Improvements in handsets and increasing take-up of mobile data services are persuading many retailers to enter the mobile space, according to industry experts.

But analysts have suggested that there are still significant barriers on the consumer side that may impact on any potential growth in the channel.

At the Retail Business Show in London last month, one of the most popular tracks was dedicated to mobile retailing. One of the biggest draws was Mark Cody, channel business manager for interactive sales at O2, who explained how retailers should exploit mobile commerce.

Cody argued that the ongoing explosion in SMS text messaging meant “there has never been a better time to engage with customers via their mobile”. Specifically, text messages can be used by firms as a springboard to other services. For example, retailers could text customers a link to a particular part of their web site offering a promotion or sales item.

Automated texts containing customer information could also help to create efficiencies and reduce administrative costs in call-centres. If there are a certain number of calls put into the call centre requesting the same sort of information, you could text [your customers] that information,” Cody said.

Keeping customers informed about details such as the progress of orders via text can also improve the user experience and foster loyalty, according to Cody.
Texts also offer retailers the ability to send mobile vouchers and coupons to customers, which can then be redeemed in store. “We believe this [technology] will grow in the next 12 to 18 months,” Cody said.

Looking further ahead, he predicted that as Near Field Communications (NFC) become more mature and widespread in devices, retailers will look to this technology to offer customers a more user-friendly route for services like contactless payments.

The take-up of mobile services by the operators has rocketed in recent months, according to Matt Bancroft of mobile device management firm Mformation. The firm deals with around 80 per cent of the world's tier-one mobile operators, providing software to remotely monitor devices and deliver new applications.

According to Bancroft, more transparent data services pricing from the operators, increasingly intuitive and user-friendly devices such as the iPhone and more sophisticated customers will drive a surge in m-commerce.

"The need for what we do has been there all along, but in the last two to three years there has been a rapid rise in demand," he explained. "We've signed twenty new operators in the last 12 months and that's roughly 100 million mobile devices globally – they're thinking 'what new opportunities have opened up now and what creative things can I do that couldn't before?'."

The mobile internet is another burgeoning area that offers retailers great benefits, said Cody. With operators now offering flat-rate tariffs, advanced handset designs that deliver an increasingly rich user experience, and 3G and Wi-Fi connectivity on the increase, take-up of the mobile web is soaring, and brands cannot afford to view roaming surfers as an optional extra when defining their online strategy, he argued.

But although the mobile internet offers an exciting new channel to market, retailers should not make the mistake of trying to recreate their fixed web site, argued Gartner analyst Hung LeHong.

“What you want to highlight to the customer on the mobile is different to the [fixed site]; it’s smaller, last-minute purchases like event tickets or flowers,” he explained.
According to a new Gartner report entitled M-Commerce Retail Consumer Shopping Preferences, consumers are more likely to check for the price of items and find stores while on the move, than actually buy goods.

The major barriers that are still holding back mobile commerce include a feeling that the phone is too complicated to use for shopping, privacy fears, and concerns about services charges, the research found.

O2’s Cody explained that many big-name brands are still shunning the channel, often because the agencies they use do not have confidence in, or knowledge of, the technology required. “We’re trying to help them understand that they don’t need to spend a fortune on special hardware,” he said.