Actually I will not spam you and keep your personal data secure
A chart based on US Census Bureau and Comscore data was published by Business Insider. It shows Mobile Commerce growing three times faster than Ecommerce overall.
The numbers behind it are very interesting:
Smartphones and tablets have brought forth a revolution in computing and social interaction. Unfortunately for overenthusiastic mobile-only fans, mcommerce usage is lagging behind mobile device adoption.
If you look at the chart above you’ll see there’s a linear growth in mobile commerce. Not a hockey puck growth. Not even an accelerated growth.
Even more – ecommerce accounts for only 5.9% of all retail. Mobile commerce itself is just 11.4% of ecommerce. This means mobile commerce, however ambitious is pretty much insignifiant. It accounts for just 0.67% of total US retail.
And hey – it’s not the fact that people don’t like smartphones. Oh no. People love smartphones:
They also love tablets. Almost 42% of all US adults own at least a tablet. Remember – this is a product that went on sale only 4 years ago, when Apple introduced the iPad. In just 4 short years, the tablet has become a virtually ubiquitous computing item for US adults.
So – people are buying mobile devices like crazy. PC sales are dropping yet the mobile commerce is just 0.67% .Why?
The short answer – there is no mobile commerce.
Mobile is the bridge. It helps connect the physical world to the virtual world. The act of purchasing happens on multiple channels. Mobile is not “the future”. It is the present yet the present comes in a form we have not met before – a bridge across channels.
If we take the time to see matters from the consumer’s point of view things are not as black and white as we expect them to be. Few if any consumers think in terms of mobile OR desktop OR brick and mortar. The consumer will spend time in a B&M store, browse the web to search for the right products, do a little showrooming to find the be best pricing. In the end, the whole purchasing experience stretches across channels and some are more popular than others.
But the customer has only one perspective where channels blend in. The omnichannel perspective. To provide the ecosystem for this perspective, the new retailers will try to understand and implement omnichannel retail because mobile, however massive, is just a piece of the puzzle.
A very select group of companies lead the way when it comes to omnichannel retail solutions. Intershop is one of these companies. Having unveiled its first online shop in 1994, it’s also one of the most experienced and innovative. Now more than 500 mid-sized and large companies benefit from its solutions. Among these you can find Hewlett-Packard, BMW, Bosch, Otto, Deutsche Telekom, and Mexx.
We’ve reached out to mr. Jochen Wiechen, Intershop’s CTO, for a few thoughts on the future of retail. Previously a VP of ERP powerhouse SAP, mr. Wiechen holds a PhD in Physics and has a very interesting view on the future of retail.
Jochen Wiechen: Clearly online is the main disruptive technology that has fundamentally reshaped the entire industry, not only retail by the way. Ubiquitous bandwidth availability, multi-media developments and mobile technologies allow for completely new business models and customer experiences.
The customer journey nowadays starts in the Internet, around the clock and everywhere. Sophisticated online marketing activities trigger more and more personalized buying processes that start with extensive research and lead to process innovations such as click and reserve or collect.
Rising online stars such as Amazon, Zalando and Alibaba grow extremely fast and challenge classical retailers who simply cannot ignore these developments and start embracing those concepts by embodying online into their cross-channel concepts. The winners in this game will be the ones who understand the changing customer profiles and associated behaviors as well as the potential of integrating online into an optimized omni-channel system instead of shying away and sticking to the old offline world.
J.W.: Out of the blue Amazon has developed to the leading global online pure play as well as a relevant player in the retail industry. By consequently embracing the online concept into their channel strategy Walmart is currently showing an even faster growth rate of their online channel than Amazon and is a perfect example of a winner in the overall online transformation. Other relevant players in this game are Nordstrom, John Lewis or House of Fraser, for example.
J.W.: Alibaba is projected to pass by Walmart in overall sales this year, the latter being the largest retailer worldwide. In the US alone, Alibaba is expected to grow 30% this year and although its development in Europe is still in its infancy, also here surprises will have to be expected.
J.W.:As stated above, nowadays most customers start their journeys in the Internet which is a profound change compared to classical retail. Already at this stage they are able to browse for any categories and products from anywhere at any time with any device, to compare prices, select within huge collections, take advantage of intelligent recommendations and potentially use fitting engines before they buy either online or in the store where they might collect the selected product.
In order to provide large target groups with these services a highly complex, highly scalable, and highly available IT-infrastructure is a prerequisite. Viewed from the other way around, technology is simply key in the paradigm shift that is currently taking place in the retail industry.
