Mobile Phones as the Ultimate Shopping Assistants. Mobile Commerce in the Purchasing Process and its Impact on the Consumer Behavior

Content

Abstract

List Of Figures

List Of Tables

List of Abbrevations

1. Introduction
1.1. Objectives Targets And Problem Formulation
1.2. Delimitations
1.3. Execution And Structure Of The Thesis

2. Introduction To Mobile Commerce
2.1. Mobile Commerce Definition and Limitations
2.2. Mobile Commerce In Different Sectors

3. Development And Status Quo Of Mobile Commerce
3.1. Overview Of M-Commerce
3.2. Development Of Mobile Commerce
3.3. Differentiation Of Mobile End Devices
3.4. Mobile Websites Vs. Native Apps

4. Theoretical Framework
4.1. Contingency Theory
4.2. Introduction To The Situation Approach in Mobile Com merce
4.2.1. Situation Adequacy And Situation Potential In Mobile Commerce
4.2.2. Systemization Of Situations In The Purchasing Process
4.2.3. Integration Of CRM Systems In Mobile Commerce

5. The Impact Of M-commerce On The Customer Journey And Consumer Behavior
5.1. Phases Of Customer Journey
5.2. The Changes Of The Customer Journey
5.2.1. The Challenges And Opportunities In The Customer Journey
5.2.2. Multi –, Omni- And Cross Channel For Potential Customers
5.3. The Change Of The Consumer Behavior
5.3.1. Smartphone´s – The Driver´s For Change
5.3.2. The New Consumer Behavior

6. Empirical Research
6.1. Online Survey
6.1.1. Conception And Execution Of The Survey
6.1.2. Analysis And Findings Of The Online survey
6.2. Expert Interview
6.2.1. Conception And Execution Of The Interview
6.2.2. Analysis And Findings Of The Expert Interview

7. Discussion And Implications
7.1. Analysis Of The Different Sectors Which Are Using Mobile Commerce
7.2. The Pros And Cons For Companies By Using Mobile Commerce
7.3. Growth Drivers And Barriers For Mobile Commerce
7.4. Mobile Commerce Trends For The Future

8. Critical Reflection

9. Résumé

References

Articles

Books

Internet

Appendixes
Appendix 1: Online Survey
Appendix 2: Expert Interview
Appendix 3: Aimed Findings and Implementation Of The Online Survey
Appendix 4: Summarizing The Findings Of The Survey
Appendix 5: Summarizing The Interviews Of The Three Different Sectors
Appendix 6: Overview Of The Mobile Performance In The Different Sectors

Abstract

The digitalization of the world increased during the last years rapidly in nearly all areas. The base for the dynamic development is caused by the mobile end devices especially by the Smartphone likewise the increase of quality in the telecommunication infrastructure by contemporary decreasing prices. The access barriers for mobile commerce decreased primarily since the implementation of the first Smartphone and its related innovative operating concept combined with bigger high resolutions screens. The Smartphone became a daily companion for every Smartphone owner and the shopping behavior of the consumers likewise the whole customer journey has changed due to the development in mobile commerce.

The needs and expectations of the consumer to mobile commerce by the help of a special investigation are examined. The situation approach as a success factor for mobile commerce is used due to the fact that mobile commerce is a fast developing marketing instrument and that more companies start to integrate the mobile channel in their multi-channel marketing.

The research question assumes that mobile commerce influences the purchasing process and the consumer behavior likewise that mobile commerce has an impact in the customer journey. Therefore the research question on how the provider can support the consumer during the mobile shopping process is asked. In addition the question how the different clusters can operationally be connected by the help of the situation approach to make the most efficient customer journey will be illustrated.

The empirical research was examined by an Online-Survey for a specific internet affine target group. The investigation demonstrates which functions and characteristics mobile offers should have to increase the acceptance and willingness of the users to buy through Smartphone. Similarly to identify important factors for mobile commerce and to give recommendations to online retailers on how to make use of the mobile advantages in the future to offer the best possible offer to their customer. Furthermore potential barriers or restrictions are identified which give reasons for refusal to mobile commerce offers or even a purchase breakup through a Smartphone.

Mobile shopping in different sectors is also examined to see whether there is a difference in mobile shopping in different sectors likewise if the mobile shopping behaviors of the consumers differ depending on the specific sector or a specific device. Furthermore a closer look on the different sector will be made to see how they can make use of the different basic situations to make the best possible mobile offer. In the end the consumer behavior of the survey sample is analyzed to give an insight for the acceptance of mobile commerce likewise to compare the results with the different sectors. In addition the results help to answer the research questions and give implications for optimization potential in the mobile commerce area especially in relation to Smartphone´s. The Smartphone enables to have all needed information of the internet available anytime and anywhere.

The findings show that Smartphone's are an increasing trend with a growing tendency. They are not only successful because of all their different characteristics more likely due to the fact that they have become a lifestyle factor and somehow also a status symbol.

The number of Smartphone users will rapidly increase in the future, which indicates that related to that the number of mobile commerce users will contemporarily increase.

For online providers, Smartphone´s have become a blessing likewise a curse. The customers are using their Smartphone in the daily life and want instant access to all their needed information. If they are making use of their Smartphone to look for products and services, information or to compare prices, they aren´t really interested in doing very intensive research. The users are just preparing themselves for a potential purchase and they are using their Smartphone´s mainly as a simple tool to find the best local offers or to compare the products and services in a very fast and efficient way. The customers nowadays have become much smarter due to their Smartphone possibilities. They are constantly discovering likewise changing. Consequently retailers have to do it in almost the same and have to make use of their mobile advantages by rethinking the offline shopping experiences of the user´s to meet all the needs of mobile shoppers.

The main reasons for the increase in the future in mobile shopping are the time saving reasons, attractiveness of online deals, multitasking and also shopping-on-the-go. Mobile commerce needs also some more development to fit the needs of the user in the best possible way, in specific areas like security. Especially the secure of the transaction, better shopping experiences and enhanced graphics. It opens a totally new era of shopping, which can be easily adopted by the consumers likewise by the providers.

The research studies and the change in consumer behavior show how the digitalization is changing the whole environment worldwide. What the people know today and what they make use of in their daily life, can be replaced in the near future.

The development cycles are fast changing and to be successful and to be part of the change the companies have to adopt these changes and they should focus on how to make use of the individual customer situations. The Smartphone´s are not only hype, because they are already part of the society. The concept for mobile commerce will not change anymore; rather will be the main part to focus on in the future.

List Of Figures

Figure 1: Smartphone´s Users in Germany (2009-2014)

Figure 2: Classification Of Mobile Devices

Figure 3: Global Smartphone Sales (2009-2016)

Figure 4: iPad Shipments Decline (2010-2015)

Figure 5: Share Of Smartphone And Mobile Phone Sales (2009-2015)

Figure 6: Development Of Native Apps (2011-2017, in million)

Figure 7: Systematics Of Situations

Figure 8: Integrated Station-Oriented CRM-System

Figure 9: Common Consumer Behavior Phases (Buying Funnel)

Figure 10: Phases In Customer Journey

Figure 11: The New Customer Journey

Figure 12: Age Of The Participants

Figure 13: Owner Of A Smartphone Or Tablet

Figure 14: The User Behavior

Figure 15: Consumer Behavior Of Smartphone User

Figure 16: Amount Of The Last Purchase

Figure 17: Purchase Intention Of The Smartphone User

Figure 18: Different Smartphone Factors

Figure 19: Barriers To Purchase Through A Smartphone

Figure 20: Preference For Advertising Shops

Figure 21: A Good Mobile Commerce Offer

Figure 22: Payment Possibilities For The Smartphone User

Figure 23: Statements About M-Commerce

Figure 24: The Systemization Of Situations In Different Sectors

Figure 25: Sector Situation Potential

Figure 26: Prognosis Of Smartphone User Worldwide (2012-2018, in billion)

List Of Tables

Table 1: Example Of The Retail Sector (Separated By Devices)

Table 2: Example Of The Telecommunication Sector (Separated By Devices)

Table 3: Example Of The Airline Sector (Separated By Devices)

Table 4: Differences Between M-Commerce And E-Commerce

Table 5: Mobile Use Possibilities Related To The Basic Situations

Table 6: The Customer´s Change

List Of Abbrevations

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“You have to accept whatever comes, and the only important thing is that you meet it with the best you have to give.”

