As you read this, you probably have your mobile phone within reach and have checked it for text messages today. But have you used it to do any shopping?

The mobile phone is ubiquitous today. According to the Mobile Data Association, 53 million people in the UK own one and half of the population can access the internet using their mobile phone. A survey by Mobile Media Monitor last month showed that people would rather give up the internet on their computer than their mobile phone - a fact reinforced by the way most people personalise their phone with handsets, screen savers and ringtones.

Using your mobile phone to redeem vouchers, view product marketing and to pay for products may seem cutting-edge but retailers such as Argos and Firebox.com have already realised that the mobile phone may very well be the way to reconnect with those alienated shoppers.

"Being able to buy via your mobile is only just taking off," says gadget retailer Firebox.com managing director Christian Robinson. "It's a natural move for shoppers who are young and want to use 3G (third generation) technology they have on their handsets."

Retailers such as Marks & Spencer, Comet and Tesco have taken a controlled approach to the mobile proposition and are initially using the technology within their businesses for executives. However, entertainment retailers are starting to do well as shoppers start downloading music. Buying ringtones has taken off - transaction specialist Retail Decisions chief executive officer Carl Clump says there are more people downloading ringtones to their mobiles than purchasing singles. "As these consumers form a habit of purchasing through their handset, other items tipped to be popular are parking meters and goods that are usually purchased using cash," he says.

Jill Hide, head of retail at multichannel expert Conchango, agrees. She says in five years consumers will emerge who are used to using mobiles. "Retailers need to think hard about grabbing a new approach to building relationships with these shoppers," she says. Consumers are already ordering products, redeeming vouchers and even paying for goods using their mobile phones.

Ready to collect: Argos's SMS shopping service, Check and Reserve, provided by software vendor Digital Rum, has been running for about 18 months and has enjoyed impressive growth. Customers can reserve products in their local stores through their mobiles and pick them up later. Argos head of e-commerce Indira Thambiah says the customer notification service, in which customers receive a text to let them know their order has arrived, is proving very popular. "Integrating a new channel with the rest of the business is always a challenge, but that's what multi-channel retailing is about," says Thambiah. "Customers find text communications for quick, punchy service messages very useful. They have also found the Check and Reserve capability we offer via text invaluable, especially at Christmas, when time becomes even more valuable."

Digital Rum chief executive officer Bob Pike, whose company works with Amazon, HMV and Vue on similar schemes using mobiles, says: "Most retailers have been slow to catch on, but they can't ignore this type of customer response. The one-to-one relationship is so powerful. At the moment we use SMS, but we are evolving into secure instant messaging to create more of a community."

So far, attempts by mobile phone operators and banks to set up a Simpay m-commerce initiative - where product payments show on a mobile phone bill - have failed when operators pulled out. However, retailers have been getting into the game by sending vouchers and offers to customers' mobiles.

"This hasn't always been on the radar," says Ramesh Kumar, director of sales at Active Media Tech, which has worked with Blockbuster and Carphone Warehouse using offers sent to mobile phones. "The first challenge is for retailers to realise the potential of mobile phones." After this, there are technological challenges such as integration at the point of sale and concerns that consumers may feel their privacy is at risk.

Jacksons stores, the convenience supermarket owned by Sainsbury's, solved this problem by asking customers to sign up for a service by text message. Customers are sent unique membership numbers in the form of a barcode and each week they receive a list of exclusive offers by SMS or MMS (multimedia messaging). To claim offers, the barcode is scanned at the checkout. The scheme was rolled out to 35 Jacksons and Sainsbury's at Jacksons stores last month.

Marc Lewis, founder and chief executive of the Light Agency - which is behind Jacksons' technology - says: "What's unique about the boom of the mobile phone is that, unlike VHS, DVD and the internet, it has not been driven by adult content and porn. Consumers are engaging with commerce transparently on their phones. Three years ago, location-based mobile technology was proven, where customers can be targeted with messages if they are near a store. It was felt to be too intrusive, but no one really asked consumers. However, in Jacksons, one in three customers has joined our scheme with zero marketing."

