Today, mobile devices have become an item that nearly everyone owns, and very few people leave their home without their phone in hand. As the capabilities of mobile devices have increased over the years, so has our dependence on these devices. Many people have become so dependent on mobile devices that they keep their cell phones on them at all times. A poll done by TIME Magazine in 2012 showed that 84% of people surveyed around the world said they couldn’t go a single day without their phones. (Duerson, 2012) Constant access to cellphones and other mobile devices have caused users to grow accustomed to being able to retrieve information or perform transactions any time they want, no matter where they are. Having this capability has caused more and more users to utilize mobile devices for functions that they would have previously completed on a computer. The increased utilization of mobile devices for online activities has caused companies to begin focusing more on mobile commerce and developing ways to benefit from it. Companies quickly found that mobile commerce did not fit into their typical online business models and in order to properly utilize this new type of commerce they would have to develop new business strategies that differed from the traditional e-commerce strategies. (Clarke III)
Apps as a Business Model
Just as using data through mobile connectivity is becoming more popular, more technologically advanced, and more powerful, business apps are following the same trend. Entrepreneurs and businesses of all sizes are becoming more reliant on apps as tools to help grow their businesses and customer base. The business world today is mobile, and there is no question about if a business should invest in developing a mobile app; applications are a company’s “own proactive mobile presence.” (AB Mobile Apps, 2012) A majority of people use the internet to communicate, search for answers, or research any number of topics. Most successful companies could not operate without a website and attempting to do so is nothing short of risky. With the aforementioned mobile connectivity advancement and availability, not having an application to further a business would not be taking advantage of available resources. Businesses need mobile applications to stay competitive and to ensure they are remaining relevant to their respective market. (AB Mobile Apps, 2012)
According to AB Mobile Apps, statistics show that the first 3 or 4 websites listed by a search engine receives 85 percent of internet business, which means that the thousands of other sites listed are generally unnecessary and unseen surplus websites. Mobile apps are no different. If a business is slow in developing their app and providing customers with a mobile experience, customers have no qualms is going elsewhere. (AB Mobile Apps, 2012)
Mobile devices and consumer changes
According to a report completed by Forrester Research, retail sales completed on mobile devices are expected to see a steady increase in the next few years. While mobile retail revenues are only a fraction of total e-commerce, sales are expected to be $31 million by 2017. (Ingram, 2013)
(Ingram, 2013)
Convenience is enticing consumers to use their mobile phones or tablets to shop for products and services. Mobile apps can leave users logged in and save the buyer’s credit card information, which makes shopping even easier. Shoppers not only avoid having to drive to stores to make purchases, but they also no longer need to boot up their computers. Shoppers now have the option to buy whatever they want from nearly anywhere with just a few simple clicks. (Demo, 2013)
According to a 2013 survey conducted by Adobe, 49% of mobile phone users and 45% of tablet users were interested in using apps, as opposed to a browser, to make mobile purchases. The same survey showed that 42% of smartphone shoppers and 38% of tablet shoppers claimed that mobile apps strengthened their connection with a particular brand. The following statistics indicate that mobile apps are changing the way that consumers make purchases and view companies. Mobile apps help improve both the customer experience and the company’s ROI. (Ingram, 2013)
(Ingram, 2013) (“Mobile Shopping”, n.d.)
What is M-commerce?
With most cellular companies’ adoption of 3G and 4G networks, the popularity of mobile-orientated sites has progressed extremely quickly. Other technological advances in cell phones, such as higher resolution screens and faster processors, give consumers a small computer at their fingertips and the ability to shop whenever and wherever they wish. Companies which provide m-commerce capabilities give their customers the ability to research, compare, and purchase items while they are not at a stationary home or office computer. This mobility allows commuters to become a new target customer. (Bull, 2014)
Mobile commerce, or m-commerce, allows individuals to conduct transactions online using wireless handheld devices. (“Mobile Commerce”, n.d.) These transactions include the buying of goods and services, selling of goods and services, bill payment, online banking, and information services such as news. (“Mobile Commerce”, n.d.) (Rouse, n.d.)