(Eleanor Roosevelt)

1. Introduction

The success since the implementation of the mobile phones and other mobile end devices as a communication medium was huge and the trend is increasing. The situation of commerce and the telecommunication market has changed and is already in a process of reorientation. Especially in the mobile commerce area strong impulses are made by the consumers.

Growing numbers of users and annual global numbers of sales are proving this development. Many users already describe their relationship with their mobile phone as an addiction. (Lemish & Cohen, 2005, p.191) But also those users, who are not totally addicted to their mobile phone, already changed their consumer behavior during the implementation. Having the possibility to easily contact people in personal and business life, clearly demonstrate this change of the user and the consumer behavior. (Gröppel-Klein & Broeckelmann, 2008, p.35)

The meaning of mobile end devices and mobile services is increasing, especially in the communication field with consumers. Particularly looking at the times and situations where people have a break or nothing to do, for example during a vacation trip or in a waiting line. The mobile devices are also important in situations where the user is looking for something, like an apartment, hotel room or suburban station. (Link & Seidl, 2008, p.54-57) Shopping-on-the-go is a new increasing trend for Smartphone users. It has become easier to purchase or look for information nearly anywhere and in almost every situation. The consumers are able to safe time while shopping multitasking. They profit from the attractiveness of location based deals and coupons which can be found in the internet preferable on-the-go. (Wang et al., 2015)

The retail stores have to struggle with the impact of the online likewise mobile shops, because further developments show that the internet is becoming even bigger in mobile end devices and the use of them. (Liebmann, et.al., 2008) Therefore it is of huge importance for retailers and online shop providers to adapt the fast changes of mobile commerce and to make profit out of the related advantages for their mobile traffic likewise for their offline traffic. During the years mobile pushed the utilization to buy products online. In 2012 over 50% of the Germans owned a Smartphone, which is a plus of 25% compared to 2013 (Lopez, 2014) and the tendency is constantly increasing.

There is a clear trend that during the years even more customers own a Smartphone and make use of it for buying their products mobile. Especially the use of the Smartphone´s to purchase mobile highly increased. The following graph makes this trend clearer, because it shows only the number of Smartphone users in Germany over a longer time period from 2009 until 2014. In the beginning of 2014 approximately 40 million people in Germany owned a Smartphone. (de.statista.com)

Figure 1: Smartphone´s Users In Germany (2009-2014)

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(Source: statista.de, 2015)

Since the beginning of mobile commerce the total e-commerce environment has changed and is still developing. In 2013 almost 13% of all European online purchases were made mobile. Researchers expect for 2018 an increase on mobile purchases up to nearly 50%. Contemporary to the rise in mobile the number of purchases which are made via the desktop are decreased by 7%. (tradedoubler, 2015) Mobile commerce, the purchase of products and services through a mobile device, is much more complex and interesting as these small examples have shown. A new study of the Tradedoubler Insight demonstrates that the highest impact and the biggest potential of mobile devices, like the Smartphone, are the collection of information and the influence on consumer buying behavior which are looking and purchasing products online likewise offline. (tradedoubler, 2015) This phenomenon is increasing, for example German online-sellers are gaining nearly 11% of their customer traffic via mobile end devices. (Strudthoff, 2012)

The part of sales for mobile commerce in the whole e-commerce field is steadily growing and companies like Amazon and Zalando for example, generated turnovers in 2012 through mobile commerce which were more than 100 € million (Amazon) and almost 90 € million (Zalando). (Rehm, 2013) It was nearly 8% of the annual income of Zalando. A study of the advertisement network Zenox showed that during the Christmas time in 2012 the purchases in Europe increased by almost 150% via mobile phone, Smartphone and tablet. Between 2011 and 2012 the sales in mobile commerce doubled by 105%, which is almost 5% of the total e-commerce sales. (Zanox AG, 2013)

The base for this rapidly growing trend is caused by mobile end devices like the Smartphone and tablet likewise the optimization in the telecommunication infrastructure by constantly decreasing prices. The access barriers to mobile commerce especially decreased by the introduction of the Apple iPhone in 2007. Concrete contents could easily be found on the mobile phone and the UMTS^[1] mobile radio technology made the charging times shorter. Since this innovation the whole Smartphone and tablet market is booming and the sales market for desktop on the other hand remained static and is also slowly decreasing. In Germany 2012 was the first time where more Smartphone´s, by almost 16 million devices, were sold than conventional mobile phones. (Bitkom, 2013)

Also online purchaser and service provider are providing on their supply sides a growing acceptance of the mobile purchase, because of the fact that it is difficult to handle the display of the Smartphone´s with the thumb for normal websites. The e-commerce offers have to be adapted to the needs of the Smartphone and tablet users wherefore the screens of the phones are constantly becoming bigger. A special website for mobile end devices could be optimized or a special app could be implemented to fulfill these needs of the users. Some companies already make use of such mobile webpages or apps, for example 15 of the 20 top-selling Online-Shops in Germany already have such a mobile webpage. (Huber, 2015)

The flip side shows that others are still not using mobile webpages. Only 25% of the Online-Shops with a turnover of more than 12€ million had a Smartphone mobile optimized website in 2012. Just a few of them offer already an Android^[2] or iPhone optimized webpage. (Rehm, 2012) With almost 57% the biggest parts of company’s don´t have an optimized webpage for mobile users. Although a survey by the ECC Trade in connection with PayPal and Shopgate showed that almost 60% of the people would like to have an optimization of the Online-Shops for their Smartphone´s and also 50% would also like to have a special app for their mobile shopping. (Linnhoff-Popien et al., 2015) These numbers clearly show that the whole mobile commerce sector is changing and also its influence on the different sectors which are using mobile commerce. Therefore the following chapters will introduce the overall objective targets and the problem formulation. In addition the research questions will be introduced. Furthermore delimitations, the execution and the structure of the thesis will be defined.

1.1. Objectives Targets And Problem Formulation

This thesis will introduce the development of mobile commerce and mobile shopping and consequently takes a deeper look on the growth drivers for mobile shopping and its impact on the changing customer journey likewise on the consumer behavior. Every third mobile user, in Germany for example, is searching directly during his offline shopping for cheaper and better offers via Smartphone in the internet. Every fifth user has gone also directly in the shop trying to negotiate with the employees about price reductions. If there is no price reduction in the end commonly the users are buying their products in the internet, preferably mobile. A current trend study of “Mobile Internetnutzung 2014” of the market research institute Nordlight Research showed that there is a trend that the users especially like to buy electronic articles, vacation trips and media products online. (e-commerce-magazin.de, 2014)

Therefore the author takes a deep look into the development of mobile commerce as well as mobile shopping behavior of the consumers. Furthermore the current situation will be examined likewise the customer journey during the purchasing process to identify the needs and expectations of the consumer to mobile commerce by the help of a special investigation. The situation approach by Link & Seidl (2008) as a success factor for mobile commerce will be pointed out, to see on which factors the success for mobile commerce is depending and how the different sectors can benefit from the specific situations for their mobile offers. Furthermore how mobile influences the customer journey and if it has an impact in the consumer behavior regarding mobile shopping.

