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Thursday, April 10, 2008

Is m-commerce about to kill the retail industry?

Interesting post here, about the possibility for shoppers to arbitrage pricing while in-store, by texting a numerical product code to Amazon and seeing if they can get a discount.

Funnily enough, I actually registered a bunch of URLs in 2001 such as mobilecomparisons.com , in the expectation that this type of technology would emerge. I got bored waiting in about 2005, and let them lapse.

I can see some big advantages in this particular case - notably that it's Amazon, with whom many people already have an account via the PC (I can't imagine wanting to set up a new account on the phone), and who are also the masters of the logistical side. It's also good that it bypasses the operator (who would otherwise want to add their own margin to the price, probably negating the benefit). And it's certainly good that it charges to your credit card rather than your mobile bill.

On the other hand, even without any knowledge of the retail industry, I can think of numerous ways that this can be circumvented from the retailer's point of view:
  • Work out an explicit value for "instant gratification" and make sure the Amazon discount doesn't cover it
  • Negotiate with your suppliers for slightly customised versions of products that aren't available through other channels, and which therefore have a unique UPC code or barcode that Amazon doesn't have access to
  • Put a sticker over the UPC code with a proprietary product tag only recognisable by the checkout system
  • Offer different "Get it now!" and "Free delivery tomorrow" prices for goods.
  • Offering complex product bundles described on shelves & assessed at checkout ("Price of camera + memory card = $200", or even just "Buy one get one free")
I also think that some of the notions about always-on ubiquitous mobile broadband are over-optimistic, even though the US is now a bit of a special case because of 700MHz' reach.

Verizon's C-Block is 2 x 11MHz - and I'll leave it to a more techy-minded reader to work out the likely "Mb/s per square mile" based on density of cell sites, sectors/cell, frequency use & a bunch of other technical innovations like beamforming. But I'm pretty sure it's going to struggle to get to (let's say) an aggregate 1GB/s per square mile, which will then have to service all simultaneous users. Femtocells could help, but probably not in a retail environment.

Sure, mobile web user experience will get a lot better with improved devices/browsers, and 3G/4G/WiMAX/white-space/band-sharing technologies. And I can see evolutions of this technology with barcode (or even just product) photos being interpreted.

But I can't see m-commerce killing retail, even though it may shake it up a bit, in the same fashion that PC-based Amazon already has.


raddedas said...

I remember reading about companies doing this ages back - what I don't totally follow is, were you planning to domain squat with your registered URLs? Even a shorter domain probably wouldn't have helped - I've always been led to believe that there is more to building an e-commerce or m-commerce service than just registering a domain, which might explain why your wait turned out fruitless :)

wirelessman said...

1 GB/s/mi^2 is pretty optimistic. With all their fancy antenna processing, LTE and mobile WiMAX will get somewhere between 2 and 4 bps/hz/cell (assuming 3 sector cells). So that 11+11 Mhz C-block allocation will give Verizon about 60 Mbps/cell (combined UL and DL). So the question is, how big are the cells?

Let's assume that in urban and suburban settings, Verizon is using the wonderful propagation characteristics of 700 MHz to get good indoor coverage and low battery life (as opposed to big cells) so they have 1 mile radius cells. That gives you about 20 Mbs/square mile. You were only off by a factor of 50 :)

Anonymous said...

Why don't you just Froogle an item when you are in the store using your mobile web browser? Some operators in the US (Verizon, Helio) also provide some default product results for search items already. Helio already has Amazon directly built in as an results tab in its multi-homed search feature on Ocean and Mysto.

TedB said...

mCommerce works when it solves a problem
and user understand the need.

The capacity to have portable computing power
has incredible potential. I am confident
that it will only improve our quality of life and ability to collaborate.

We are running a search tool called
mobile.barcle.com or www.barcle.com
which allow the shopper to input
the barcode so they are sure they are looking for the right information for the product currently in front of them.

We have a live database of over
20 million unique products covering over 50 000 brands with prcing from over 1200 partners.

The idea is converge instore experience of touch , see and feel with low online prices in order to save the user money. It is also a
GREEN technology as it means less travelling around and less usage of wasteful desktop computers.

The challenge in the North American market is the use of 1D instead of 2D codes, requires most
to input manually the barcodes, however for both the generation of instant messengers and Silver Surfers willing to type in 10 to 14number to quite often save both time and money, we have developped a core group of first adopters.

Ted Baltuch