Upwardly mobile

Now that most businesses finally have a strategy in place to deal with e-commerce, along comes the next business challenge: m-commerce.

While many deride mobile commerce as simply another fad term for executives to throw around, or at best, see it as a repackaging of today's existing e-commerce model, m-commerce does present new challenges and new opportunities -- even if they aren't for everybody right away.

For starters, business leaders need to understand exactly what mobile means.

"When we talk about the mobile Internet, it's not the same as having wireless access to the Internet," says Haijo Pietersma, L.M. Ericsson Telephone Co. executive vice-president, Internet applications and solutions division.

"It is a completely new business domain. Compare it to movie theatres vs. TV. It will become very personal. It will drive new value chains and partnerships. Ultimately it will drive new consumer behaviour."

As Pietersma sees it, mobile devices are "personal devices -- you call to a person, not to a place," and the sense of personal access will cause users to demand even more control of how the device is used, and how businesses market mobile services.

In the financial services area, for example, Christopher Erickson, president of Toronto-based 724 Solutions Inc., says banks catering to mobile users will have to work to keep customers happy. To do that, they will have to find out what is important to customers, and deliver that content to them, whether it is alerts from brokers, or information videos.

"It's all about keeping the high-value customers and attracting new ones," Erickson says. Customers using 724-based banking solutions "want to look at all their financial relationships all in one place. That means taking that data and making it mobile. It's not about re-rendering the screen, but taking that raw data and making it mobile."

And it's not about flooding them with every piece of marketing ever devised. It means giving the customer complete control over what is being delivered.

"Customers have to say, 'I care about these things. I will accept alerts but they have to be actionable,'" Erickson says.

Alan Young, vice-president and executive director of technology at e-Citi (part of Citigroup Inc.), agrees completely that customers will want content delivered to them to be meaningful.

"The mobile phone is a transactional device, not a browsing device. The screen is too small. It's amazing the value you can add with the simplest services: notifications if balances drop below set limits, or if fraud alerts occur on your credit cards, or on-demand transactions such as a balance of accounts, a transaction journal, bill payments, or stock trading.

According to Jonathan Craig, vice-president, global planning and business development for the Schwab Wireless division of Charles Schwab and Co. Inc., no matter what content is delivered to a mobile device, it must have a few common characteristics.

"Wireless services will be differentiated [from other e-commerce services] by their ease of use and navigation, the depth of the content and the real-time quotations and alerts, and the integration with the other channels," Craig explains.

And he also warns that the infrastructure must be even more accommodating of the foibles of the wireless network than current Internet technology.

"You have to take into account that there are coverage gaps, so you must have order-confirmation processes and order-status alerts on the devices," he says.

Even if businesses are able to figure out the technical challenges of delivering data to a multitude of agnostic devices including PDAs and mobile phones, the business challenges of coming up with the appropriate m-commerce application still exist.

"If you're selling to business or consumers, there is a limited amount of content that people are willing to pay for," says Philip Yen, executive vice-president of the e-Visa division of San Francisco-based Visa International. "If you follow the Internet model, books, travel and software sell, but what you want to buy through a mobile phone is a lot more limited."

Yen suggests businesses get their start in the m-commerce world by dipping in a toe and not plunging right in.

"Companies that offer mail-order or order-taking services will be among the first wave to benefit from extension into the mobile world. In travel, for example, you can notify customers of last-minute deals. To start with, the customers might not complete the transaction through the mobile phone, but you can supply the number of the call centre and with one push of a button, they can contact the call centre, and you can allow them to interact with the operator.

"You have to bring the customer to you for the early applications of mobile commerce. And for now, stay away from doing the complete transaction over the mobile phone," he says, especially if your business is complex.

As an example, Yen cites an example of a pizza company in Japan that accepts orders over mobile phones. In order for a typical transaction to be completed, he says the ordering process requires the user to make between 10 and 20 selections on the tiny screen of their phones.

Financial institutions, he says, have simpler products. "The end points in a bank are limited," he says. "What can you get from a bank? Your balance or you can make a transfer. You don't need to shop and see what colour an item is or figure out what flavour you want."

Yen does predict, however, that within two or three years' time phone screens will be big enough for more complex transactions, and the technology will better support a person who wants to conduct business over a mobile device. And in order to be ready for that, he does suggest businesses spend time working on their m-commerce strategies.

"If a merchant is focused on making a profit, m-commerce will be an investment for the near future. I don't think there will be a sufficient number of transactions right now to drive the volume up to sufficient levels. We need to take lessons from the e-tail world."

Carolyn Gruske is a Toronto freelance writer who specializes in IT reporting.

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