The empirical research will be examined by an Online-Survey for a specific target group, which probably will be technic-affine users. Therefore the research question concludes requirements for the demand side for mobile commerce. The investigation should demonstrate which functions and characteristics a mobile offer should have to increase the acceptance and willingness of the user to buy through Smartphone likewise to help to find out how mobile commerce can be used to support the user during the shopping process. Similarly to identify important factors for mobile commerce and to give recommendations to online providers how to make use of the mobile advantages in the future. In addition to that potential barriers or restrictions have to be identified. This could be a reason for refusal to mobile commerce offers or even a purchase breakup. Furthermore an expert interview will give a concrete understanding of the current situation to proof or disprove the overall findings.

Mobile shopping in different sectors will also be examined to see whether there is a difference in mobile shopping in different sectors likewise if the mobile shopping behavior of the consumers differ depending on the sector. In the end the consumer behavior of the survey sample will be discussed and compared to the expert interview to gain an insight for the acceptance of mobile commerce likewise to compare the results with the different sectors to get an overall overview. Furthermore the results should help to answer the research questions and if necessary give implications for optimization potential in that area. Furthermore the situation approach by Link & Seidl (2008) will be applied to the different sectors, to find out if the different basic situations can be helpful for the mobile offers. In addition potential differences and commonalities will be discussed to answer the research question.

Research Questions:

1. How can the provider support the consumer during the mobile shopping process?
2. How can the different clusters operationally be connected by the help of the situation approach to make the most efficient customer journey?

The Master Thesis expects that m-commerce has a huge influence in all sectors especially in the purchasing process and that it has an impact on the consumer behavior nowadays. Furthermore the master thesis expects that m-commerce plays an important role in the whole customer journey. It leads to the question with the background understanding of m-commerce how the providers can fulfill the needs of the customers, who are influenced by m-commerce during their shopping process. In addition the question on how to operationally connect the different clusters by the help of the situation approach to make the most efficient shopping experience for the customer derives. The aim of this thesis is to answer the previous questions to illustrate whether m-commerce influences the purchasing process and the consumer behavior and how provider can support the consumer during the shopping process, likewise to see how the different clusters can be connected by the applied situation approach.

1.2. Delimitations

If a customer purchases a product or a service through the internet, instead of buying it offline in a store, it can be defined as online shopping. (Stallmann & Wegner, 2014) Since the implementation of the internet the number of online shops has increased and a concrete number is hard to define. For many customers it has become more convenient to shop online and the number is still growing globally. The people are buying through the computer (desktop), tablet or Smartphone. Part of mobile commerce and the term mobile shopping are tablets and Smartphone´s. The author also narrows the term mobile shopping down and uses the broader sense of mobile shopping in this paper, with the meaning to shop mobile only via Smartphone, because the Smartphone has become the daily companion for most of the people and therefore the best example for mobile shopping and does not take tablets into consideration. Likewise note – and netbooks are not taken furtherly into consideration in this paper, because they are mainly seen as a compact pendant to a personalized computer. The main focus will be on an internet affine target group, especially in relation to the online survey. Due to the fact that three different German sectors will be examined in the empirical research part, the overall focus will also be on Germany with some international examples and aspects.

1.3. Execution And Structure Of The Thesis

In order to investigate the effect of mobile shopping and the change in consumer behavior the following literature review regarding success factors for mobile commerce by Link & Seidel (2008) will be used as a framework in the investigation to point out the impact the Smartphone´s have on the latter. Furthermore it is to be noted that only the mobile phone (Smartphone) is to be investigated in this paper as the mobile device in the mobile shopping process.

Since the research aims to explain changes that emerge from the implementation of mobile phones with focus on the current and future development, the adapted strategy is to make use of archival research. Therefore the used data is predominantly secondary data relying on existing books, journals, reports and other material examining the nature of these changes and the importance of mobile commerce in the purchasing process and for the customer journey. The thesis is separated into nine main chapters with smaller subchapters.

Therefore the remaining design of the paper will follow the listed structure:

- Introduction to the topic
- Mobile Commerce in different sectors
- Development and Status Quo of M-Commerce
- Theoretical Framework
- The impact of M-Commerce on the Customer Journey and consumer behavior
- Empirical Research
- Overall Discussion and Implications
- Critical reflection
- Summary and conclusion

The first chapter gives an introduction to the topic and the meaning of mobile commerce in the information society. Followed by the objective targets and the problem formulation will be demonstrated. The chapter ends with the aimed execution and general structure of the thesis. The second chapter is introducing the three main sectors which are of high importance in relation to mobile commerce. Therefore each sector will be introduced and a current example is given. The third chapter gives an overview of the current mobile commerce situation followed by its development over the last years. An introduction to the different mobile end devices is given likewise an introduction to mobile websites. The fourth chapter includes the theoretical background and examines the situation approach as a success factor for mobile commerce. Furthermore a short definition of mobile commerce is given and separated in context to e-commerce. The following chapter defines customer journey as a trend of the mobile commerce and shows the different phases a customer is going through during the purchasing process. In addition the changes in consumer behavior caused by the Smartphone are examined. Chapter number six is dealing with the empirical research, wherefore the conception and the executions as well as the findings of an online survey are made. Furthermore an expert interview to support or disprove the findings of the survey is examined. The chapter seven is a discussion and gives implications of the future trends and development of mobile commerce likewise an analysis of the three different sectors which are using mobile commerce. Furthermore potential advantages providers could gain by the use of mobile commerce. The following chapter analyzes the findings of the different sectors likewise compares them with each other. In the end of this chapter commonalities and differences between the sectors are illustrated. The overall findings will be analyzed in the end to look at the acceptance and use of mobile commerce as well as at potential growth drivers and barriers. Chapter nine gives a critical reflection on the topic and the experience of writing the thesis. The final chapter is summarizing and concluding the overall findings and gives some future prospects for the development of mobile commerce and recommendations to mobile page providers on how they can offer and help the customers to get the best possible mobile shopping experience as possible.

The next chapter introduces the term mobile commerce and gives a definition which will be used in this thesis. Furthermore the three different sectors which are of huge importance for mobile commerce will be introduced and a short example is given. Especially these three different sectors mainly make use of mobile commerce and are influenced by mobile commerce and its impact on the Smartphone´s sales likewise on the consumer behavior.

2. Introduction To Mobile Commerce

All the changes of the media and technologies nowadays came mainly along with the introduction of the first iPhone. Many provider who adapted these changes easily or fast nowadays already profit from the benefits caused by the introduction. Those who are at the opposite side, had to struggle especially during the last five years. The advertising revenues of the newspaper and magazine publisher in the area of print media for example decreased rapidly. Amazon is pressing down the prices especially for books to a minimum where bookseller and publisher cannot generate any profits. Movie studios on the other hand are also struggling, because the sales in DVD´s rapidly decreased. (Vogelstein, 2014) However those changes can be almost seen in all sectors and the providers have to adapt to those changes fast. Three sectors which are highly influenced by mobile commerce will be introduced in this chapter.