“[…]technology is simply key in the paradigm shift that is currently taking place in the retail industry.”
J.W.:Based on the speed of the disruptiveness that the combination of high Internet bandwidth availability and the development of multi-media capabilities on a plethora of end-user devices has caused in the retail industry it is expected that the evolution of further technologies will continue to reshape the industry.
While Big Data has already gained substantial market share in order to analyze and predict consumer behavior we also see a rapidly growing demand for indoor proximity systems in order to support omni-channel transformations. In general, we agree with analysts that the Internet of Things is the next big thing in not only this industry. Devices, gadgets and sensors of all sorts interact amongst each other as well as with human beings in order to reach a new level of communications and interactions. The winners in the upcoming retail industry battle will be the ones who take advantage of this technology development that will lead to today possibly unimaginable customer journey innovations.
J.W.:On the one hand, mobile devices allow for ubiquitous browsing and shopping which removes any local stickiness of the consumer, who can even choose the best offer while walking through a mall. Recent search engine analytics reveal astonishing portions of regional references in search requests.
On the other hand, this is an opportunity for retailers thereby taking advantage of location-based services by sending ads or promotions to consumers walking by a store, in which a sales person might then use a mobile shop assistant app in order to lure the customer into a well-educated sales pitch that is not only consisting of more or less good guesses based on gut feelings or superficial conversations that help shying away the customer.
J.W.:While the usage of the technology on the consumer side is still in its infancy, Amazon just recently already opened a shop for products coming out of 3D printers and has again proven its leading role in the industry. It is hard to say how far the technology will be able to be pushed in terms of product complexity which then will determine the extent to which it will be used in supply chains.
J.W.:Based on a research project we have been carrying out together with local Universities we are currently rolling out a commerce simulation engine (SIMCOMMERCE) that falls into the category Predictive Analytics and that allows for outstanding optimization capabilities for commerce operators.
Apart from that, we are closely working together with our customers and partners to explore various process innovations by integrating new technologies, devices and gadgets with our platform. With our SEED initiative, with which we scan the market for commerce-relevant leading edge technologies that we can incorporate into our offering we are looking for ways to help our customers to substantially improve their traffic, conversion rates as well as sales and delivery processes. We agree with leading analysts that the Internet of Things will play a dominant role in those developments.
Apple unveiled its new take on the iOS – the iOS 7. Certainly a big change in terms of design, the iOS 7 is actually a bit more than that – it’s an assault on a couple of yet untapped markets. Let’s forget about the shiny new icons for a few minutes and let’s focus on what really matters: iOS7 is a huge improvement for what we now call Mobile Commerce.
What does this “big change” mean for mobile commerce? First off…
Let’s have a look what the iOS means in terms of mobile usage and mobile commerce:
First off – iOS is not the best sold mobile operating system but that doesn’t really matter as the iOS is by far (61%) the most used mobile operating system when browsing the internet. As a result, when it comes to mobile commerce, the iOS is the most important operating system.
We know m-commerce is growing fast, just like mobile usage. Last year meant an 81% increase in m-commerce sales, up to $ 24 Billion and as eMarketer estimates, the growth will continue at a fast rate in the following years, reaching almost $90 Billion in 2016.
That means that the mobile space means big bucks and Apple is all about big bucks. The new operating system is meant for the masses, it’s meant to take on the new wave of heavy (borderline obsessive) mobile users that will be soon shopping online from their mobile devices first.
So – we know m-commerce is big and it’s getting bigger. We know Apple dominates the market. Let’s have a look at iOS7 ‘ s new features from a mobile commerce perspective:
The iCloud Keychain is meant to make it easier for the iOS user to store passwords and credit card information. As mobile devices become more and more personal they will be carrying more and more of our personal information, personal history and, of course, cash.
Even with such a personal approach to mobile usage, one of the biggest bottlenecks in mobile commerce remains the actual checkout. Partly because there are so many inputs one has to fill in. Partly because taking out your credit card and filling in payment details while sipping the Venti Latte at your local Starbucks is not really what comes to mind when you think “secure payments”.
Here comes the Keychain – Apple’s solution to an improved mobile shopping experience.
The iCloud Keychain integration goes beyond online payments, actually. It will probably work also as a NFC wallet, if this patent is any indication. NFC payments and transfer will probably replace the plastic cards in the near future and Apple is sure to be a part of the m-payment revolution.
Apple’s personal and sometimes quite charming personal assistant, Siri, was so far thought to be an overhyped voice controller for the mobile devices. With the iOS 7 Siri gets lots of improvements, with related tweets and social media connectivity, new voice features, improved usability for french and german speakers and Bing instead of Google.
