Mobile commerce (m-commerce) is changing the way people shop. Millions of people purchase and download apps for their phones, and companies are anticipating an ever-increasing revenue stream from m-commerce. For example, by 2016, PayPal expects to see up to $10 million in mobile payments per day, and Forrester Research predicts m-commerce revenue reaching $31 billion by 2016. The potential wielded by four billion mobile phones worldwide is continuously referenced in marketing meetings across the world.
At Apple’s Worldwide Developer Conference 2012, Apple reported that their app store had more than 400 million user accounts (with credit card numbers attached), including 650,000 apps available for download and a total of over 30 trillion apps downloaded by consumers to date. These numbers point to an urgent need for user experience practitioners and designers to understand and enhance the m-commerce user experience. While past research has clearly stated that m-commerce is not simply an extension of electronic commerce, we simply can’t ignore that e-commerce is the closest indicator of what we might expect from this new area. Traditionally, we have seen trust cited as a major obstacle in e-commerce activity. In 2000, the Better Business Bureau publicly stated the necessity of “promoting trust and confidence on the Internet,” and claimed that a lack of trust was a major reason why users did not buy online. This is usually the case for new technology, as familiarity is a well-documented precondition for trust.
Many researchers have developed models of trust to explore how trust can be achieved for commerce. Notable is Lynne Zuker’s model of trust, which outlines three ways in which companies can gain trust with consumers: by showing similarities (for example, in lifestyle and goals) between the company, its products, and the consumers (character-based trust); by creating a history of trustful transactions with consumers (process-based trust); and by presenting a public presence that is respected and shows integrity (institutional-based trust). These trust mechanisms have been applied to e-commerce in the past, and our team builds on them as we work with m-commerce.
Studying Mobile Shoppers
To help explore this new form of commerce and what role trust plays within the mobile commerce space, we conducted a diary and interview study with m-commerce shoppers. Participants kept diaries about their mobile shopping activities, including details about what they shopped for, what they ended up purchasing, and what activities led them to their shopping and buying. An overwhelming number of participants reported shopping for “deals,” as well as clothing, hotels, general accessories, shoes, cellphone accessories, toys, and pet products.
We also looked closely at trust to understand if consumers had issues with trust and how these were being mitigated. The ways in which consumers developed trust in companies often took on a form specific to m-commerce when compared to e-commerce or traditional retail shopping. Overall, we found that people have few trust concerns when it comes to m-commerce because of brand recognition, social recommendations from friends, and minimal perceived risk in many of the purchases made from a mobile device.
The largest factor for m-commerce in developing strong trust with consumers was “brand recognition.” Participants regularly stressed their trust in the brands they were buying. In all shopping instances, people reported having a past experience with the vendor. In addition to trust in store and product brands themselves, participants mentally transferred their trust from large companies (for example, Apple) which approved m-commerce applications to the applications themselves. That is, app marketplaces like Google Play (formerly Android App Market), Amazon’s Marketplace, or Apple’s iTunes were highly successful in transferring trust from their well-known company label to the product being purchased. For example, if people were using an app on their mobile device for shopping, regardless of which company made the individual app, because the app had been approved through a large trusted company, the trust the participant had in the large company transferred to the app itself and it was deemed trustworthy.
Some participant quotes:
- “Everything is prescreened in the [Apple] app store, so there is no worry about [trust].”
- “It just feels like a more cohesive thing when it is under that one umbrella company of Apple…[not using the app store] just feels like you are opening up your phone to all the Internet and random companies.”
Trust in m-commerce largely hinges on the respected, public presence of large companies and their associated marketplaces. In e-commerce, such institution-based trust is commonly done through third-party guarantors, membership in associations with professional codes of conduct, and so on. Historically, this type of trust did not include distribution models such as app marketplaces. Yet app marketplaces have essentially played the role of third-party guarantors in m-commerce. The often stringent approval process that Apple mobile apps must go through before they are even placed in the hands of consumers acts as a guarantor of service or products acquired through it.
