mobile commerce

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Travel Tech

Mobile commerce continues to grow as Tnooz and Emarketer report. Mobile commerce or mCommerce constitutes $41.68 billion of the total $262.3 billion of eCommerce sales for 2013. This is an increase of 68.2% from 2012 and accounts for 16% of total eCommerce sales. Although this constitutes significant growth, it should be taken into account that eCommerce only accounts for 10% of the overall retail value. Nevertheless, the future for mobile is looking bright: eCommerce is growing five times faster than traditional retail channels and mobile commerce is growing three times as fast as eCommerce as a whole.

MOBILE COMMERCE IN TRAVEL

At first sight, the rise of mobile commerce can be found in the travel sector as well. For instance PhoCusWright predicts mobile travel bookings in the US market to triple over the next two years. Thus by 2015, mCommerce in US travel will have reached 25% of the total online travel market. While these figures certainly underpin the importance of mobile commerce for travel and tourism, the reality is somewhat more complex.

Mobile commerce is still afflicted with a relatively high degree of risk and uncertainty by global consumers. For instance, according to SITA’s Passenger IT Trends Survey 2013 only 5% indicate they were using check-in and booking services on their phones, and 78% cited usability concerns and the limitations of the device as the major concerns for not using mobile for travel.

CONSUMER ATTITUDES POSES MAJOR CHALLENGE

The growth of mobile commerce in travel is therefore highly dependent on an overall change in consumer attitude and behaviour. Fortunately, the signs are pointing in the right direction.

Firstly, consumer increasingly adopt multi-device strategies. Thus, mobile devices become more often part of the purchase decision making process, even thought the transaction might be carried out on a different device.

Secondly, consumers get more comfortable using their mobile phones for payment in everyday activities. The Startbucks for iPhone app is a prime example of how mobile payment slowly becomes part of everyday consumer culture.

Thirdly, travel companies become smarter at what type of products they offer via mobile channels. The recent success of Hoteltonight and reports from Orbitz and Expedia noting that seven-in-ten of same-day bookings are through smartphones, indicate that certain travel segments are particularly suitable for mobile commerce.

Thus, we can see that mobile commerce is on the rise, and there is no doubt that it will change travel distribution in the long run. However, until than the travel industry will have to address some major hurdles, among which consumers’ attitude towards mobile commerce is one of the most pressing concerns.

 

 

 

 

 

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