It seems that most people have a mobile phone or PDA these days, and all advertisers have a message they want to sell to consumers. It's the perfect scenario to allow mobile commerce (m-commerce) to truly take off. But what are m-commerce players doing to overcome the poor usability, trust, security and fulfilment issues that have so far made most online shopping mechanisms a chore, and what's in store for mobile consumers in the future?

Table of Contents

Overview: The mobile age So what do you get when you send e-commerce out on the road, accessible by a mobile phone? M-commerce, of course.

The market & what to sell
Flying in the face of many recent dotcom plans, it is suggested that a good business model is necessary for a successful m-commerce offering. Remember - the mobile can't be a supermarket; you have to target very specific audiences to make the process as simple as possible.

Who wants it
Two key markets for mobile commerce will probably emerge that will require very different strategies: those who have a computer at home or work and just want m-commerce for those things they need straight away, and those who don't have their own PC at the moment but still want to access email and other Internet services through a relatively cheap device.

SMS, LBS, SMS: An acronym-off
M-commerce doesn't just happen by magic - there's all sorts of tricky technology to help make it happen. While e-commerce largely relies on customers using computers, it is much harder to cater for those on mobile devices due to the need for wireless connections. ZDNet takes a quick look at all the acronyms (WAP, SMS, LBS) and a couple of other useful services.

Usability
The trouble with m-commerce is that mobile phones have such a poor interface for anything other than entering phone numbers. PDAs aren't much better with relatively low resolution and the same connection rates making the process slow. Here's some basic tips for budding m-commerce developers.

Power to the People
With such an untried market, customers will only choose to use sites which earn their trust and give them a feeling of security. With so many interface issues, how can you convey these feelings to the customer? One way to find out is to ask your customers.

What can you buy NOW?
Most m-commerce strategies have not yet hit the mainstream in Australia and the players who are providing the technology and infrastructure aren't household names, yet. Who are the players in the market right now and what do they have to offer.

Mmmmoving into the future
It's important to learn the lessons from e-commerce, especially that simple designs are often the best. Even though m-commerce is still young, now is the time to learn from other's mistakes.

The Mobile Age

Mobile phones are pretty useful things, and these days almost everyone has one. Palm handhelds and other digital devices are also increasing in number, even outside the business world.

Mobile devices are becoming constant companions for many people and, because of this, they are also turning into multi-purpose devices. Phones these days come with calculators, diaries, phonebooks, reminder alarms, text messaging, and access to the Internet (how many of these additional functions are used is a whole other story). However, the limitations of mobile devices also make them hard to use for some tasks and certainly impractical for others. Some also become a lot larger in size--Nokia's Communicator 9110i, for instance, isn't exactly small.

And then there is the world of internet shopping, although the current impact of e-commerce is yet to be fully determined, it will change the way many people go about buying goods and accessing services.

So what do you get when you send e-commerce out on the road, accessible by a mobile phone? M-commerce, of course.

Mobile commerce is a category that incorporates any kind of digital payment system wirelessly, so this means that m-commerce also includes laptops and any other devices that are portable and can be connected to the 'Net to transact.

The promises are great, pay for your train fare quickly and automatically as you walk through the turnstile - no queues, or order the latest CD on the way home on the bus - you don't even have to go into the shop. However, there's a limit to how much can be done with m-commerce and at this stage it's probably more to do with the usability and technology of such devices than anything else. I wouldn't buy clothes online because I couldn't see them or try them on, but I would order a CD online or be told where the closest location is that stocks that CD.

Even for the wired world, transacting online has many pros and cons and, from our experience, is rarely done well. Issues like poor usability, trust, security and fulfilment make most online shopping a chore. These are often made harder for mobile devices and the limitations associated with them.

We decided to look at three aspects of the approaching m-commerce revolution; the market, the technology and the usability. We also look at some examples of how the technology is being demonstrated and used by those at the cutting edge.

Back to M-commerce Special: Coming soon to a mobile near you

The market & what to sell

Flying in the face of many recent dot-com's plans, we suggest that a good business model is necessary for a successful m-commerce offering. There is no point in trying to sell fridges via mobile, as people are likely to want to see them and measure them. Also, you need to take into account why the customer would need to do it on the way to work. They'd probably spend a significant time contemplating such a purchase and they wouldn't make such a decision on the run.