This chapter is dealing with the different sectors which are retail, telecommunications and airlines. In the face of shopping, mobile devices are currently in a rapid changing process where more people are turning towards their Smartphone´s when they are deciding to purchase something or to look for information. The whole world has changed towards portable Smartphone´s, which have become a daily companion and are therefore non-stop available. The people are constantly “on-the-move” and turned into “shoppers-on-the-go”. Mobile commerce is developing into the “marketing instrument of the future” (Bauer et al., 2004, p.33). The companies have started to integrate the mobile channel into their multi-channel strategy and make use of it for the sales policy measures. This integration has influenced the whole shopping process of the consumer and consequently has an impact on the customer journey. To which extend m-commerce influenced the customer journey and the consumer behavior will be analyzed in the following chapters and shows the importance m-commerce has for the different sectors.

Therefore a closer look will be taken on three specific current examples, in the timeframe from 01.January 2015 to 31.March 2015, to see how they are currently using m- commerce compared to other end devices like tablet and desktop. Later on in relation to the three different examples it will be examined if the situation adequacy can be seen as a success factor for mobile commerce. Based on the further look on mobile devices the framework for mobile commerce applications and services is provided. For this reason the following chapter defines mobile commerce and the further use of this term in this thesis to provide the reader with an insight into the matter of mobile commerce.

2.1. Mobile Commerce Definition And Limitations

In the first instance the term mobile commerce has to be defined for the further understanding and the subject of this thesis. There is no general definition for mobile commerce. Characteristics are on the one hand the use of mobile end devices instead of using computers or notebooks, on the other hand the use of mobile radio networks or other wireless networks. (Wriggers, 2006, p.11)

Mobile commerce includes all phases of a transaction, which means a digital initiation, action and purchase. (Broeckelmann, 2010) Those purchases include digital products like downloads for example as well as the purchase of physical products like a jacket or book. Furthermore the reservation of a hotel room, the purchase of sport tickets or the participation in an online auction like Ebay^[3] are part of the mobile commerce. (Heinemann, 2012)

This thesis will make use of the definition by the Meta Group market research company, which defines M-Commerce as every business transaction, where the involved parties communicate with each other on an electronic way and at least one of the involved parties is mobile during the transaction and this transaction is based on mobile communication. (Wriggers, 2006, p.12)

In mobile commerce different aspects have to be taken into consideration. The Smartphone for example is mostly used differently than the tablet, which has an impact on the user likewise the purchasing decisions for mobile commerce. In general Smartphone´s are much more mobile than tablets, because the user is wearing the Smartphone the whole time and the device is mainly just used by one specific person. Tablets in contrast are theoretically also mobile, but they are mainly used at home or work by more than one person. A typical situation is a user situation by surfing in the internet with the tablet on the home couch by the use of the wireless network, which is also known as “Couch Commerce”. (Wittmann & Stahl, 2012) The different needs of the Smartphone users are part of this thesis and will be more detailed discussed in the analysis of the empirical research. The following chapter will introduce the three different sectors, which are retail, telecommunications and airlines.

2.2. Mobile Commerce In Different Sectors

Mobile Commerce In The Retail Sector

The retail sector is a crisis resistant industry, because the goods are needed independently from the economic development and therefore purchased by the people. But the retail sector is one of the most rapid changing sectors, because retailers are constantly looking for new ways and new technologies to stay competitive. (Hedemann, 2014) There are appealing constantly new selling channels and advanced digital technologies. Especially retailers have to make sure to build the best shopping experience a customer could have and to fulfill the needs. Retailers have to adopt the changes. Based on new habits, retailers are bringing in-store experiences together with digital and mobile experiences to the consumer of today. The key for retailers nowadays is innovation and staying ahead of their competitors and consequently inspiring their shoppers. (Shankar et al., 2010)

To show this development more clearly a current example of the retail sector is given. It shows the mobile commerce development of this provider within the last three month compared to other end devices like tablet and desktop.

Table 1: Example Of The Retail Sector (Separated By Devices)

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(Source: Own presentation, 2015, see Appendix 6)

For the retail sector mobile has become one of the most important channels. The table above shows the mobile performance compared to desktop and tablet. It becomes clear, that the desktop performance is much higher than mobile or tablet, but also the prepared impact for a click on the advertisement and the final purchase is of high importance for retailers to win traffic. This example introduced also the term “Cappuccino Moms”, which means that moms are on-the-go with their cappuccino and baby buggy and contemporarily searching for bargains mobile on their Smartphone at any given situation. This is one of the indicators which will lead to an overtake of mobile towards desktop in the future. The mobile devices are changing fast likewise the innovations and functions, which make shopping-on-the-go even more comfortable especially for moms. Furthermore the retail sector strengthens the combination of different channels like on-and offline shopping, as well as supports the change in consumer behavior, which will be examined more detailed in chapter 6. The example of the retail sector showed in addition, that the mobile shop will be optimized to give the user the best possible shopping experience. (see Appendix 5, 2015)

Mobile Commerce In The Telecommunication Sector

The telecommunication sector touches as many technology-related business sectors like no other. There are some factors nowadays which are causing changes in the telecommunication industry. One of these changes is a shift in commercial and business telephones into VOIP^[4] services, which means the user is able to telephone via the internet for example through Skype. Another shift could be determined in personal telephone use from wired^[5] services into wireless^[6] and related to that the high competition between cable and wired services providers. The amount of data and video accessed through the internet as well as through wireless devices is increasing. The wireless technologies are rapidly changing and developing including Smartphone´s. The research made by plunkett clearly shows that users prefer to make their phone calls, view entertainment, chat or download data on the internet through their Smartphone´s which can be taken everywhere and in any situation without limitations. (plunkettresearch.com, 2015) There is a strong tendency that soon the computers will stop to exist likewise that there are just small exemplars left of the feature-phones, but also the time for Smartphone´s is running. Especially the market for telecommunications is rapidly changing. For example in 1973 Motorola developed the first prototype of a mobile phone and nowadays online 35 years later the mobile phone era already stopped, fast replaced by the introduction of the iPhone in 2007. In 2013 more Smartphone´s than mobile phones were sold worldwide. The trends show that the computer and notebook are also replaced by tablets. (Klotz, 2014)

Overall, the telecommunication sector is in a position of continuous technological and economic changes driven by intense competition and new technologies. Therefore it is interesting to take a closer look in that area. To show this development more clearly a current example of the telecommunication sector is given. It shows the mobile commerce development of this provider within the last three month compared to other end devices like tablet and desktop.

Table 2: Example Of The Telecommunication Sector (Separated By Devices)

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(Source: Own presentation, 2015, see Appendix 6)

The numbers show a classical last-click contemplation, which means the lead or purchase was made by the user on the last click. Maybe the user normally used the Smartphone, tablet or desktop to look for information, but returned to the webpage later and purchased. Only this last click will be counted for the purchase, which includes all orders with at least one conclusion of a contract. The example shows that the importance of mobile in this sector is of huge importance. The whole telecommunication sector shows a high and constantly increase in the mobile field. The telecommunication sector will also increase even more in the next years towards mobile, which relates to the demographic development. The kids and teenager especially who grow up are becoming also a growing purchasing power and the fact that they are digital natives strengthens the use of mobile purchases. (see Appendix 5, 2015)

Mobile Commerce In The Airline Sector

During the last years the travel planning changed a lot in the minds of the people. Instead of informing and booking the flights for the next vacations in the nearest travel agency, people started to look by their self online for the cheapest flights and best offers. Newest research studies now showed that especially the mobile commerce in the travel planning is increasing. Providers of travel portals are noting an increasing impact in Smartphone users. There is a tendency which is showing that mobile pages in the airline sector could overtake the classical webpages this year 2015. (Dziallas, 2015) Mobile commerce is having a huge impact on the flight industry, because the travel planning is nowadays mainly taking place via Smartphone. An industry survey of the PR-agency Wilde&Partner of 2015 showed that online travel portal like Dreamlines and weg.de determine triple-digit growth rates regarding mobile pages. The online travel portal weg.de illustrated that the number of mobile users almost quadrupled within the last two years. The online portal for cruises Dreamline showed that the mobile page impression increased up to 300% in 2014 compared to 2013. Furthermore the platforms for accommodations have similar results. For example the online portal wimdu demonstrated that in 2014 nearly 40% more mobile page impression compared to 2013. (Dziallas, 2015) Those numbers show the high importance of the travelling industry, especially of the airline sector likewise its impact on related sectors like accommodations, restaurants and many more.

