The mobile commerce revolution will be messy

It's a Wild West of competing apps and services for both payments and shopping tools

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I know retailers like to think show-rooming is only about "unfair" pricing from and Wal-Mart, but in my experience a lot of it is driven by the frustration of going to a retailer, not finding what you want, and being stuck with no option other than to go online.

Will customer abuse go mobile?
At the M-Commerce World conference, most of the presentations were by vendors pitching their established worldviews and naked self-interests. It left me convinced that effective m-commerce will come slowly, as companies stay stuck in their ruts and miss the bigger picture to adapt to.

I've been covering mobile tech for two decades, and 12 years ago I was executive editor of a magazine called M-Business that was all about mobile's business opportunities such as m-commerce. Sadly, much of the conversation hasn't changed in those 12 years: Telcos want a piece of the payments market but are afraid of the liability; plus, their users hate them. Everybody and his brother wants retailers to install some unproven proprietary payments terminal and ask their customers to walk away from the easy, familiar, and trusted credit or debit card.

Worst of all, there's a continued strong belief that smartphones are perfect for targeting ads at people as they walk and drive through town. Several vendors, for example, sell retailers systems that monitor phone IDs in malls to track where people go. They don't know who that person is, but they know where that cellphone has been, to build up a profile of likely interests that can then be used to advertise to those people with alerts and the like. If you remember when sales calls were common at dinner time, you know the loathing that such technology will create if deployed the rest of the day on the devices we always have with us.

"The industry is trying to shove down consumers' throats notions from the 1970s like coupons and promotions, whether you like it or not, because 0.1 percent of you might respond," said Patrick Gauthier, head of emerging services at PayPal, during a panel at M-Commerce World. That "0.1 percent" comment is key -- that's about the response rate that postal junkmail needs to be cost-effective. Without the printing and delivery of paper, the profitable response rate for mobile spam will be even lower, meaning it'll be of very high appeal to retailers, banks, and others.

Interest in such ad-spamming possibilities has been greatly heightened this year by all the excitement marketers have over big data analysis and their goal to create rich customer profiles they can then use to manipulate the buying public. It's a commercial Big Brother in the making.

Gauthier is all for big data analysis, but not for use for advertising, coupons, and other spammy pitches. He says the key is to use big data analytics to improve the experience, personalize it, and gain deep knowledge of customers to make better decisions as to what to sell, when to stock, how to support, what questions and issues can be smoothed away, and so on. If the experience is better, the customer will be more loyal -- without bothering everyone else.

There's a lot to be worked out in m-commerce, and we'll see good ideas and bad ideas alike both succeed and fail.

This article, "The mobile commerce revolution will be messy," was originally published at Read more of Galen Gruman's Smart User blog. For the latest business technology news, follow on Twitter.

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