It also comes back to the 80/20 rule: 80 percent of your customers are likely to only buy 20 percent of your products, or at least want to buy them online via mobile. Remember--the mobile can't be a supermarket, and you have to target very specific audiences to make the process as simple as possible. People won't (or shouldn't) expect to be able to buy your whole range of products. Mobile commerce is about buying products or conducting transactions that are regular, simple and relevant.

However, m-commerce isn't all about buying CDs online, it can also act as a flexible payment system that allows customers to buy products using their phone as an account. For example, I might want to buy a product in a store, and could have it charged to my phone account rather than my credit card. However, think about the consequences. Only those with a credit history would be able to gain access.

Those ineligible would include a large portion of the market who are more likely than most to use the technology--kids. A limited debit card-like service could solve the issue and operate for those not eligible, allowing them to make online purchases. If they lose the phone, payments can't be made without the PIN so it's much less likely that they'll lose the money compared to losing their wallet. Merchant acceptance of such payment methods will also be key in the actual take up of such technologies.

As well as making every transaction digital, with full records to rely on and much easier processing sales and inventory, there is also the opportunity to improve the customer's end of the transaction. For example, you might be able to eliminate most queues by making the train turnstiles accept payment from a mobile device without the customer even needing to take it out of their pocket.

Back to M-commerce Special: Coming soon to a mobile near you

Who wants it?

There are probably going to become two key markets for mobile commerce that'll require very different strategies. The first are those who have a computer at home or work and just want m-commerce for those things they need straight away. The second are those who don't have their own PC at the moment but still want to access email and other Internet services through a relatively cheap device.

I want it now
These people have a computer at work and/or home and will use the device mainly for when they are on the move. They are likely to need to check email when on the road and maybe also stocks or buy something in a hurry.

Remember that people making purchases though m-commerce solutions are using a mobile device, probably as the last resort. Here are some reasons people want to buy via m-commerce:

• Speed--These people want to purchase something and they want it now. They can't possibly wait to get home and log on. These people are after time critical information and services like shares and bank transactions that need to be carried out no matter what.

• Entertainment--these services may be things like micropayment games that customers can play against each other. Something like a round of good old PONG might be fun for kids on the way home from school on the train or bus. And it's got to be cheaper than video arcade game prices these days.

• Convenience--these are people who want to be able to do whatever they want. They could pay their rent when they got home via phone banking or the Net, but if it's just as easy to do it now via the mobile so they don't run the risk of forgetting (and being evicted). The important thing with convenience is that you have to make it as easy or easier than other methods to make it an option that people will use.

The key to the potential market seems to be 'do what you do and do it well', don't aim to be everything to everyone. The acronym KISS (Keep It Simple Stupid) is fundamental. And keeping it simple largely relies on identifying what your customers' wants and needs are, and usability testing to make sure it works the way they want it to.

Back to M-commerce Special: Coming soon to a mobile near you

SMS, LBS, SMS: An acronym-off

Of course m-commerce doesn't just happen by magic--there's all sorts of tricky technology to help make it happen. While e-commerce largely relies on customers using computers, it is much harder to cater for those on mobile devices due to the need for wireless connections. Different technologies have different requirements and how does it actually travel through the air? We take a quick look at all the acronyms (WAP, SMS, LBS) and a couple of other useful services.

1. WAP isn't all crap
WAP is probably the most fully featured of the technologies to support m-commerce at this stage. It also has a security system (WTLS) that protects your deepest darkest secrets and your bank balance as it travels through thin air. The flexibility and enhanced navigation and interaction surpass that of SMS due to it's larger area interface and more advanced browsers. However, it also has its problems. The catchcry of "WAP is Crap" is probably overused and is largely due to the poor interface of many of the information that is available but it has put a lot of people off the technology. Also, because WAP devices aren't always online, customers are required to connect to the Net to initiate any form of transaction. This dial up takes time and together with the whole process of the expensive time based call charges there is pressure on the customer to do what they want as quickly as possible.