To take a closer look on this development a current example of the airline sector is given. It shows the mobile commerce development of this provider within the last three month compared to other end devices like tablet and desktop.

Table 3: Example Of The Airline Sector (Separated By Devices)

illustration not visible in this excerpt

(Source: Own presentation, 2015, see Appendix 6)

Mobile is of huge importance the same manner as in other sectors, but compared to the other sectors the main focus is on the possibility to inform the customers or to give the opportunity that the user can purchase spontaneously additional services for the core product. The performance in the travelling sector shows that the more a user is dealing in the forerun with a product, the less direct purchases are made. Like mentioned above the users tend to look for information for flights, but if they purchase something through their Smartphone commonly via mobile apps, they are booking rental cars, restaurant reservations in the destination, tickets for theatre. Everything which is related to the trip is commonly more often purchased through the Smartphone, but the purchase for the flights is still made through desktop or tablet or also in the travel agency. With a growing long-term perspective the sector will also increase towards mobile and towards the booking of more complex travel packages including the purchase of the flights through Smartphone´s. (see appendix 5, 2015)

The examples of the different sectors showed the importance of mobile commerce in all areas. No matter if it is measured neither to show the number of purchases made neither by the Smartphone nor to fulfill the increasing need for information. Therefore the mobile provider has to make sure to understand those needs and to fulfil them as good as possible. Hence it is important to look at the circumstances and the situation the customer is during the purchasing process and by which factors the process can be influenced. On account of this, the thesis will contemplate the situation approach related to mobile commerce. Furthermore it will be observed if the situation approach has an influence on mobile commerce and the purchasing process of the customer likewise if it can be seen as a potential success factor for mobile commerce. Due to the fact the mobile commerce is of high importance for almost all sectors, a closer look on the development as well as on the status quo is given in the next chapter.

3. Development And Status Quo Of Mobile Commerce

In the beginning m-commerce was defined as every business transaction, where the involved parties’ communicate with each other on an electronic way and at least one of the involved parties is mobile during the transaction and this transaction is based on mobile communication. (Wriggers, 2006, p.12)

Building on the definition this chapter presents the development and changes in mobile commerce especially in mobile shopping. The situation approach already showed that there are many different situations and situation factors the consumers have during the purchasing process wherefore a short overview of the different mobile devices is given. Furthermore the impact of mobile commerce on the customer journey likewise on the consumer behavior will be examined more detailed.

3.1. Overview Of M-Commerce

The mobile commerce is changing and for this reason companies have to follow the development and requirements on the market for mobile services, if they want to profit by the potential of mobile commerce. A lucrative input in m-commerce assumes that different instruments like mobile advertising or mobile targeting will be inserted efficiently and successfully into the marketing strategy of a company. Next to financial benefits m-commerce offers in addition potential in the market research as well as brand building and also offers new possibilities for the customer loyalty. (Schäfer & Toma, 2008) Hence this chapter gives the attention to m-commerce. In the first instance the term will be defined and limited likewise separated from e-commerce. Furthermore the development and the current situation of m-commerce will be observed.

Separating M-Commerce From E-Commerce

Two main features differentiate m-commerce from e-commerce which are “mobility” and “localization”. Therefore the term m-commerce has to be separated from the term e-commerce to point out the meaning of m-commerce for the further understanding. The differences arising from these two characteristics can be seen in the following table:

Table 4: Differences Between M-Commerce And E-Commerce

illustration not visible in this excerpt

(Source: Own presentation related to Elliot & Phillips, 2004)

M-commerce is basically an enlargement of e-commerce, which can be defined as the following, according to the OECD e-commerce: “Electronic Commerce refers generally to all forms of transactions relating to commercial activities, involving both organisations and individuals that are based upon the processing and transmission of digitised data, including text, sound and visual images. It also refers to the effects that the electronic exchange of commercial information may have on the institutions and processes that support and govern commercial activities.” (OECD, 1997, p. 11.)

M-commerce also differentiates from the traditional e-commerce by technology, customer groups and products. (Ternés et al., 2015)

E-commerce is mainly based on the internet and its technical infrastructure and fully developed terminals like the computer and laptop. M-commerce on the other hand make use of the internet as well, but uses in addition to the internet a technology that transfers data over wireless interfaces. (Ternés et al., 2015) Furthermore the m-commerce users are mainly using mobile phones, Smartphone´s and tablets and they wish user friendly and secure transactions. M-commerce differentiates also from e-commerce, because only specific services and products like content services and products wich have subjects to spontaneous decisions will be successful in m-commerce like travels and tickets. (Andris & Balkausky, 2001, p. 4.) The most significant characteristics are not the transfer of existing services to the mobile, it is more the design of the access media like storage capacity and display size. It has to be mentioned that mobile devices, especially mobile phones, are to a specific degree more personal than traditional computers and telephones. (Trzaskowski, 2004, p. 2) It could be one of the reasons why the trend towards m-commerce is increasing. The shopping via smarthphone is highly increasing and the m-commerce sales in Germany increased in 2014 up to 131% compared to the previous year. M-commerce made it possible to shop anywhere at any time. The “mobility” aspect is definitly in the focus while talking about m-commerce. The international e-commerce study of 2015 prognosticated for 2015 that the sales will double. The m-commerce in Germany is increasing. In this year 2015 m-commerce sales of 52,8 billion Euro are expected in Germany, compared to 2014 a plus of approximately 23,1 percent or almost 10 billion Euro more. (Schuster, 2015) In 2014 the m-commerce part in e-commerce sales was around 17% in Germany. The sales are expected to increase for m-commerce for 2015 up to 28% of all e-commerce sales. Mobile is definitly the driving part in the e-commerce growth. (Schuster, 2015)

The next chapter gets involved with the current situation of mobile commerce likewise its development over the last years and shows its impact on the whole purchasing process.

3.2. Development Of Mobile Commerce

The use of mobile is possible since the implementation of the “Wireless Application Protocol” (WAR-Standard) in the year 1997. Low data rates, small display and consequently also the comfort of the use made it difficult to establish mobile at that point. (Heinemann, 2012, p.5) During the year 2000 the euphoria towards mobile commerce was growing, but after the Dotcom Bubble^[7] in 2000, the development was highly behind the expectations.

A change was made in 2007 by the introduction of the Smartphone as well as the covering of a large area supply with fast data connections. (Graham, 2014) To show the important meaning on mobile commerce and to make it clearer an examination of this rapid development is necessary. During the last years many studies showed that mobile commerce is fast growing. The market research institute Gartner 2010 estimated that in 2013 more people would make use of the Smartphone via internet than by computer or notebook. Search queries for mobile devices grew since 2012 up to more than 400%. (Google.inc., 2013) According to Heinemann the number of mobile shoppers increased in Germany in the last years. (Heinemann, 2012)

The internet market research company comScore demonstrated that already 12% of the German Smartphone users purchased services or products through their Smartphone. Corresponding to a study of the “Bundesverband des Deutschen Versandhandels e.V.” from 2012 more than 30% of Smartphone users were using it for their daily purchase. (boniversum.de, 2013) It can be assumed that this discrepancy between percentages relates to different samples of the definition for goods and services. Nevertheless m-commerce highly developed during the last years and is still growing. To point this development out the different mobile end devices have to be observed.