Siri also gets to do a little predictive analysis to better match the user’s need. With better and better suggestions Siri will quickly become the go-to …. uhm … feature … when in need of anything, really. That includes stores, products, restaurants, cafe’s and so forth.
With Siri dictating the recommended venues to spend your money in, that may become a serious threat to Google’s search hegemony, which might be one of the reasons Apple is ditching the search leader.
Apple has been working closely with a couple of car manufacturers, such as Mercedes Benz, Honda and Volvo, to tap into the emerging market of car entertainment and technology. The automotive industry has really taken its time improving car entertainment and control technology but it seems Apple has once again managed to bring on the innovation it is known for.
The “iCars” will be available starting 2014, the year cars will probably start coming equipped with wireless internet. Such news may mean an improved driving experience as Apple promisses a new car experience.
As the iOS 7 comes with an “iRadio”, streaming from Apple’s iTunes library, that may be very bad news for both conventional Radio Stations, online radios and probably, even the new music stars – on demand streaming apps such as Pandora, Spotify or Deezer.
The iOS 7 in Car integration also means location based recommendation from Siri and a decrease in local radios driven sales. Instead Apple will probably push forward some kind of location based ad system. This was probably the reason it was bidding against Google for Waze.
You may wonder why is the iOS7 in the car such a big news for m-commerce. The answer is the letter “M”, for mobile. The car becomes the actual “mobile device”. The iOS7 car integration may be a whole lot more than we expect in terms of market disruption.
Maybe Apple’s iOS7 is not its best take on mobile interface design. Maybe they did get a little too inspired by Windows Mobile. But also, maybe we’re underestimating the new, Steve Jobs free Apple. The company showed guts and determination at launching a revolutionary, if unusual, product. Apple may stumble once in a while but the company continues innovating and bringing change to new markets. The iOS7 may not have the prettiest icons but it is sure as hell huge news for mobile commerce and the car industry.
Not so long ago email seemed to be losing its edge as an useful communication tool. Spam was increasing year on year. Marketers were overusing their email subscribers database and communication tools were popping out everywhere (Social Networking Messaging, SMS, Instant Messaging tools or mobile phone calls – as voice costs were dropping). It seemed that email’s future was pretty bleak.
But than came the iPhone. When it was launched, in 2007, it came with some pretty distinctive features:
At the moment the only reasonable way to check emails on mobile was the Blackberry, a device designed for professional, on-the-go people. It did a pretty great job at keeping the data costs low by using its own compression system for emails but it was not very fashionable and too “business” for the mass-market.
Not long after its launch the iPhone gained momentum and its competitors “innovate-copied” its functions. In just a couple of years the market had access to mobile email.
Next came the shift in telecom’s companies strategy from voice to data. The companies realized that soon users will be less inclined to buy voice plans but they will reaaaaly love to surf the internet. So they pushed forward the data plans and these plans now came with an subsidized smartphone. Everyone wanted the latest iPhone but for those that couldn’t afford one options quickly popped up. Samsung positioned itself as the affordable yet stylish option to Apple’s products. Of course – it got sued and lost but it still reached a pretty large market share.
Ok than – affordable smartphones, affordable data plans and access to mobile mail. How did this change email activity?
Last year Knotice sampled through more than 800 million emails sent in the first six months. It looked at how users behave on different industries and what they found out was that email opens on mobile are increasing year on year. The email opens on mobile increased from 13% in 2010 to 36% in Q1/Q2 2012.
iOS devices lead the way. iOS based tablet and phone email opens amount for roughly 29% of all email opens, while Android devices amount for the remaining 6.3%.
Increase in mobile email opens shows that there are still some places where consumers can be reached. The phone is already part of the “personal space” and those that are able to interact with heavy mobile users can benefit greatly from this new found trend.
Browse the report to find out more. If you’re on the run, however, here are some key take-aways:
The revolution will not be televised, it will be mobile. We will probably be looking into email marketing for mobile with whole new eyes in a few months.
Smartphones are taking the world by storm. They appear to be the fastest growing technology we have ever seen. They slowly grew to a 10% adoption rate and then something changed everything: Apple launched the iPhone. 2 years later the adoption rate reached 40% in the US. Right now nearly half the adults in the US own a smartphone.
Tablets are not doing too bad either: 1 in 4 smartphone owners owns a tablet. The tablet market is expected to reach a 40% adoption rate in the US by 2016.
