Mobile Commerce spending is set to exceed over £72 Billion in 2011, also known as m-commerce, it is a subset of E-commerce where shopping is done via mobile phone. If your business isn’t considering m-commerce currently, consider the facts:

• M-commerce is reaching critical mass, with spending to reach $119 billion USD in the next four years, according to analysts at ABI Research.

• Japan is currently the largest market for m-commerce, but US markets have grown from $396 billion USD in 2008 to $1.2 billion USD in 2009, and European markets are expected to outpace the US by the end of 2010.

• The UK leads the world in smartphone adoption (the technology that powers m-commerce), with the adoption rate jumping an astounding 70% to more than 11 million subscribers just from January 2009 to January 2010, according to a recent comScore study.

• With only 2.1% of the UK’s population using m-commerce currently, the potential for growth is enormous.

Adoption is happening at a rapid rate in the UK, and the latest research from the Internet Advertising Bureau shows that 51% of mobile owners have used their device to make a payment, redeem a coupon, or research products and services. This bodes well for rapid growth in m-commerce.

While mobile owners seem to be adopting the technology at a rapid rate, the same can’t be said for businesses in facilitating the consumer experience. Data from digital marketing company eConsultancy.com reveals the following:

• 55% of small businesses have not checked the appearance of their own website on mobile browsers.

• 41% reported that their website didn’t look as good on a mobile browser, and 36% said that functionality was diminished.

• Only 7% of businesses had optimised their sites for mobile browsers.

There are many reasons for the rapid adoption and growth of m-commerce, and most have to do with our relationships with our mobile devices, which almost never leave our side, even in bed.

Mobile phones in general, and smartphones in particular, have a place in our pockets, purses and bags, wherever we go. Consumers have never before been so attached to a device that allows us to reach them wherever they go. While we leave behind our television, computer, newspapers and magazines, our phone almost never leaves our side.With the portability of phones and technologies like geolocation and high-speed mobile internet, our phones are uniquely positioned to be our primary data device. Mobile commerce is just a natural extension, and now the ability and convenience to shop anywhere has arrived. In addition to convenience being an oft cited reason for using m-commerce, other interesting observations by the IAB of m-commerce behaviour include:

• Average m-commerce spend is high, with an average transaction of £12.20.

• Mobile customers are spontaneous, with 31% reporting that their purpose was spontaneous or impulsive.

• 35% of mobile users that reported having not yet used m-commerce were simply unable because of limitations with their equipment. This number will decrease rapidly, as technology improves by the day.

The IAB’s Alex Kozloff goes on to appeal to businesses:"Whilst m-commerce is on the radar for many retailers, our research highlights the need for more urgency in terms of developing a mobile presence and ensuring the user experience is as smooth and secure as possible. Almost half of mobile users are making purchases, and of those who don’t, half again are certain they will in the future, so investment in a solid mobile retail presence is essential."

This echoes the findings by other industry experts that businesses are not moving fast enough to meet the demands of mobile consumers. This leaves huge opportunities to businesses willing to invest in their mobile presence.

Planning Your Mobile Strategy

In planning your mobile strategy, you’ll want to consider:

•How will you deliver your mobile experience? Will you create a mobile-optimised version of your website, or offer an application for customers through application marketplaces for smartphones?

• Will you offer the full functionality of your website, or focus on the critical elements for mobile commerce?

Here are some considerations based on the feedback from current mobile users:

• UK users prefer to access the mobile internet using a browser rather than an application (70% for mobile versus 55% for application), according to a study by Orange.

• Speed is more important than full-featured functionality. Faster m-commerce sites have better response rates when compared to more full-featured, but slower, sites. Users want a rich experience, but not at the sacrifice of speed.

Hot Trends in Mobile Commerce

• Check-in deals – Geolocation technology allows mobile applications to pinpoint your geographic location. Applications like Foursquare, Gowalla, Loopt, and Facebook Places let you "check in" to wherever you are. Businesses are using this to offer specials for customers who check in at their location.

• Comparison shopping – A popular use for mobile commerce has grown out of scanner applications. These applications use the camera in a phone to scan barcodes on products, then search the internet to find the best prices for the product scanned.

• Social couponing – Sites like the extremely popular Groupon utilize group buying at a local level to get big discounts for customers and volumes of business for shops. Groupon has grown at tremendous levels, and has been an acquisition target for companies like Yahoo! and Google, who offered over $5 billion USD for the company. Their plans going forward are to expand beyond the limited one-deal-per-day market to offering businesses opportunities to have profiles on the site where they can offer their own deals whenever they like.

• Mobile ticketing – Sites like MovieTickets.com allow moviegoers to purchase tickets to movies through their mobile. According to Mobile Commerce Daily, as high as 10% of blockbuster movie ticket sales can come through mobile ticketing applications.

• Banking – According to data from comScore, the use of mobile banking applications has more than doubled in the last year.

• Retail purchasing – Sales of tangible goods account for about 6% of mobile transactions, and intangible goods (particularly applications and ringtones) account for another 17%, according to survey data.

• Text message marketing – Text message marketing allows businesses to directly engage with customers and offer deals or promote special events utilizing the text messaging features of mobile phones.

Technology will continue to improve, adoption rates will soar, and large profits will hang in the balance for businesses that embrace m-commerce. What will your business do?