Serving up M-commerce

by sue marek
February 4, 2002

The scenarios painted by various visionaries portray mobile commerce as an application that is all about convenience. By using a handheld wireless device, consumers can purchase everything from movie tickets to pizza.

But today’s early m-commerce solutions hardly live up to those lofty images described by industry leaders. Typing a credit card number on a wireless device’s tiny keyboard is tedious work and though some existing e-wallet applications help ease the transaction process, most remain in the early stage of development.

Perhaps even more important is the value proposition behind the m-commerce solution. For m-commerce to make sense to retailers, businesses and consumers, it must be easy and economical for all parties to implement. And since the technology still is new and unproven, the transactions have to be relatively inexpensive and therefore less risky for the consumer.

With those criteria in mind, Motorola is embarking on its m-commerce proposition. Topping the company’s list of m-commerce purchases consumers are likely to make is pizza. The company recently announced a deal with Food.com in which consumers can set up an online account with Food.com via their personal computers and then order pizza from Donatos Pizzeria Corp. on Internet-ready mobile devices. The service will roll out nationwide to participating Donatos restaurants by mid-year.

According to Bo Pyskir, senior director and product manager for mobile shopping and infotainment at Motorola, pizza is ideal for m-commerce because it is a known commodity. Wireless devices also allow the pizza maker to show off its menus and specials and the amount of the average transaction is small (between $12 and $18).

Although some may argue that it’s just as easy for the consumer to pick up the phone and call in the order, Pyskir says that’s not so. Motorola, which conducted a similar m-commerce trial last spring with Domino’s, found that after outfitting 21 Domino’s pizzerias in Las Vegas with this application, many consumers preferred to order their food using the m-commerce functions on their phone, rather than making a call.
“Consumers thought their pizzas came faster,” Pyskir says. “And they liked the functions on the phone because they could check on the status of their pizza.” Pyskir also says that because many Domino’s customers are value shoppers, they liked the coupon offers made available through the m-commerce platform because it made them feel they were getting the best price.

The Domino’s trial has concluded and Pyskir says the pizza chain will formally debut the m-commerce application in the next few months.

But pizza isn’t the only m-commerce item on Motorola’s radar screen. The company wants to attract other casual dining restaurants through its alliance with Food.com. Motorola also plans to add non-food-related applications, such as purchasing movie tickets via the wireless phone.
Despite the company’s initial success with pizza outfits, Pyskir admits there are further challenges. Network speed is one issue because if the transaction takes too long, the customer likely will not complete the order. “The total buying experience has to be 45 seconds or less from turning on your browser to completing the order,” Pyskir says. Motorola has designed its m-commerce platform to provide an optimal experience at 9.6 kilobits per second, although the company anticipates faster data speeds once next-generation networks are in place.

Perhaps the biggest and most overwhelming challenge is getting consumers to adopt m-commerce applications and make them part of their lifestyles. Selling customers on an entirely new buying proposition is not an easy task. If the application is too complex or too lengthy, consumers likely will turn back to what Pyskir considers to be the main competitor to Motorola’s m-commerce platform–plain old telephone service. [WIM]