The Next Great Opportunities in Mobile Commerce

When I started Coin Labs, I set out to create a space for strategic analysis around the flow of money that could provide value and insights in a mobile-native world. Over the course of this journey, the majority of my writing has focused on understanding the Why of the mobile commerce landscape. Only through understanding the Why could I create frameworks for How mobile commerce will develop over the next 2 years, 5 years, 10 years. But knowing the How is only useful if it leads to insights on where the next great mobile commerce opportunities are and how to exploit them. What good is a map if a leads you nowhere?

The Problem with Mobile Commerce Today

Mobile commerce as it exists today has a “utility” problem. By utility, I mean “how does a commerce activity fit into the spheres of influence that affect my life daily?” These spheres consists of interests, experiences, media and community. Originally, online commerce sought to bring mundane commerce activities online such as paying bills, buying clothing and electronics, and booking travel accommodations from established companies. Online commerce achieved this goal exceptionally well given the tools of the time (e.g. desktop PC and modem connection).

Tools of the time is the key phrase in that last sentence, because the preferred tools have changed over time (swap the smartphone for the PC and 4G/Wifi for the modem) and the majority of online commerce still looks the same. It’s not that consumers’ commerce appetite has been stagnant, but that for the most part, the tech industry has not provided the utility necessary to unlock the latent commerce behaviors that exist now because of the internet, the smartphone and mobile connectivity.

The current frustration in the mobile commerce community is the difficulty of discovery for mobile apps and purchase conversion on mobile websites. Mobile websites grab only a 34% share of online sales, even though they drive 53% of online traffic. These are serious issues for mobile commerce, but they are also issues with clear solutions like Apple Pay/Android Pay on mobile websites and better discovery tools for mobile apps like Button.

Unlocking mobile commerce’s next great opportunities are less obvious than solving discovery and conversion workflows. The next great mobile commerce opportunities will create new markets, not just expand old ones. These nascent opportunities will unlock big, valuable and addressable consumer behaviors around interests, experiences, media and community.

Moving from Novelty to Utility

Mobile commerce’s next phase will be about giving consumers the ability to engage in commerce influenced by their interests, their community, favorite experiences and the media they consume. For consumers, these are the most important influencers in purchasing decisions, starting at the top of the funnel all the way to the bottom. Think about the last purchase you made. It was more than likely influenced by one or more of these influencers. Harnessing these influencers will allow mobile commerce to move beyond the novelty of paying with a smartphone to becoming a true utility.

Interest-Driven Commerce

• Key Factors: Intent to purchase is inherent in the consumer journey. Commerce is always contextual. Best-in-class solutions will handle the entire customer funnel?—?from aspiration to fulfillment.
• Unique Value Proposition: The product provides a singular destination to learn about products geared toward their interest, with the option to complete the purchase at the moment of intent.

Examples: Taobao, Pinterest and Kickerstarter Live

Experience-Driven Commerce

• Key Factors: Freedom from ownership of goods. Convenience. Ability to accommodate a wide variety of experiences.
• Unique Value Proposition: The product provides exceptional experiences, free from the trappings of ownership and the cognitive load of that it entails (e.g. maintentance and setup).
• Examples: Airbnb and Joymode

Socially-Driven Commerce

• Key Factors: Leverages the inherently social nature of the smartphone to drive community action. Opportunities for gamification that deepens user engagement and affinity.
• Unique Value Proposition: The product gives users the ability to leverage their community to drive collective action that leads to commerce interactions.
• Examples: Tilt

Media-Driven Commerce

• Key Factors: Combination of compelling editorial content and commerce. Higher conversion rates than standalone content or commerce sites would achieve. Editorial content is focused on a targeted demographic with high discretion income and/or unique commerce needs.
• Unique Value Proposition: The product provides valuable and insightful editorial content geared towards a user’s specific interests or needs with the option to purchase products or services highlighted in the content.
• Examples: Goop and theSkimm

Mobile Commerce’s Second Act

Due to the distinct characteristics of mobile commerce’s second phase, I believe that startups, not incumbents (save for Apple and Snap Inc.), will be best positioned to got after these opportunities. While a company like Facebook knows your social identity better than any other platform, it has yet to prove that it can leverage that strength in mobile commerce. Google is making strides in visual commerce on mobile, but traditional online commerce is in its DNA. It’s better suited to solve current issues (discovery and conversion); not the new market opportunities on the horizon.

Apple and its spiritual successor, Snap Inc., understand culture and how to leverage it better than any other major consumer tech incumbent. At the end of the day that’s what at the core of mobile commerce’s next phase—understanding the cultural spheres of influence that drive consumer behavior. Innovating in this new reality will require an empathy, awareness and cultural understanding that few of today’s tech companies possess.

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