M-Commerce. Consumers will be able to access desired products anytime and anywhere. Thus, M-Commerce can bring the buyer and seller together more easily and facilitate greater profits and a closer customer relationship. However, the greatest disadvantage of m-commerce is security. There are two issues in M-Commerce security which include the security of the actual transmission and the trust that the transaction is being made with the intended party. Encryption is meant to settle the matter of secure transmission.

However, many experts agree that they are far from secure. This need for more secure connections has driven companies such as Certi com and Entrust Technologies to develop new types of security software for the wireless industry. In addition, M-Commerce requires another level of security to protect transactions, authentication via the digital certificate. Although digital certificates are becoming common on the Internet, they have not yet been optimized for wireless transmission.

Currently, there are initiatives underway to create a simpler, wireless-friendly digital certificate. Hassnein Khaled. Head Milena. M-Commerce in Canada: An interaction framework for wireless privacy) The Market At A Glance The M-Commerce market players can theoretically be broken down into three types: network operators, suppliers, and content providers. Each of them has resources that can diversify into the field of M-Commerce. Network operators such as NTT DoCoMo in Japan already have an established customer base and control the networks.

For them, M-Commerce is a way to build stronger customer relationships and generate useful customer data. Suppliers include handset and network equipment manufacturers, application system developers as well as security specialists. These makers are suppliers as well as the players because they are all eager to provide necessary infrastructure elements for a stake in the M-Commerce game. The most obvious ones currently involved are phone makers such as Motorola, Nokia, Ericsson and NEC, who are making WAP enabled phones to support M-Commerce. Content providers are made up of established businesses looking to add wireless access to their options or startups looking to depend on Commerce to deliver innovation. For example, some dot. come such as Infospace are actively seeking ways to deliver their web content over wireless network.

The main substitute for M-Commerce is E-Commerce. Although it is similar to M-Commerce in that transactions are made through electronic means, this method has a disadvantage in that the customer must perform transactions in a stationary setting. Other substitutes include traditional commercial methods such as ordering by phone, videoconferencing, mail order catalogs, retail stores, bank branches, and travel agencies. Any existing or potential end user of the services provided by the M-Commerce market players is considered to be in the market for M-Commerce.

As of now, mainly consumers that use messaging capabilities on their handsets in Japan and customers of financial institutions in Europe generate much of the M-Commerce market. However, M-Commerce has the potential to eventually be part of every consumer's life, as businesses expand their IT capabilities to include M-Commerce. Hassnein Khaled. Head Milena. M-Commerce in Canada: An interaction framework for wireless privacy) The Early Players-Commerce has generally been applied more widely in Europe and Asia.

It spanned off in European financial markets, where banks based their wireless services on fixed Internet models in order to start building up their customer databases. It is common for the early players like BT Cellnet to set up a dual access approach, offering portals with both web and WAP access. The early applications of M-Commerce were in the area of European mobile banking. Some of the players included MeritaNordbanken and Barclays Bank and BT Cellnet. MeritaNordbanken is the largest Internet bank in Europe, and launched its Internet banking service in 1996. Presently, 50% of its customers use online banking.

The bank has also led the way into banking via mobile phone and has been offering WAP services since October 1999. Customers are able to pay bills, shop, access share prices, trade shares and view portfolios via their mobile handsets. The bank currently believes in the considerable potential of M-Commerce and is making ambitious plans to increase its number of Internet customers. Barclays Bank and Cellnet in the UK have made mobile banking available to its customers since 1997. The bank offered discounted mobile phones for their clients to access personal account details and met extreme success with this initiative. Those customers that use mobile banking have proved to be more loyal than other customers as well, with a churn rate of 7% compared to an average of 35% (Reuters Business Insight, p. 25).

Nowadays, it is coming also in the Greek market, as Co smote just launched it's advertising campaign about its I-mode services - through it consumers are able to pay their bills wherever they are, order products delivery such as flowers or play games and download rind tones and logos. Future Market Opportunities It is not yet clear where and how fast M-Commerce will penetrate into the global markets. Much of the promise of M-Commerce remains still at the prototype stage. However, the move towards M-Commerce is gathering pace.

The usage of mobile phones is currently mainstream and sales are soaring, outpacing existing and forecast PC sales. Right now, the number of global wireless subscribers have been growing, as shown in the forecast table below. Forecast: Global Internet Browsing Users, 1999-2005 Year (end of) 1999 2000 2001 2002 2003 2004 2005 Mobile Access 0.4 4.0 20.0 85.0 183.0 344.0 614.0 Fixed PC Access 241 373 496 571 624 671 740 All figures in millions of users Source: ARC Group, from Reuters Business Insight Vodafone expects that by 2003, 80% of its customers in developed countries will be using data services, which will account for 20% of its revenues, while Lucent say that by 2005 50% of traffic over wireless will be data, not voice. A forecast for wireless data users worldwide is shown in the figure below.