3.3. Differentiation Of Mobile End Devices

Like mentioned above, only the Smartphone will be taken into consideration in relation to the terms mobile device and mobile shopping. This chapter will shortly introduce as well as separate the different end devices from each other for a better understanding of the term mobile device and to give more insights for the development of m-commerce.

An Overview Of The Mobile End Devices

The number of mobile devices was increasing especially during the last decade where the Smartphone likewise the tablet were implemented and developed. The mobile devices mainly differentiate by size and efficiency. (Kuhn, 2003) Mainly on the mobile phone market the traditional mobile phone is decreasing compared to the more efficient and bigger Smartphone´s. The use of mobile commerce on a classical mobile phone is also possible, but the handling is much more complicated. The demand for tablets is also increasing constantly since the first introduction of the Apple iPad. In 2012 nearly 4,4 million tablets were sold in Germany. The demand for tablets highly increased after its implementation, but the latest sales showed that the tendency is decreasing.

The following graph shows the different end devices classified by localization, availability and location-independency to define a mobile end device. Those three characteristics are mainly relevant for the mobile environment and are therefore the base for the classification of mobile end devices. The market for mobile end devices is dominated by mobile phones, Smartphone´s and tablets.

Figure 2: Classification Of Mobile Devices

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(Source: Own presentation related to Tschersich, M., 2010)

According to Tscherich only the Smartphone and the tablet are „mobile devices“. (Tscherich, 2010) This paper excludes tablets as a mobile end device and only Smartphone´s are taken into consideration in relation to mobile commerce. The following subchapters give an explicit overview of the three different devices to point out the importance of the Smartphone for m-commerce compared to the other devices.

The Smartphone

It is hard to define the term Smartphone, because depending on the author the focus on characteristics and consequently also for the definition differs. Bernauer (2008) defines the Smartphone as a mix between mobile phone and PDA^[8]. Mostly they are defined by a bigger display than traditional mobile phones. Another characteristic is that there are more functions like Apps^[9]. Somehow these functions make it usable for nearly everything a person needs and might be one of the reasons why the demand for Smartphone´s is constantly increasing. In 2014 nearly 1,5 billion people worldwide owned such a device whereof only in Germany 41,1 million owned a Smartphone. (statista.com, 2015) 63% of the Germans make use of the internet through their Smartphone in their everyday life, which are almost 25 million people. (Lopez, 2014) It is a daily companion for most of the people nowadays and many people are already addicted to it, especially the younger generations. (Lenhardt, 2012)

In 2007 the simple use by the much bigger touch display and the very innovative operation system IOS^[10] made the Smartphone very successful. Since the introduction the Smartphone increased also by its characteristics and functions, because it became even more comfortable in the use likewise in its efficiency. (Newman, 2013) The following graph shows the global Smartphone sales from 2009 until 2016. It demonstrates the development of the total Smartphone sales worldwide. A clear increasing tendency is illustrated and prognosis show that also in the next years the Smartphone sales will constantly increase. The Smartphone sales for 2015 in Germany are expected to be more than 108% compared to the previous year. (Schuster, 2015)

Figure 3: Global Smartphone Sales (2009-2016)

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(Source: Telecom Trends International, Inc, 2014)

The latest numbers of the worldwide Smartphone market showed that in the third quarter in 2014 the sales increased up to 327, 6 million devices, which is a plus of 25% compared to the previous year. It is already the second time at which the Smartphone sales reached the 300 million.

The leading worldwide Smartphone provider is still Samsung with almost 78 million devices in 2014, but that was on the other hand the first time when the number decreased down to 8,2% compared to the previous year. The second worldwide leading Smartphone provider is Apple. Apple increased its sales in 2014 especially because of the introduction of the iPhone 6 and iPhone 6 Plus, but also decreased down to 0,9% compared to the previous year.

The Chinese provider Xiaomi reached the third place of the worldwide Smartphone providers in 2014 and increased its market share up to 3,2% compared to the previous year. Also Lenovo, who is on the fourth place of Smartphone providers, reached a plus in sales up to 0,5% compared to 2013. (Greif, 2014) These numbers show the increasing tendency towards the Smartphone likewise towards future innovations and technologies.

The Tablet

The tablet is also a mobile device, which is characterized by a very flat body and a sensitive Touch Screen with sizes between 7 to 10 inch. They are working just as Smartphone´s with mobile operating systems and have therefore a higher battery and computing capacities. Differently to the Smartphone they do not have the function to telephone, only data connection through mobile communication or wireless functions. In this case Apple introduced again in 2012 the first iPad. (Pehlivan & Berthon, 2014) Since its implementation the market for tablets is fast growing and in 2012 the sales nearly doubled. According to Schuster the sales for tablets are expected to increase in Germany in 2015 up to 96% compared to the previous year. (Schuster, 2015)

The following graph shows the iPad shipments from 2010 until 2015 with a declining tendency since 2013. The last quartile in 2014 showed that the iPad sales are decreasing, which can also be seen in the overall tablet sales. The numbers of iPad sales will continuously decrease in 2015 according to the well-informed analyst Ming Chi Kuo. (macerkopf.de, 2015)

Figure 4: iPad Shipments Decline (2010-2015)

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(Source: macerkopf.de, 2015)

In the last quartile in 2014 IDC^[11] illustrated the decrease of tablet sales with almost 71 million sold devices. Compared to the same time frame in 2013 with 78% the number of sales decreased in 2014 down to 3%. Since its market start in 2010 by the first Apple iPad the number of sales constantly increased. The last quartile meant for Apple a decrease of almost 18% and also for the other producer like for Samsung a decrease of minus 18%. The highest decreased affected Amazon with minus 70%. Reasons for this development can be that many households already have a tablet; they do not have to be updated often like for example Smartphone´s and they are often used within the family between different members. The implementation of “Phablets”, very big Smartphone´s, devaluate the tablets somehow. Market researcher forecasted for 2015 still an increasing tendency of the tablets due to the publication of Windows 10 and a trend towards bigger displays. (Kalenda, 2015)

The tablet differentiates from other mobile end devices, because mostly they are not used in the sense of mobile. Nearly all attends were made by stationed internet connections. (Kreutzer et al., 2014) The main use of the tablet is therefore made at home and is consequently slowly replacing the computer or notebook. This phenomenon is called “Couch Commerce” where the user is surfing in the home wireless network at the home couch and makes mainly use of primary entertainment like online shopping offers. (Otto Group, 2013) The use and the handling of tablets for looking for mobile commerce offers are much more comfortable than the use of a Smartphone. The wireless connection is often made by fast broadband access like DSL^[12] and enables therefore very fast page impressions without any extra costs for mobile connections. The taller display gives also more room for contents and a much more precise handling and overview. Similarly to the Smartphone the entering of longer texts is a deficit also for the tablet, because they also do not have a physical keyboard. (Decker et al., 2006) According to Gartner, IDC and TrendForce the number of worldwide tablets sales decreased in the last year 2014 down to 2,2% which is 192 million sales compared to 2013 with 196 million sales. Especially Google, Amazon and Apple the leading tablet producers were involved. Apple for example decreased the share of worldwide tablets sales in 2014 by 22% compared to 2013 with approximately 38%. The prognosis for the tablet sales in 2015 is also decreasing according to TrendForce. (Tiefenhäler, 2015) This decreasing tendency is one of the reasons, why the tablet is not as much important for m-commerce than the Smartphone which has bigger impact.

