Changing the Face of Commerce with Mobile Technology

Changing the Face of Commerce with Mobile Technology

Today I attended the Greater Philadelphia Chamber of Commerce's networking breakfast where the keynote speaker was Vivek Kundra, CIO, appointed by the White House. It was a very informative presentation that gave a great outlook on the current situation and future of mobile technology and how it affects commerce.

Mr. Kundra who is essentially the country's CIO, spoke about a number of areas in mobile technology. The part that I found exciting was how in a horrible economy and recession, it's the mobile/social media industry that is really making a strong push upward. He talked about how integral our mobile phones have become in our lives. How when we leave the house we take out wallet, keys and phone EVERY time. It was/is recent tech grads that have come into a horrible job market and decided to start their own companies writing app software and contribute to the open architecture operating systems that have helped spawn and grow this area of commerce. Between Apple and Android, there are approximately 500,000 Apps. Many of the apps have a fairly short life span and are copied or revamped. In this 3-6 month period, the developers are reaping huge revenues, but then due to the nature of the cycle, they are forced to reinvent more apps. Mr. Kundra stated that the application industry is a $50 Billion business. I would certainly say that's good for the economy.

He also discussed how mobile technology is fast becoming its own avenue of commerce. In the PC sales world, the price points for products purchased are around the $20-$30 range. With mobile commerce however, it has been lowered to the $1, $5, $10 range which lowers the consumer's hesitation to buy. Things such as ebooks, daily deals, music, that have a lower price point have been incredibly successful, even more so because it's an instant purchase that goes right to your mobile device. With the daily deals/group purchasing, we are seeing a more social phenomenon in buying habits. It's almost like traditional peer pressure. You see a good deal, and then see how many other people have already purchased; it just reinforces the value and lowers the resistance to pull the trigger. Again, on an item of low cost point and immediate delivery wherever you are.

Even traditional brick and mortar businesses are starting to embrace mobile technology. Things like "smart parking lots" or "smart stores" that are Wifi enabled can enhance the consumer's experience greatly. Imagine being able to purchase an item at a retail store without having to wait in line or deal with a snotty teenager who as zero customer service skills? What about finding a parking spot on your phone before ever pulling into the parking lot? These are things that are currently in place. In addition, surveys (per Mr. Kundra) show that an overwhelming number of consumers would rather conduct their business on their mobile device than deal with a live body.

Mr. Kundra spoke about the government efforts to embrace and enhance mobile technology in the US. The government is looking to invest the better part of $20 Billion into the Cloud platform. More and more businesses are moving to Cloud and saving LOTS of money in the process. Data Centers are becoming a thing of the past. Netflix, for example, is run on the Amazon Cloud network. The government itself moved the GSA email and servers to Cloud and save $15 Million.these are real numbers. They also saved $750,000 on www.recovery.gov and used that savings to fight fraud. On average, the low end of savings for large industries and the government to switch even just email to Cloud is a minimum of 25%. In some cases, Mr. Kundra said that the savings was upwards of 75%.

There was an opening presentation by Mr. Mahoney of Accenture that discussed trends from the Mobile World Congress held in Barcelona recently. I will review that in a later blog.

In conclusion, mobile technology's impact on commerce is already huge, but the extent to which it can and will impact how business is conducted here in the US has yet to be seen. Mr. Kundra seems to have a great vision for the country as far as wireless mobile technology is concerned. His forward thinking in hard times definitely eases some concerns about being a new tech start up in the US.

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