Forecast: Total Wireless Data Users Worldwide, 2000-2004 Year (end of) 2000 2001 2002 2003 2004 Total Wireless Data Users 25.4 48.7 88.3 153.7 236.6 All figures in millions of users Source: Allied Business Intelligence, Inc., from Reuters Business Insight-Commerce could prove to be a very promising opportunity to expand subscriber numbers, increase revenues, increase customer loyalty, and differentiate the market players from their competition. The mobile phone, for example, could become a great device for offering personalized services and gathering customer information. The customer relationship management (CRM) and personal information manager (PIM) systems could potentially know all about users, their preferences, and their movements in real time. Future Trends & Market Viability Major future trends in M-Commerce include: o The transition of commerce on PCs to commerce on mobile devices - leading to better web browsing functionality o The transition to 3rd generation cellular technology to deal with compatibility and infrastructure issues o Personalization of wireless devices based on location and context, leading to the need for security and changes in marketing o Connectivity of major electronic devices Consumers will be less tied down to their PCs when conducting commerce. With a mobile device consumers cannot only conduct commerce at anytime but will be able to do it at any location as well.

The implications of this will be a growing amount of wireless users, and this will lead to the need for graphic capabilities of viewing Internet pages to not only include data in the form of text but also in the form of voice, video, and images. (Gillick, 1). As the number of wireless users is increasing, compatibility and infrastructure limitation issues have become apparent. There have been no standards established for the mobile commerce industry and the existing infrastructure will not be able to handle the exploding growth in communications traffic and connection issues.

Companies are currently using second generation (2 G) and generation 2.5 (2.5 G) networks which do not implement standards and only allow for data rates of up to 400 Kbps (Gillick, 14-15). Global wireless traffic as a percent of telecommunications traffic has increased from 5.2% to 17.7% since 1997, thus making the 2 G speeds inadequate. However, the emergence of third generation (3 G) cellular technology in a few years will solve these problems. It will provide a single standard for the M-Commerce industry to allow much higher connectivity and will provide a much higher data rate, 2 Mbps, to handle the explosive increase in traffic. Wireless devices will become increasingly more personalized to their users by obtaining information about the user and keeping track of the user's preferences. This will offer more customer service and value and will allow businesses to take advantage of a 'one-to-one' marketing opportunity.

However, with increased personalization security will begin to play a more crucial role (Hayward, 34). Security restrictions and standards will have to be put in place in terms of both security of the actual transmission and the trust that the transaction is being made with the intended party. Encryption techniques are already being implemented and soon the use of digital certificates, which is currently common on the Internet, will begin to be used in the wireless environment (Coursaris, Constantinos. Hassnein Khaled. Head Milena. M-Commerce in Canada: An interaction framework for wireless privacy.) Eventually, the use of wireless technology will extend to include other devices and mediums.

With just a mobile device, a person will be able to access television, his or her computer, telephone, and radio to name a few. Everything will be encompassed into one huge virtual network. The market has not accepted wireless technology with the ease and speed that was predicted several years ago. Debate exists over whether M-Commerce is dying out or if it will be the next revolution in business.

We believe that M-Commerce is still in the prototype stage and that there are usability, compatibility and security issues that have prevented it from penetrating the market. As these issues are resolved wireless technology will grow exponentially in the number of users and applications. As more people use it, the more necessary it will become for other people to use it and it will grow to the point where consumers and companies are dependent on it. Mobile commerce is making it possible the new era of customer care.

'Ten to 15% of our eCRM solutions are going ahead with the wireless extension,' said Shannon Denton, Xcelerate COO. 'We expect that to increase by the end of the year to 50%. ' More and more vendors are equipping with m-commerce variations. Xcelerate, for example, has an application specially designed to help emerging companies establish competitive architectures for the wireless Web. The company recently helped virtual start-up Kosherfmder. com - a site devoted to helping consumers of kosher foods find products and services - revamp its site. Xclereate added WAP-accessibility and an end-to-end solution to Kosher finder. com's site.

Now the company is able to capture mobile users and better serve them, all of which gives it the opportunity to increase its revenue. (E-commerce care). In conclusion, if customer perceptions change and get used to the idea of m-commerce characteristics, benefits will flow concerning the customers as well as many businesses around the world. As globalization goes with a faster pace hand in hand with technology, it is possible nowadays to connect the end-users and suppliers coming from opposite parts of the globe.

If the issue of security is overcome, thus not revealing the position of the customer at the transaction period, I think more and more consumers are going to accept the idea of the wireless wallet and buy for example the tickets for the concert right at the spot, instead of searching for it (as emphasized in the commercial of I-mode, launched recently in the Greek market). After all, every innovation takes time to be understood and accepted, but not until the majority of the market consumers experience the benefits of it. We tend to forget the time when some twenty years ago, people had to be explained why laser printers were better. To make m-commerce work, managers have to explain harder what the value for consumers really is. Appendix Appendix 1: Source: Clark, Christopher. E-Commerce Care.

Wireless Week. Jun 15, 2000.

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