The Growth of mCommerce (and Why FinTech is Watching)

For most people, there is one device they can’t live without. We spend most of our days within arms reach of it. It’s likely the first thing we reach for when we wake up and the last thing we look at before we go to bed.

Any guesses?

Your phone.

Raise your hand if you’ve done any of the above (don’t be embarrassed, if I weren’t typing my hand would be raised too).

The mobile phone has become indispensable and the time we spend on it is only growing.

When you look at the 2016 ComScore US Mobile App Report, the data backs this up. And it’s the Millennials who are driving mobile usage among all smartphone users.

Here are just a few takeaways:

  • “Mobile now represents almost 2 out of 3 digital media minutes, and mobile apps are approaching 60% of total digital time spent.”
  • “smartphone apps alone now account for nearly half of all digital media time and 3 out of every 4 minutes on mobile in total.”
  • “Mobile app continues to outpace mobile web by a 7:1 margin in time spent.”

When you take a look at those numbers, it’s easy to understand why mobile commerce (mCommerce) is making waves.

What is mCommerce?

From Investopedia:

Mobile commerce also referred as m-commerce, is the use of wireless handheld devices such as cellular phones and laptops to conduct commercial transactions online.

Mcommerce lets you shop and complete transactions from your phone. You can do this anywhere; you don’t need to be home and on your desktop.

The Advantages and Challenges of mCommerce

Mcommerce, when done right, can provide a big advantage in a number of spaces. Unfortunately, even though more people are using their smartphones for shopping, many are still missing out on the potential.

Looking at you, retail.

The reason why retail still struggles with mCommerce is because of the shopping cart experience. Shipping costs are the most commonly cited reason why a user will abandon a shopping cart. The other reasons are directly related to mCommerce.

From a Baymard Institute study:

cart abandonment rate ecommerceThe other major complaints all have to do with the checkout process. When people find something more difficult to complete, they aren’t going to do it.

So if it’s already hard to finish in the eCommerce world of desktop computers, why would it be easier to do on mobile? The answer is, it isn’t.

That’s where mCommerce is looking to make big gains. And it is already, according to BI Intelligence estimatesmcommerce share

That red trendline is pretty hard to ignore if real data follows these projections.

This massive growth is what is driving a lot of the benefits brands are seeing with mCommerce.

The most obvious is it allows people to shop and make purchases from anywhere. They haven’t tied down to their house or a desktop device.

Additionally, app users are more loyal. While the market is smaller overall, those brands who have customers that do use their apps, purchases goods significantly more often. ComScore found that for the top 1,000 online properties, app users spent 20 times more time on the app than the mobile website.

That loyalty will certainly pay off in the long run.

FinTech Eyes mCommerce

In the FinTech world, people are keeping an eye on mCommerce. Part of it will depend on how retailers and shopping sites react. The brands that have worked on creating a smooth shopping process are seeing the rewards.

Look at this image from HubSpot:mcommerce growthThis highlights the brands that have gone all in on mCommerce. Apple and Ticketmaster have almost 60% of shoppers visiting them only on mobile devices.

As smartphone penetration continues to push forward, the growth of mCommerce will likely rise. And, as Millennials become the focus of brands, from banks to retail shops, mobile is going to develop.

We see it already.

FinTech in areas like Person2Person payments and Blockchain are already on the move. The biggest financial institutions out there are making investments, wealth management, and personal finance apps too.

While mCommerce hasn’t ‘blown up’ just yet, the time is far likely sooner than later. Brands will need to find ways to adapt to the growing market of people who turn to their smartphone first (or in some cases, the only place they turn).

Those who don’t are going to continue to see diminishing returns as the younger generations don’t appear ready to give up smartphones anytime soon.

Keep an eye out, and watch this space.