The Classical Mobile Phone

The classical mobile phone has functions like writing SMS likewise telephone and can also be connected to the internet. The main difference to a Smartphone is the smaller display likewise less functions, which ensures on the other hand a longer battery lifetime. Such mobile phones are primary to telephone and less to surf in the internet. The size of the display and the physical keyboard is too complicated to make use of mobile commerce. (Persaud & Azhar, 2012)

Apart from the fact that the Smartphone currently generates the highest sales, the classical mobile phone is globally still demanded. The following graph shows the huge development of the mobile phone compared to the Smartphone from 2009 until 2015 and its share in the mobile phone sales in Germany. In 2009 the number of sales for mobile phones was approximately 83% compared to 2015 the sales decreased down to 14%. The Smartphone sales in 2009 were just 17% in the whole mobile phone sales in Germany which increased up to 86% in 2015, with a growing tendency.

Figure 5: Share Of Smartphone And Mobile Phone Sales (2009-2015)

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(Source: Own Graph related to statista.com, 2015)

Unfortunately for the mobile commerce classical mobile phones have only a minor meaning. According to a research study of eMarketer the total sales of mobile commerce for mobile phones was only 3,8% in the USA in 2012. (eMarketer, 2012) It could be a reason why the number of classical mobile phones rapidly decreased during the last years, because the people are not able to use mobile commerce opportunities on their classical devices.

The above mentioned mobile devices were distinguished and introduced. In the matter the mobility of the devices as well as the meaning for mobile commerce were shown. Two device classes became clearer which are the Smartphone and the tablet, which are more useful for the success of mobile commerce than the classical mobile phone, which will not be taken further into consideration while talking about mobile devices in this paper. The tablet is mainly used at home, but because of its high impact in mobile commerce it will be also classified as a mobile device but not further taken into consideration as well. Notebooks or netbooks likewise ultrabooks are also portable, but in the closer sense not mobile and consequently not part of this thesis while talking about mobile devices. Only Smartphone´s are mainly important for the term mobile devices and mobile commerce.

Like mentioned above the Smartphone´s will increase by new technologies and innovations wherefore the opportunities for the use of m-commerce have to be examined as well. Mobile websites and native apps are growing and more providers are adopting both depending on the sector and offered products. The next chapter will shortly introduce and separate these two terms in relation to m-commerce

3.4. Mobile Websites Vs. Native Apps

Before the benefits of a native app or mobile website can be evaluated, the key differences between them have to be defined. Both have in common that they are accessed on mobile devices like a Smartphone. (Jobe, 2013) A “mobile webpage” also known as “Web-App” is a special webpage which is optimized for mobile end devices like the Smartphone, and which makes it easier to read and to operate through the smaller displays. The mobile page appears through a browser of the device and can be easily handled with the finger tip. Thereby are many access points to the mobile page and most of the providers are offering their mobile products at m.domainname.tld. To put “m” at the front makes it clearer for the users that it is a mobile page and it can be seen that it becomes an unofficial convention. If the user is entering the normal webpage like for example www.zalando.com, a system identifies the mobile user with the help of the WURFL^[13] -database. Consequently the mobile version of the webpage will probably appear. (Jobe, 2013)

A responsive design can be adapted to the specific device and is shown on the webpage. The user could still have the possibility to change to the normal webpage. The advantages of the mobile page are lower costs for the development likewise device and platform independency. (Fling, 2009)

The mobile page can be easily found by search engines and can be normally linked in contrast to a native app. (Heinemann, 2013) Disadvantages of mobile pages are that they cannot access to the interface of the devices for example the function of scanning a bar code.

A native app on the other hand is an app which is especially designed for a specific platform like Google Android or Apple iOs. It is only suitable for one specific computer system and has to be reprogrammed for every new computer system. (Mikkonen & Taivalsaari, 2011) The advantage of this native app is the excellent usability like the possibility to use hardware functions of the device. Apps can be used faster than mobile pages and they can also ensure some offline functions. Adversely the app has to be downloaded first and has to be installed on the mobile device. For this reason the app is mainly for customers, who will make use of this app more often instead of users who are just looking for information once. The development of native apps is much more cost intensive than mobile page, because they have to be created for each platform itself. Nevertheless the numbers of app downloads is still increasing. (statista.com 2, 2015)

The following graph shows the worldwide development of downloads of native apps from 2011 until 2017. Furthermore it separates between free apps and paid apps. It clearly shows that in 2011 the number of downloads on the Smartphone was approximately 25 billion. Until now the numbers of downloads increased with a growing tendency until 2017, which is estimated to reach a number of downloads of 255 billion.

Figure 6: Development Of Native Apps (2011-2017, in million)

illustration not visible in this excerpt

(Source: statista.com 2, 2015)

The creation of an app has to cover at least the two main platforms which are Google Android and iOS. More than 75% of the devices make use of them as a computer system and achieve hence a huge range. If a company has to decide whether to build a mobile website or a native app, the most suitable choice would probably one of the final goals the company has. (Castledine et al., 2011) For the development of an interactive game an app would preferably be the best option for example.

If the main goal is to offer mobile-friendly content to the most extensive audience a mobile optimized website would be the best option. In general a mobile optimized website, next to the already existing online website, should be the first step. Whereas the app makes more sense for developing an application for a particular purpose which can´t be reached by a web browser. (Jobe, 2013)

Independently from the mobile website or native app the customer will decide which of them fits the needs at the specific purchasing situation the most. During this purchasing the customers have many different touch points to look for information or to make the final purchase.

The previous chapter has shown that the Smartphone has the highest impact in m-commerce and that it mainly depends on the situation adequacy the customer is in during the purchasing process. At which time and which location the purchase will be made depends on the situation factors. Hence the customer journey and its different touch points will be observed in the following chapter as well as the impact m-commerce has on the consumer behavior nowadays.

4. Theoretical Framework

This chapter will give an introduction as well as an overview of the applied theory and the mobile devices and its characteristics with relation to mobile commerce. Due to the fact that mobile commerce is a fast developing marketing instrument and that more companies start to integrate the mobile channel in their multi-channel marketing a close look on the situation approach as a potential success factor for mobile commerce from Link & Seidel (2008) will be taken in this chapter. The situation approach is based on the contingency theory by Weil and Olson (1989), which will be introduced in the following chapter.

4.1. Contingency Theory

As a response to prior theories of management the contingency theory, which is also known as the situation approach, was developed in the 1950s and has become one of the best ways to organize. (Weill & Olson, 1989)

The two founders Weill and Olson (1989) found out that the better the fit among contingency variables, like for example between technology and organizational structure, are the better is also the performance of the organization in management information systems. Upon the work of Keller (1994), a preferential issue of contingency theory models is how task technology influences the information processing requirements of the organization. (Keller, 1994, p.173)

Furthermore Becerra-Fernandez and Sabherwal (2001) developed a contingency framework, involving different characteristics of the task which are performed by the specific organizational subunit.

For a better understanding of the diverse strategies, Ketokivi (2006) made use of both classical contingencies like technology for example, as well as contingencies that have received less attention in contingency studies like the competitive business strategy for example. (Ketoviki, 2006) The contingency theory is already well known in association with hotel electronic distribution channels, which would explain the mobile shopping behavior in the travelling by the customers who are using their mobile device in certain situations (Kang & Brewer, 2015).

