Ecommerce and Its Evolution Into Mobility

Ten years ago ecommerce was still a cool buzzword that everyone wanted to try, but at that early point it was largely limited to the Business-2-Business world. The use of personal computers, mobile phones and the internet was still experiencing its first period of growth, so the average person sitting in front of their behemoth CRT monitor hadn’t grasped the potential of the web quite yet.

It didn’t take long though. Soon dot.com companies selling anything from sock puppets to toothbrushes at unbelievably low prices were popping up all over the place. Beady eyed investors saw the potential in dot-coms: little overhead and massive profit. The credit industry chimed in with low interest rates and blanket application acceptances, knowing there was money to be made. Unfortunately and predictably, the house of cards fell. Dot-coms were collapsing by the dozens and investors saw billions of dollars seemingly evaporate into thin air within a very short period.

Since that dark period in the early history of ecommerce, there have been countless research studies conducted in an effort to answer the desperate whys and how’s being screamed from bankruptcy courts around the nation. By now we have all heard the answer explained in long winded speeches about boom and bust cycles etc. In the end the collapse of the dot.com bubble was the inevitable outcome of greed on a massive scale, more specifically, unchecked greed with few security protocols and no governing body.

The birth of the 1990’s brought a wider availability of personal computers and the internet, but the 21st century brought mobility to the internet. According to CTIA the Wireless Association, there were just over 109 million mobile phone users in the US in 2000, that’s 38% of the population. Of course at that point the smartphone was clunky and fairly unusable so few people owned one. Eight years later the number of mobile phone users more than doubled to 262 million, 85% of the population. Now the Neilson Company predicts by the end of 2011 at least 49% of Americans will have a smartphone and 51% will still be using their feature phone (out of the 96% of the population that uses a mobile device).

Between 2000 and 2011 there has been an about-face on the part of ecommerce. Security platforms have become more stable and widely used so trust has now been built. User interfaces evolved into dynamic places where visitors felt both stimulated to buy, yet secure in handing over credit information. Mary Meeker of Morgan Stanley has amalgamated data from Japan that shows online commerce and paid services accounted for a whopping 32% of mobile revenue in 2008. We all know technology progresses faster than the Roadrunner, and we are equally aware that Japan and China are usually the first to set trends in technology. That begs the question, has the west fully realized the potential of ecommerce yet? Or are we still remembering the chaos of the 90’s?

The same report by Mary Meeker, dubbed the Queen of the Internet by Baron’s magazine in 1998, shows North American and European nations use of ecommerce on a mobile platform accounts for less than 14% of mobile revenue (2008). Are we still scared? No, we are being gouged. North Americans have some of the highest mobile phone bills in the world. Canada in particular generates an average of $55 revenue per user per month; the US isn’t much better sitting at $48. India is the most fortunate; making the phone companies about $5 per user per month.

Mobile ecommerce is the future; there is no doubt about it. For the average North American the ability to buy almost anything with a smartphone is far too convenient to give up simply because our data plan sucks. We may not spend as much as the Japanese, but we sure know the value of ecommerce. Then again, as humans we are cursed with the innate habit of reacting to the here and now. The bill is out of sight, and therefore out of mind. We are also experts at rationalization. The value of using an internet fax service to send a document to a client via your smartphone far outweighs the value of physically delivering it. The flexibility and potential of the smartphone and ecommerce has placed a much higher value on time. What we choose to do with that time saved is the subject of a whole other article.