M-commerce’s Effects on Traditional Forms of Business
Traditional business models for e-commerce could not be directly duplicated for m-commerce due to the different ways that the computer user consumes online data in comparison to mobile data users. For e-commerce, the focus has been on providing the customer with an aesthetically pleasing virtual storefront with different kinds of helpful features integrated into the website while still maintaining a high level of security for customer information. This technology-focused business model needed adjustments in order to become more of a customer-oriented model that aligned with the capabilities of mobile devices and how consumers utilized these devices. (Clarke III) The value of m-commerce comes from providing consumers with a convenient way to access goods and services anytime and anywhere; a benefit which allows consumers to use m-commerce applications to complete shopping tasks while they are in line at the store or even stuck in traffic. (Relander, 2015) The accessibility of m-commerce also allows individuals to respond quickly to time-sensitive business information such as stock market changes, betting, and auctions. Mobile business models needed to be able to maximize this value-for-time attribute and account for the varying behavior patterns of mobile consumers. The new customer-oriented strategies that are being implemented by e-businesses are centered around the value propositions created by the ubiquity, convenience, localization, and personalization of mobile devices. (Clarke III)
With the shift in strategy, e-businesses are required to focus more on developing simplified web pages that integrate seamlessly with any mobile device and create easier ways for consumers to quickly access information. (Felicitta & Jayanthi, 2009) The simplification of the commerce site is more than convenient; it is a necessity since users are not willing to spend long periods of time waiting for full sized web pages to load on their mobile devices. Additionally, smaller web pages are necessary since mobile data is bought by the gigabyte, and extra data is charged at a premium by the megabyte. Consumers want an application that allows them to take care of their online shopping in the time they have between their everyday activities. Busy consumers want to locate and purchase what they need with a few quick taps of their finger. Customers would rather have a reliable application that they can quickly navigate instead of an unstable application which tries to integrate the additional features typically found in standard websites. Being able to quickly provide consumers with the right information whenever and wherever they need it is essential for a company to have success with m-commerce. (Clarke III)
Apps vs. Traditional Websites
The value-for-time benefits which have made m-commerce so popular have also led to the growing popularity of m-commerce apps for mobile devices. While apps are normally used to complete the same tasks that would typically be done through a standard website, they include a few additional features that can sometimes further improve the customer experience. One reason consumers may use an app over a standard website is for the increased speed of navigation that apps provide. Apps usually consist of a condensed version of the information and features available on websites. By eliminating the excess information and only including the essentials, apps allow the user to locate the information much faster. Take, for example, the Apple Store app, this interface presents the consumer with only the tools and information they need for purchasing Apple products and allows them to find and purchase the items they need without having to navigate through the additional content presented on Apple’s website. Another benefit of apps is the improved compatibility and functionality of the content with that specific mobile device. (Berry, 2014)
Compatibility allows the consumer to integrate information contained on their device such as their pictures or GPS location. (Berry, 2014) App stores typically verify mobile apps before they make them available for download; therefore, mobile apps are likely to be safer from malware compared to traditional online shopping. (Demo, 2013) Added security is a big reason consumers often utilize apps for online purchases, especially when buying more expensive items. Although these benefits can make apps the better choice at times, they also have shortcomings such as interface issues only containing a portion of the website information that can sometimes make the traditional website a better choice for consumers. These are things that users must consider when choosing between an app and a website. The choice is dependent on the specific task that the user is trying to complete and commonly comes down to the personal preferences of the consumer.
For a business to remain relevant in its industry, they must move forward step-in-step with advances in technology. Easing customer access, saving their time, and increasing the company’s visibility are all sound reasons for a company to invest in developing an app based business model, but the reality of the situation is without an app, modern businesses are at a disadvantage. Apps are a necessity in modern business, and the following video list ten valid reasons businesses need to keep pace. (Openxcell Technolabs, 2013)
(Openxcell Technolabs, 2013)
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