Lewis says Sainsbury's is piloting the use of mobiles and that his company is in talks with a music retailer. Because of the limited sites and portals that can be browsed from most mobile phones, payments for products through mobiles has not yet become widespread. However, Lewis predicts most retailers will take incremental steps towards full payment by phone from zero-risk purchases and vouchers through micropayments.

M-commerce specialist Reporo uses a Java-based platform rather than WAP, allowing shoppers to browse and buy from shops such as CD Wow and Figleaves.com on their mobile phones. Reporo marketing director Kim Walma says: "It is already a viable payment channel and is an extension of what consumers are already doing." Mankind.co.uk, which sells male grooming products, can be accessed through Reporo's mobile phone web portal. Mankind founder Paul Jameson says although the company has so far had limited success with the initiative, it wasn't prepared to miss a trick.

"The mobile phone is obviously the future and we wanted to get involved," he says. "It is not too complex or costly to launch, but it works better for some products than others. For our products, it is just about acceptable to see a small image and it works for for a shopper making a repeat purchase, but over time handsets will improve."

Boots is dipping its toe in the pool, offering flowers via Reporo's scheme. A number of big high street retailers are also known to be considering promoting products through mobiles based on customer profiling.

Special relationship: Product marketing using mobile phones has not only excited marketers drooling over high response rates, it has also introduced consumers to the concept of having a relationship with retailers through their mobile. Retailers have been taking note of mobile operator Orange's deal with Odeon cinemas to allow Orange users to receive a code by text that gives them two-for-one tickets.

Software developer Impaq group interviewed 659 UK consumers earlier this year, consulting retail, technology and marketing experts to analyse the impact that mobile phones have had and could have on retail. It found that 70 per cent of mobile phone users always carry their phone and that UK mobile phone ownership stands at 83 per cent, with more than 90 per cent of the population younger than 44 owning a phone.

Impaq believes that major retailers will soon be experimenting with gaining competitive advantage through mobile-enabled solutions focused on small segments. Medium-sized retailers will be attracted by the speed, interactivity and personalisation possibilities, as well as the low cost of mobile-enabled solutions for things like marketing.

Impaq also researched the 10 key services that consumers wanted from their third-generation phones. Consumers who responded said they are looking forward to using their mobiles to redeem coupons, pay for car park tickets and take part in loyalty programmes, as well as use them for flight check-in confirmation and season tickets. They would also want to use their mobiles to pay at vending machines and at retail checkouts.

Impaq group director Chris Thomas says: "Our mobiles are now an established part of our identity. We tend to have them with us all the time, so it makes sense for us to use them more and more for the things we need to do every day." In June, Ted Baker launched a customer campaign with a mobile marketing competition - its first SMS promotion. The initial competition was promoted through in-store mechanics, encouraging customers to text a short code with amusing, imaginary place names: travel is Ted Baker's summer theme. A reply message then prompted another send from the consumer with demographic details, in return for which every customer was awarded a gift.

"We perceive that our target customer base is highly responsive to, and comfortable with, contact with the Ted Baker brand through mobile means," says Ted Baker brand communication director Craig Smith.

With marketing campaigns such as this leading the way, voucher redemption and payment using portals would seem the next step. If these uses are no longer futuristic, what are the forward-thinking technologists imagining when they think of m-commerce a decade from now?

Mobile Commerce business director Brian Stockwell believes mobiles able to read barcodes will become the norm in the future. "You wouldn't want to type a URL in to a mobile, but you might scan a barcode on a poster to get to a retailer's web portal," he says.

However, there are some technological hurdles to leap before this can become a reality. Handsets must be up to scratch, consumers have to know how to use them and retailers must have the supply chains and payment interfaces to cope with yet another channel. Conchango managing principal David daSilva says: "For big grocers, time at the point of sale is crucial so they would avoid any delay using mobile barcodes for now. The technology needed to scan codes on a mobile phone screen is not here today and a handset being used to scan barcodes or RFID is years away." However, retailers engaged with this debate know that for this technology to work, they must get their own houses in order. "Most of the limitations to expanding mobile services are around the interface rather than the technology," says Thambiah. "For the moment, our use of mobile telephony will concentrate on value-added services. It will become an integral part of a multi-channel offer. Argos offers choice, value and convenience and being able to interact with the customer via their mobile phone is a very important part of this."

Back to top...