M-Commerce at Any Cost

Is data mining a cure for puny consumer interest in mobile commerce?

CONSUMERS HAVE GREETED the arrival of mobile commerce with a huge collective shrug, but that’s not stopping some wireless industry insiders from hyping new possibilities for selling through cell phones. One of the latest trends to develop is to cross-pollinate wireless data services with so-called data mining techniques to draw a bead on wireless Web usage patterns in the hope of identifying potential revenue streams.

The premise sounds vaguely promising, which means it’s not much different from preceding attempts to get consumers to bite on the m-commerce carrot. The only economic certainty is that wireless operators who try their hand at data mining will be spending significant money to do so.

So far, the meager payoffs from m-commerce aren’t worth the added expense. According to a July 9 report from Jupiter Media Matrix, last year fewer than 100,000 out of a potential pool of 6.25 million users made a purchase using the data features of their wireless handsets or personal digital assistants. Dylan Brooks, a wireless analyst at Jupiter, attributes the low number directly to user apathy, rather than to small screen size or concerns about transaction security.

“Data mining will help tailor some of these services, but only after consumers have experimented with them,” says Brooks.

Advocated of data mining say the onus is on wireless operators to start pushing the m-commerce ball forward. “There is no doubt that the wireless carriers are going to have to know the sites that their users are going to in order to better their relationships with their own customers, partners, portals and other revenue relationships,” says Elliot Hamilton, a VP at Strategies Group.

Last month, digiMine unveiled a data mining tool aimed squarely at wireless service and content providers. The product, called Wireless Business Intelligence, is aimed at giving operators a look into what their customers are interested in.

“Service providers are offering data access services and capabilities through WAP (Wireless Application Protocol), but they don’t know what customers are doing with the service,” says Usama Fayyad, CEO at digiMine.

Nick Beasbeas, co-founder of digiMine, says the new offering can help operators find out where users are losing interest and dropping off in an m-commerce transaction or pinpoint a way to communicate a more personalized message to customers based on their preferences.

The digiMine tool doesn’t come cheap: Wireless operators can expect to pay an initial fee of $24,000, and another $30,000 a month for service. A version being marketed to wireless content providers is less expensive, at $15,000 to set up and $12,000 a month for the service, digiMine says its product is bein used by at least one national carrier, although it declined to name that operator.

Jupiter’s Brooks says that until users start showing real interest in the wireless Web and mobile shopping experience, it won’t matter whether service providers can pinpoint where the relationship breaks down.

“Users just don’t get to the third or fourth Web page yet,” he says.

M-Commerce at Any Cost

Source: The Net Economy


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