wireless Web is truly' the next major wave of Internet computing
A its potential for bringing people together and expanding commerce is even greater than that of the wired Internet."
Edward Kozel, board member and former CTO of Cisco systems (AlterEgo, 2000, p. 12)
The integration of the Internet into our modern culture as a driving force behind business, convenience, services and merchandise acquisition has created a new set of desires for modern consumers. The trend started with the ease and availability of services and products being offer4ed through radio and television advertising, and then infomercials and shopping channels. The internet brought the availability to purchase products, goods, and information from our desks and kitchens. Now trough wireless hotspots and wireless devices, society is following their desires toward a marketing distribution channel which motivates them to pay for internet access, and mobile commerce (m-commerce) anytime, anywhere, and instantly. These sets of desires, which growing numbers of consumers are willing to pay for, is creating a market-based demand for increased availability to wireless networks.
According to Nadel, (2002) by 2005 more than 500 million m-commerce users worldwide will be generating revenues of over 130 billion [pounds sterling] for those using the m-commerce value chain,. Those organizations sharing in this evolving revenue stream include the network operator, and technology supplier, to the content provider and online merchants.
If even the most conservative forecasts are to be believed, communications professionals involved in developing end user technology applications should take the business imperative of m-commerce seriously. Mobile technology enables a unique customer communications channel which is based solely on the desires of that customer. Nowhere is the impetus stronger for this level of individualized control over marketing than at the point of delivery, in the palm of the consumer's hands, and among the mobile network operators for whom m-commerce means direct access to the consumer. In addition, when combined with the power of proactive, predictive customer relations management, (CRM) presents a real opportunity to counter the ongoing effects of customer churn and focus on boosting average revenue per user for all wireless systems. (Nadel, 2002)
Currently, there are 4 factors which affect the development of an effective, reliable global m-commerce industry. Lagging behind the development curve are individual facets of the M-commerce industry which are all needed in order to form the glue which will hold this evolving value chain together. In order to make this shift to m-commerce possible on a global scale, the factors which need to work together are technology, culture, availability, and security.
Technology Development curve
Technology which is currently available is not sufficient to handle the expected demands of broad-based m-commerce. The wireless networks currently offer little in the way of personalized and easy to use content. Using a wireless device with scaled down features to browse a standard internet website is cumbersome, and not likely to satisfy the customer. If m-commerce means anything, it means simplicity and instant availability. Devices which do not supply this kind of instant interactivity will not be favored by consumers who have become used to finding instant access to goods and services through a desk top, or laptop PC. The service providers need to address, and offer a similar experience, convent, reliable, and instantaneous if they are to engage the desires of the growing wireless m-commerce community.
Culturally, consumers' experience in e-commerce is setting the standard for how shoppers will perceive m-commerce. When the Internet came of age in the late 1990's businesses were convinced that personal interaction could be replaced by flashy internet access to goods and services. However, the bricks and clicks model proved superior to a strictly internet-based business model. Customers want to have access to individual attention when in need of customer service, verification of purchase, etc. An m-commerce model must also meet these desires for the customer if he is to be satisfied with the experience.
Availability is a significant issue. Current wireless devices make up a minority of internet broad band traffic. According to Neil Montrefiore, executive of Singapore mobile operator M1 "Within five years, individual e-commerce services will be primarily delivered by wireless and the wireless terminal will become the window of choice to the transactional e-world," (Hoffman, 2000, p.20). If this is true, then wireless networks will have to be able to handle the bandwidth without coverage brownouts if they are to attract and build the confidence of new customers. In the new decade, the call for information technology will be information, any time, any place and on any device.
Finally, security will be the backbone of the new system. Many internet customers are just becoming confident enough to enter their financial information online and make internet purchases. The future of m-commerce will depend on developing a reliable and hack resistant wireless security system. This aspect of the wireless m-commerce revolution will be the most difficult for the companies to negotiate. Currently internet-based e-commerce solution providers operate independently, and can take a number of hours to place, verify, and record transactions. The entire system is based on wireline transmissions, and is connected by computers which have the power of land-based connections, desktop hardware etc. The wireless community, and m-commerce which will be taking place in the wireless community, want to be able to transact the same kind of business transactions from devices which fit in a shirt pocket. The communication protocols, interconnectivity, and bank transactions will need to be real time and secure in order to enable the m-commerce systems.
E-commerce is poised to witness an unprecedented explosion of mobility, creating virtually a new domain of mobile commerce. The ability to purchase goods anywhere through a wireless Internet-enabled device will slowly transform our social culture in the same way fax machines and cell phones did in the last decade. Mobile commerce, which refers to any transaction with monetary value that is conducted via a mobile network, will allow users to purchase products over the Internet without the use of a PC. This proliferation of wireless capability has created an emerging opportunity for e-commerce to expand beyond the traditional limitations of the fixed-line personal computer, and evolve into a completely mobile commerce delivery system.
The magnitude of the m-commerce Internet revolution will pressure current e-commerce business models, create opportunities for new mobile Internet companies, engender a stream of change among established e-commerce paradigms, and lead to a reconfiguration of value propositions in many industries (Evans & Wurster, 1997). M-commerce is still not without its limitations. According to Clarke (2001) the problems it must overcome include:
uniform standards: in order for devices to communicate with diverse networks, a set of uniform standards must be devised for the industry.
A ease of operation: devices need to have simple operating systems, which may become unique to the industry, rather than scaled down versions of traditional desktop applications.
A security for transactions: Digital authorization at the point of purchase, authorization at the delivery end of the purchase, and encrypted communications are each an important piece of the m-commerce system.
A minimum screen size: mobile devices must be able to deliver detailed content with ease.
A billing services: merchants will have to be able to verify bank records in real time in order to verify purchases.
Due to current technological limitations, limited service availability, and varying mobile consumer behavior patterns, business strategies developed for m-commerce applications will need to emphasize characteristics which are unique from traditional e-commerce strategies (Barnett, Hodges & Wilshire, 2000). Rather than building on the e-commerce identity, and simply adapting it to mobile devices, m-commerce will need to have its own identity, with unique offerings. The old marketing strategy of offering different and better solutions is a part of the motivators to adapt consumer behaviors. If a system is only different, consumers have no reason to change. If the system claims to be better, again, consumers have no reason to take the risk of leaving what is familiar and reliable to verify the claims of better. However, a system which is different and better has the capacity to deliver new customers.
Successful m-commerce providers will need to understand that consumers are unwilling to spend long periods "surfing' on these inherently less user-friendly wireless devices (Albright, 2000) in order to facilitate their m-commerce transactions. Wireless users will demand packets of personalized information, not scaled-down versions of generic information. Therefore, technology-focused wireless Internet business models will likely be replaced by models which best integrate the unique characteristics of wireless m-commerce - such as personal customization, instant access, and reliable transactions. As such, the long-term success of e-commerce may be partially dependent upon the successful development of consumer-oriented m-commerce business strategies. "Mobile commerce is per se not included in the traditional e-commerce market models. M-commerce will be able to increase the overall market for e-commerce, because of its unique value proposition of providing easily personalized, local goods and services anytime and anywhere" (Durlacher, 2000, p. 12).
This level of constant connectedness will be empowered by the security of wireless…