As m-commerce moves from low value digital goods to more complex bundles of content and even physical purchases, a new era of collaboration is required. Raomal Perera, CEO of Valista (MPW 33) gives MPW his view.
Value-added services have proved extremely effective in retaining customers and generating revenue streams. Operators that have launched such services report their churn rate has been dramatically reduced and their customer base has widened. As m-commerce took its early steps, many mobile operators chose to adopt a ‘walled garden’ approach to selling content and services, directing users towards approved, branded services. In this model, operators present their own storefront and manage the purchasing process from pricing and marketing through to supplier settlement and post-purchase care.
However, as the volume of m-payment transactions grows, and consumer uptake increases, the limitations of this approach are becoming apparent. Most operators currently do not know enough about retailing to handle the process efficiently and this deficiency will become increasingly problematic as m-commerce moves beyond digital content. What is needed is an approach that allows operators to broaden their offering while maintaining quality assurance and control over the user experience that the walled garden allows. This is the new realm of collaborative commerce.
Collaborative commerce involves operators working with content providers, to offer a wider range of content to customers, using marketing specialists to ensure services are promoted successfully and streamlining the purchasing process using delivery and payments specialists. In the walled garden model, operators act as retailers, handling most of the processes associated with a purchase. Collaborative commerce enables the operator to focus more on what they are good at such as payments processing, while merchants, content providers and marketers cover the pricing, advertising, and marketing processes.
This approach allows mobile operators to rapidly build and deploy sophisticated promotions from third-party suppliers, as well as selling bundled services from single or multiple merchants to subscribers. This provides operators with the ability to add new revenue streams, attract new subscribers and strengthen existing customer relationships by offering premium services which can be introduced quickly to the market. Loyalty programmes, multi-merchant promotions and discounting are powerful tools for the service providers to encourage customers to do more in the m-commerce world, without significant costs.
Collaboration will become increasingly important over the next 12 months, as m-commerce moves from being an outlet for low value digital content, to a genuine retail channel of value for the distribution of hard goods. Brands will soon be looking to offer complex packages of goods and services and it is conceivable that a ringtone and wallpaper could be bundled with, for example, a T-shirt or CD album, heralding the new era of mobile services which will be rolled out in a more open, collaborative way.
For collaborative commerce involving multiple vendors to work, carriers need to streamline contract negotiation, provisioning, transaction management, settlement and post-purchase care. Collaboration is the business imperative of our time. For mobile commerce to be both relevant and effective in today’s complex and unpredictable environment, no company can succeed alone. M-commerce has a lot of potential, but to achieve that potential the value chain is just going to get more complex. Collaboration will be the key to the industry realizing its potential in this space.