Executive Summary

Recent developments in telecommunication and wireless technology have led to the emergence of mobile commerce, the frequently proclaimed “new service frontier.” Mobile services, and transaction services in particular, offer a multitude of new business opportunities for retailers. Moreover, they give rise to a new retail format that involves initiatives to create “mobile retailing platforms.” However, current market analyses do not offer very optimistic results with regard to this new retail channel. If retailers and other service providers want to exploit these business opportunities more effectively, they must gain an understanding of what drives the value perceptions of this mobile channel in consumers’ minds, because value represents the predominant driver of consumer usage intentions toward a channel.

This study develops a model that assesses the benefits and costs that contribute to value perceptions of mobile channel usage, focusing particularly on utilitarian value. Starting from Rogers’ (1995) perceived innovation characteristics, the authors derive three relevant benefits that exhibit a positive influence on mobile value: time convenience, user control, and service compatibility. The model also defines two costs that exhibit a negative relationship with value: risk perceptions and cognitive effort. Moreover, the authors assess the extent to which the relationships between these benefits/costs and perceived value may be moderated by consumers’ time consciousness, i.e., the extent to which they are aware of the passing of time and how they spend it. This trait is particularly relevant in the context of mobile service delivery because of the inherent time-criticality of mobile transaction services. 

Mobile brokerage services, which enable consumers to retrieve time-critical financial information and act on the information immediately through a mobile channel, serve as the context to test the model. The findings illustrate that with the exception of service compatibility, all defined variables are relevant for predicting the perceived value of a mobile channel. Mobile value in turn represents an important driver of consumers’ intention to use the mobile channel for transactional purposes.

Because many retailers currently opt for multichannel strategies, the mobile channel rarely is offered in isolation. Therefore, while assessing the influence of mobile value on mobile channel usage intentions, the authors also determine the impact of the value of alternative channels (retailing and e-tailing) on consumers’ intention to use the mobile channel. The results indicate that when consumers assign higher value perceptions to alternative service delivery channels, they are less likely to use the mobile channel.

In addition, time consciousness significantly moderates the relationships between benefits and perceived value. As expected, time consciousness positively moderates the relationship between time convenience and value, but it attenuates the relationship between user control and mobile value, possibly because user control implies that the control is (partly) removed from the company and shifted to the consumer, which may cause inefficiencies for the consumer. Finally, as predicted, time consciousness attenuates the relationships between the costs (perceived risk and cognitive effort) and mobile value. Apparently, a stronger awareness of how time can be used most efficiently offsets the negative impact of cost perceptions.

These results also offer several implications for managers. Particularly for transactional services, mobile channels can provide added value, because such transactions often are time critical, so consumers demand the ability to react to real-time developments. In general, companies should develop promotional initiatives to create awareness about those possibilities of mobile service delivery with which consumers remain relatively unfamiliar. For example, both time convenience and user control have strong impacts on consumer value perceptions, which managers could emphasize by offering account statements that contain balances and recent transactions, real-time credit and debit information, specific event messages that require client decisions, and so forth.

With regard to the costs of the mobile channel, though risk is still important to consumers, it is not as dominant as prior research has indicated. Consumers are far more concerned with the cognitive effort involved in using a mobile channel. Such concerns can be alleviated through simpler service designs or the provision of more information/instructions to consumers through selling points or Web sites that help clarify the consumer’s role in the service delivery process. Risk concerns also can be diminished by investing in mobile risk management, such as securing better mobile infrastructures and sophisticated data protection schemes.

Moreover, when developing their marketing strategy, retailers should take into consideration the consumer’s level of time consciousness. Especially for highly time-conscious consumers, improving service response and delivery time can be advantageous. For these consumers, it is of crucial importance that they remain up-to-date about how the mobile channel can deliver time-related benefits. Such reminders might come from mobile community memberships, which familiarize consumers with the latest developments through information provided by not only retailers but also other consumers. Finally, for consumers with a lower sense of time consciousness, more persuasive promotional activities are required. These consumers are particularly concerned about the risks involved with mobile services and likely to scrutinize such services for third-party approval seals or other signals that diminish their risk perceptions.