Summarizing the different approaches, the contingency theory describes the relationship between the external circumstances (situation) and the inside circumstances (structure) of an organization. It means that the structure of an organization has to be implemented by the help of contingent factors to reach the highest performance as possible. Contingent factors are determining factors which are determining the structure of an organization, but which do not have to exist. The extent of the influence of these factors depends on the individual situation of an organization. This theory builds on the principle that there are no design recommendations on how an organization should be structured (Child, 1976, p.1). The contingency theory is based on the specific structure and the different situations an organization is in. Link & Seidl (2008) have taken the contingency theory as the base to show how this situation approach can be used for m-commerce. Therefrom the thesis will focus on the situation approach as a potential success factor for m-commerce. The following chapter will introduce this theory related to m-commerce.

4.2. Introduction To The Situation Approach In Mobile Commerce

The success of mobile commerce is depending on two main factors. On the one hand on the situation adequacy, this means that the provider has to examine all characteristics of a customer situation to launch a situation adequate offer. On the other hand the success of the provider depends on the economic situation potential and the right assessment. The provider has to define the specific parameter values as well as the profit chances of the different customer situations. Therefore the situation approach as a possible success indicator for mobile commerce will be examined.

4.2.1. Situation Adequacy And Situation Potential In Mobile Commerce

The background of the increasing importance of mobility and flexibility likewise an growing market penetration of mobile devices like Smartphone´s, the interest of companies for the use of it is also increasing. Marketing can be defined as a market oriented leadership (Meffert, 2000, p.3), wherefore mobile commerce can be defined as the leadership on the market by the use of mobile end devices. The mobile channel offers the possibility of individualization, in the closer sense a mobile one-to-one addressing or direct marketing approach. The individualization in the classical one-to-one approach just means to address some specific characteristics of the single customer, but the new approach can respond on a specific situation. This situation is characterized by different macro structures like idle-time situations, search situations or emergency situations and also micro structures like current position or timeframe. The possibilities of individualization are therefore not limited on the data profile of the customers, but rather using the individualization including the situation. (Kriewald, 2007, p.10) A combination of the situation adequacy and the customer adequacy is taking place. Consequently the situation adequacy is illustrating on the sphere of action a success indicator for mobile commerce. The situation adequacy offers are more success promising, which means the companies could get higher profits. The amount depends on the situation potential, which is another indicator for the success of mobile commerce. Each provider has to decide if the effort is worth it. This aspect is resulting on the situation assessment and also including the customer reviews. While the success indicator of the situation adequacy is more related to the marketing perspective, the success indicator for the situation potential is more focused on the controlling perspective. It demonstrates that there is a strong connection between the commerce of leadership from the market, and the controlling of leadership towards success. This paper examines shortly that the success of situation specific offers determines on the use of synergy potential of mobile commerce and controlling, or in other words of situation adequacy and situation potential. The following subchapters therefore show the customer situation in connection to the systemization. The customer and situation data will be examined in the context of the integrated customer relationship management system.

4.2.2. Systemization Of Situations In The Purchasing Process

Like mentioned above a special reference to the situation is the main characteristic for the use of mobile end devices as information-, communication- and purchasing channel. Mobile devices or in this case Smartphone´s are typically used on-the-go and consequently also used in different situations for different purposes. This chapter separates between macro structure and micro structure. The following graph illustrates the connections more detailed.

It shows more clearly that the specific situation, macro structure, as well as the particular situation factors, micro structure play an important role. In the ideal case the provider is able to offer the customer an individual situation based product.

Figure 7: Systematics Of Situations

illustration not visible in this excerpt

(Source: Own Graph related to Link & Seidl, 2008)

Macrostructure: The Base For Situations

Within the framework of the Macro perspective the following need and initial situation for the use of mobile end devices can be separated:

- The “idle time situation”
- The “search situation”
- The “emergency situation”
- The “quasi stationary situation”

The first three situations are characterized by their communication and transaction relationship between customer and provider, which can only take place through a mobile channel. Therefore a provider has to include a mobile channel into the multi-channel strategy. (see figure 3, the front office area)

The “idle time situation” describes the unproductive time during any transportation process. Customers who are travelling private or related to business commonly see that they are limited in their personal potential during the trip. Therefore the term idle time situation describes those situations which are not used or situations which cannot be used. In the case of a travelling person for example, who has to fulfill some task also during the trip, is limited by the situation. For a private person who is travelling those limitations during the trip are more towards immaterial areas like leisure time activities for example. By the use of mobile end devices many possibilities appear both for the business travelling as well as for the private travelling person, to make the unproductive transportation time productive and consequently exclude idle time situations. Next to that a broad variety of options for the travelling person in the field of information and entertainment is possible by the mobile end device. For example it has become possible by a mobile end device with internet access to interrogate knowledge by search engines and databases. Furthermore books, magazines and newspapers as well as music or computer games can be downloaded on the mobile end device. In addition to that all other transactions which can be made through the internet can be executed during the trip with the mobile device. This includes for example mobile shopping or mobile payment. (Link & Seidl 2008)

Another base situation for the use of mobile devices is the “search situation”, which is characterized by a short-term and situation dependent need for information or services; and which leads to a correspondent search behavior. Typically these situations appear if the travelling person is in a foreign environment and needs electronic support like for example navigation systems, information for accommodations or local traffic information. In this case the function of the needs for information and services becomes a key role for the geographic position localization. Many localization technologies, the Location Baes Services, are available. (Kriewald, 2007, p.122)

The “emergency situations” are characterized by unintended and unforeseeable need for information and services, like medical emergency, car accident or housebreaking. There are already some devices which have an alarm for help included. In addition many car producers have systems including an automatic emergency call after an accident for example.

In the “quasi-stationary situation” the customer is in a situation with the access to two internet connection possibilities, which could be the mobile or the stationary access. In this case some of the characteristics are towards the use of the mobile end device, because it is faster and easier. Other characteristics are more towards the use of a stationary device like a computer or notebook, because of the extensive and comfortable information representation. Eventually this depends on specific context variables like the person, product and situation characteristics. (Link & Seidl, 2008)

The alternatives have to be seen as competition towards other communication possibilities in the multi-channel strategy as well. (see Figure 8)

The following table is showing the four basic situations (Macrostructure) including the typical mobile use possibilities.

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^[1] The UMTS is the Universal Mobile Technology System, which describes a standard for mobile communications networks, which enables data to be transported wireless faster than data in the usual GSM (Global System for Mobile Communication) network. (Karaanen et al., 2005)

^[2] Android is a software package for Smartphone´s, including many application programs. (Enck et al., 2011)

^[3] Online auction through the electronic trade platform called Ebay. (Botsch & Luckner, 2008)

^[4] VOIP: Voice Over Internet Protocol, the possibility to telephone via internet.

^[5] Wired: the communication between two devices via cables.

^[6] Wireless: the communication between two devices without cables.

^[7] „A rapid rise in equity markets fueled by investments in internet-based companies. During the dotcom bubble of the late 1990s, the value of equity markets grew exponentially, with the technology-dominated Nasdaq index rising from under 1,000 to 5,000 between 1995 and 2000.” (Vogelstein, 2014)

^[8] PDA: Public Displays of Affection

^[9] APPS: An application, typically a small, specialized program downloaded onto mobile devices (Vogelstein, 2014)

^[10] IOS: Is a mobile operating system developed by Apple. It was originally named the iPhone OS, but was renamed to the iOS in June, 2009. The iOS currently runs on the iPhone, iPod touch, and iPad. (Gaugler, 2000)

^[11] IDC: International Data Cooperation

^[12] DSL: Digital Subscriber Line

^[13] WURFL: Wireless Universal Ressource FiLe