The implication for vendor companies is that the more a product can be tied to a larger company and its marketplace, the more likely people will trust the product and purchase it. Consumers should certainly be cautious, though, because app marketplaces may not, in fact, provide the best screening of trustworthiness related to shopping.
We also found that our m-commerce participants had few trust concerns because many of their shopping or purchasing activities were based on recommendations from close friends or family members. Similar to the transfer of trust with known brands and app marketplaces, users would also assume vendors and products recommended by their family or friends were trustworthy, whether they actually were or not. In most cases, social recommendations came from close family members, but sometimes they came from strangers if there appeared to be a consensus among them.
For example, one participant talked about getting a recommendation from a friend about a particular pizza delivery place. Even though they had never used the website before, they made the purchase based on the recommendation and thought little about trust. Other participants described eBay seller ratings. They would indicate that with high positive feedback, trust was simply not an issue for them. However, if the feedback was neutral or negative, they would not purchase from the seller.
Stepping back, we can see that social recommendations relate to character-based trust. This is the idea that trust can be developed by showing similarities between a company and its consumer. In a mobile context, social similarities were most prominent between people and not companies. That is, the act of having friends or family suggest a product, or, to a lesser extent, social networks, meant that people felt comfortable with the product because they recognized their friends or family had similar values to theirs. The implication is that m-commerce companies are more likely to be successful if they are able to tie their products to social sites that allow people to easily recommend shopping items to others and act on these recommendations.
Lack of Risk
Finally, our study revealed that participants felt there was little actual risk within their mobile commerce experience, regardless of true risk. Other traditional e-commerce trust concerns such as loss of personal information, tracking one’s purchases, and poor service quality, were rare among users. In e-commerce, providing an email address, shipping information, and a credit card number most often happens at the time of purchase. However, this is not often the case for m-commerce.
Our users instead made most of their purchases through app marketplaces, which meant that purchase information went through the larger trusted brand provided by the marketplace and not necessarily at the actual time of purchase. This type of “automatic” payment eliminated perceptions of vulnerability. The implication, again, is that trust can be improved with companies if they are willing to tie their payment mechanisms into larger trusted brands that have marketplaces with information stored prior to purchase.
Mistrust concerns did arise but were very rare, occurring in only 7 percent of the reported shopping instances. Reasons for mistrust included negative social recommendations, poor brand experience, and usability issues with a company’s app or site.
Overall, participants had few concerns, which we attribute to several factors that map at a high level to trust mechanisms established for both retail and e-commerce. In each case, though, m-commerce provided unique nuances in terms of how trust mechanisms were applied and thought about by users. Since purchases were made on mobile devices, unlike personal computers, they tended to be from companies which already had strong relations with users from previous mobile transactions, purchases done in other mediums, or because of strong referral by friends or referrals in a social space.
Compared to e-commerce, m-commerce seems to be more an extension of previous brand experience and less an introduction to a brand. Our findings suggest that the more m-commerce applications tie to existing friend networks or established and known brands, the more likely people will trust them.
Perhaps the most fascinating difference between e-commerce and m-commerce activities and notions of trust was the heavy use of application stores and apps designed by specific companies. The regular use of these applications is non-existent within the e-commerce space. Of course, we are now beginning to see companies migrate many strategies from m-commerce to the e-commerce domain in which computer-based shopping and purchasing can be performed in app marketplaces just as they are on mobile devices. For example, the Apple App Store can now be used on a Mac computer for buying software programs and games. We believe this blending of e-commerce and m-commerce foreshadows continued emergence in the future.
It is clear that mobile commerce is in its infancy. Decades of future research and development are needed to fully understand the role trust will have in mobile commerce, and how this new form of commerce will affect current forms. Starting this conversation is something each nation must not delay on, or more agile countries and industries will reap the benefits of early adoption and a place among the technology elite.
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