2. SMS 4 U
This is a great little technology that many people are familiar with for messaging their friends. It doesn't require customers to dial up to send information - in fact most people have SMS on their current phones. SMS is probably best suited to supporting m-commerce functions. For example, a customer may see a product or group of products and they could request information on the product by using a simple phone number to receive further details. They could SMS back to you a description of the product and the individual's details to confirm receiving information by post or other method, or even the prices of items on special.

This could be combined with Location Based Services (covered below) to identify where the closest store is and how much. Alternatively, customers could identify a product using the same system as above and then have the phone notify the customer when they are within a certain distance of a store which stocks that item. This reduces the customer's need to remember to get what they need, or to stop to get something like the milk. This is a simple service with a lot of potential for supporting m-commerce functions.

3. Bluetooth?
Bluetooth is a wireless technology that works like a little network over small distances and is set to have a significant impact on the m-commerce industry. Payments can be authorised locally on a person-to-person or business-to-person basis, rather than through the greater network. This is especially suitable for cash register style payments and e-wallet scenarios than the purchase-while-moving scenario.

4. Let's talk about money
Voice is another way to interact and we're not talking about a telephone call but talking to a computer capable of speech recognition over the Internet, and it talking back.

There are two issues with voice. Firstly, the technology has to be very advanced in order for the store to 'talk' sensibly with the consumer and, secondly, you can't see other options or what else is available. I would hate to have to sit there and listen to a list of all the products available. Given that people quickly forget information it's much harder when you can't see it. So if you are interacting by voice you have to have all the information repeated if you miss it.

Voice also opens up to issues with surrounding noise and the privacy of the data you are dealing with. Would you want to read out your credit card details and expiry date on a train full of people?

5. Where are you?
One of the biggest potential technologies for mobile commerce is Location Based Services. These base marketing material, reminders for purchase and navigation instructions on the customer's location. For example, Location Based Services have a lot of potential for the use of the mobile as a marketing tool or shopping assistant. Potentially you could request a product or service. For example, a CD store could identify the closest store available, and a certain product's availability.

Back to M-commerce Special: Coming soon to a mobile near you

Usability

The trouble with m-commerce is that mobile phones have such a poor interface for anything other than entering phone numbers. PDAs aren't much better with relatively low resolution and the same connection rates making the process slow.

Some basic tips for budding m-commerce developers are:

• Entering information must be kept to a minimum if you want customers to persist with the exercise.

• M-commerce applications should have specific purposes. If your company offers a variety of services you might like to provide an index but also allow customers to bookmark the specific part of the site they might want direct access to.

• Limit the number of products and services available to make selection easier and keep the navigation system to a minimum. Three menu selections at most should be used to locate the product. Then the actual purchasing process should also be minimal. The last things you want is for them to give up through the process because it is just too hard.

• Also, consider the total cost of using the technology. Customers are unlikely to pay for the convenience of the WAP service if the benefit is not clear. For example if it costs the dial up cost, call charges, item cost as well as the cost of delivery.

Because of the display size it is also hard to show a shopping basket on the screen, and the result is that most sales processes make it hard to purchase more than one particular product at a time. Unfortunately, the customer has to repeat the process to buy a second product decreasing the chance they will do so. However, the linear process significantly reduces the complexity of the task. This can encourage customers to revisit the store and reduces the apprehension to complete the process a second time for repeat purchases.

Back to M-commerce Special: Coming soon to a mobile near you

Power to the people

Trust
Trust is a key issue with e-commerce solutions and there are several criteria which people use to identify whether a Web site is trustworthy or not, like contact details, secure transactions and whether it's a well known brand name. The issue of trust is even more important when using m-commerce. There is much less room for including privacy statements and other information to put customers at ease. Many people use the professional look and feel of the site as an indicator of trust but this rarely comes across through a mobile device interface. The preference to only interact with companies you trust via brand name is likely to limit the merchants you purchase from.

Security
So what happens if you lose your phone? Does your whole life have to start again because of the loss of the phone PIN? In a perfect world there would also be software so that you could back up your phone to the computer meaning the loss of the phone would not mean having to type all those names in again. People may also perceive that because it is a wireless device that the data transfer is also less secure.

