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Mobile Commerce Lagging in Europe

2011 August 8
by David Eads
Europe map for mobile commerce

Europe once led mobile

Mobile commerce was born in Europe, but Europe has lost its way.

Japan and South Korea could argue they were first. They could also argue they still lead the world. Maybe they’re right. However, European style mobile commerce was patterned around the world. Kenya’s M-PESA style branchless banking for the developing world is another pattern that succeeded and is thriving, but isn’t applicable to the well-banked around the world.

Somewhere along the success of the BlackBerry and the iPhone Europe fell behind.

For example, all the UK banks but one implemented Monitise. All the UK solutions provide nearly identical look-and-feel with nearly identical capabilities that once were ground breaking like balance inquiries and person-to-person electronic-check payments if you know the recipient’s bank routing number and account number.

New features and support for new phones is slow in coming. Even worse, talking to UK bankers, they’re not bullish on moving the needle because they think their competitors aren’t either. I’ve had similar conversations with bankers and retailers in Germany, Sweden, the Netherlands and elsewhere in Europe. Europeans are moving slowly, thinking there’s no hurry to compete in the mobile space.

This exact scenario played out in Canada over the last two years. Canada now leads the world in mobile commerce (in my opinion, for this type of developed world model, per capita). A few years ago, Canadians were comfortable with their basic mobile web implementations they had rolled out in the early 2000s. Pilots were done here and there, but nothing bold or large scale had been done since 2000. Executives were comfortable doing nothing, because equilibrium was the status quo.

Then CIBC launched their iPhone app. Apple marketed the app nationwide. It seemed every bus shelter and TV commercial break nationwide highlighted the CIBC iPhone app. Almost overnight, Canadian mobile commerce changed. One bank executive ordered that they do whatever is necessary to become the leader in North America. The entire banking sector exploded into activity with may jobs changing and projects ramping up and the fierce competition continues. National and North American retailers also continue to pull out all the stops finding new ways to let consumers shop with their phone and it’s blurring the line between bricks-and-mortar and ecommerce.

Similarly, the U.S. started earlier and has more activity than possibly anyplace else. The Firethorn mobile banking initiative in 2006 and 2007 sparked U.S. mobile banking and it caught fire with Bank of America’s iPhone application. Soon pizza companies were letting customers place orders via mobile web but full-fledged mobile commerce is still ramping up in a number of verticals. I see waves of maturity in the U.S., with retail banking and travel leading the way, then retail mobile commerce, media and healthcare coming along.

European mobile banking looks very much like Canada. They made early progress, then stalled. Equilibrium won’t stay forever. Sooner or later someone will do something bold, possibly even an outsider. European executives that aren’t making aggressive plans to revolutionize their business with mobile will find themselves blindsided and rushing to catch up.

It’s not enough to make mobile a derivative feature of your online presence or to pick and choose how to offer mobile. The marketplace is dynamic and customers will decide how, where, and when they’ll engage with brands. Companies must reach customers in the medium they’re most comfortable with and in ways that are convenient and useful.

No one knows the right ways to do this for any one business yet. This is why it’s important to figure out now. Companies that are making mistakes now, are setting themselves up for success when it matters.

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