It's all about the people
The only way to find answers to many of the questions about the usability of m-commerce is, strangely enough, to put it in the hands of customers. Even informal customer testing is better than none. Often developers and marketers get a little too attached to their solution and can't see the flaws it may contain. Working on a project day-in and day-out means that you'll start to compensate for the problems. Unfortunately, real customers won't be so forgiving.

M-commerce is currently aimed at a very small population of consumers and this allows vendors to target products very specifically. However, as m-commerce becomes more mainstream, it's important the processes are designed to suit a more generalised audience.

Back to M-commerce Special: Coming soon to a mobile near you

What can you buy NOW?

Most m-commerce strategies have not yet hit the mainstream in Australia and the players who are providing the technology and infrastructure aren't household names, yet. It appears that the technology is not the one to blame in this case and that it is more recognition by the market.

Companies like the Soprano, based in North Sydney, provide end-to-end solutions for clients who want their commerce to start with an "m". It takes a different approach by connecting to its clients' backend and allowing customers to interface directly with the information itself rather than storing the data and then passing it on, which could turn into a game of Chinese whispers. Its solutions are used by the big guns like Telstra for its SMS information services and Cable and Wireless Optus for its Networker service.

Soprano can output information to a variety of devices, potentially all at the same time, so you could get your bank balance update via SMS, WAP or on you laptop. This technology independence allows it to cater to emerging technologies and take advantage of the benefits while simultaneously providing for older technologies.

Redcoal, also based in Sydney, has recently done the HMV site through the Optus portal, and is focusing on fast moving consumer goods, such as fast food chains, as well as gaming. Expect to see voice recognition and full payment gateways for merchants to make use of. It will be shortly making good use of GPRS by including features for WAPpush and location-based services.

The CSIRO are currently demonstrating a product which will dispense a can of drink if you SMS the number associated with the drink of choice. You don't need to dig around for the last 5 cents, that might get stuck in the mechanical device, instead it's a transaction dealt with by a computer and it appears on your next phone bill or e-wallet account. The process is quite simple, but it has yet to take off.

In the UK, however, Ericsson and Virgin Cola have teamed up to allow you to get food and drink from a vending machine via WAP, no change needed.

Back to M-commerce Special: Coming soon to a mobile near you

Mmmmoving into the future

We've said it before and we'll say it again, the key to m-commerce is targeting the service to specific customers who would be interested. Customising the m-commerce functions that they view on their mobile device can be done via the Web. At the end of the day, it is about usability and maintaining simplicity. Of course with the development of the technology some issues will be improved, like speed and display resolution, while some may get worse.

The user interface has an influence over how much the customer can see at one time and how they interact with the device through menu structures and links.

On one hand it is likely there will be a steady increase in the purchasing of PC's for personal use. On the other hand, mobile computing is getting better and handheld devices are a lot cheaper than buying a PC and much more personal.

Also expect to see a growth in the PDA device form factor over the phone. As phones start to take on other functions there will be a shift toward the phone becoming a secondary function with screen size and resolution becoming more important. After all a screen can be a keyboard, but a keyboard can't be a screen. Take a look at the Handspring Visor and its GSM phone adapter, available in the US, for a great solution that can address many people's wireless device needs.

It's important to learn the lessons from e-commerce, especially that simple designs are often the best. Even though m-commerce is still young, now is the time to learn from others' mistakes. Don't rush to market just because you have to, ensure you have a useful, quality service and gain that critical market share.

Back to M-commerce Special: Coming soon to a mobile near you

About PTG

The Performance Technologies Group improves the experience people have when using technology. Its focus is on creating usability, technically robust and business effective technology through independent usability, technical and business consulting solutions.

Through a team of psychologists, technologists, and business specialists, PTG addresses the key problems associated with the development of technology such as: cost effectiveness; customer satisfaction; quality, performance, and reliability; value creation for customers; business performance; accessibility for people with a disability; and usability.

For further information, please call The Performance Technologies Group on (02) 9458 6450, fax (02) 9929 5960, email info@performancetechnologies.com, or visit the Web site at www.performancetechnologies.com

Back to M-commerce Special: Coming soon to a mobile near you

Copyright © 2009 CBS Interactive, a CBS Company. All Rights Reserved.
ZDNET is a registered service mark of CBS Interactive. ZDNET Logo is a service mark of CBS Interactive.