Apple pioneered a new way of looking at software distribution that has deep roots in Steve Jobs’ vision of “connected consumer”. With the launch of the App Store, Apple triggered a behavior based on instant software delivery and micro payments. The great thing about the system is the seamless integration between the devices and the central market. Payments are easy to make, software installation does not require any advanced IT skills and the iOS makes it easy to operate apps.
Apple app store market was a huge success. It now features more than 500 000 apps, 66% of which are paid. This apps generated over $3.4 billion revenues Apple paid to its developers. Google Play, the Android app store, paid “only” $240 million.
Google Play is actually not the biggest retailer of Android applications. The main challenger to Apple’s reign seems to be the Amazon App Store. According to mobile analytics company Flurry, Amazon generates 89% of iTunes App Store’s revenue.
“All work and no play makes Jack a dull boy”. Jack decided he would play a game on his smartphone and now the mobile gaming industry is expected to generate $7.5 billion dollars in revenues by 2015.
Established game developers such as EA, Gameloft, Ubisoft, talented new comers such as Zynga and Konami and independent game studios jumped the wagon. They had to learn the new rules and understand the mobile users behavior as the mobile gaming industry is a new breed, where concepts such as social gaming, micro payments and in-app purchase matter. The fast growing user base expects new releases, awesome graphics, multiplayer support and the gaming companies serve them well after a few past flops.
The top grossing games share a common feature. They’re freemium. That means they’re free to install and play and generate revenue from in-app purchases. I have discussed the model in the “Social Gaming Architecture” article but let’s go over the basics again:
We should expect mobile gaming to become mainstream. With better connectivity between tablets, smartphones and TV’s we will probably see a decline in gaming consoles popularity and sales.
Because the cost of entry in such a market is rather low for now the market will see new challengers to established gaming companies. Rovio was acquired by EA after the highly popular Angry Birds game went mainstream but Rovio is just one of the many studios just trying to get into the market. I expect mobile gaming, just like social gaming was, to have a disruptive effect on the overall gaming industry.
Physical stores have a greater conversion rate than online stores. Conversion rate for in-store traffic is 20% in fashion, 50% in electronics and 95% in groceries. Physical stores are therefore superior to online stores in terms of conversion rates where a 5% conversion rate is considered very good. Even though classic retailers benefit from a high conversion rate the traffic is way lower than online.
Shopkick is a company based on a mobile product that works on iOS and Android mobile devices. It uses different in-store incentives (discounts, freebies) to reward potential consumers that choose to check in using the app in the partner stores.
The check-in, incentive redeem technology is quite impressive. It does not use, as one might expect, GPS features as these are not accurate enough. Founder Cyriac Roeding, explains just how accurate GPS on smartphones is: “It is so inaccurate that you could check into a Starbucks two blocks away”.
Instead Shopkick uses sounds inaudible to the human ear to check you into stores. The technology is patented worldwide and Shopkick founder says they are doing great with over 7000 large retail stores.
Simply put Shopkick is a mobile based company. But if we think about it – Shopkick is much more than that. It is the bridge between online and offline retail. Its incentives increase real traffic in stores, increase revenue and all with a simple mobile solution.
Shopkick is doing way better than Foursquare in terms of growth acceleration and revenue per user. After all it has real, tangible discounts. While Foursquare offers you electronic badges and peer recognition (“Look buddy, I am the mayor of this place”) Shopkick’s incentives engage users and marketers even more. The numbers are clear on this: with 3 million monetize – able users Shopkick is here to stay.
The internet connected car has been a great concept for quite some time now. As 3G connections become more and more popular and 3G coverage extends to even the most remote areas car manufacturers have seriously taken into account adding internet to your car.
iSuppli’s telematics analyst Richard Robinson expects 25% of all cars to be internet connected in the next 5 years. Changes in auto industry in-car entertainment are expected to be as great as changes in entertainment post and pre dial-up internet connections.
Intel expects the internet connected car to be the third fastest growing technology, after smartphones and tablets. Audi, Ford, Kia and Nissan are among the first to adopt such technology. Audi has equipped the A7 with a Wi-Fi system callled Audi Connect that turns the car into a hotspot able to host 8 connections at a time.
Ford has also jumped the wagon with its Microsoft powered Sync My Ride and has solved the connectivity issue with a simple internet stick solution.
In car internet radio is now an option with MyFord Touch as drivers can tune in to their Pandora accounts and listen to their favorite stations.
Google, Apple, Samsung, Microsoft and LG are already testing connected cars concepts and gadgets. Google has recently confirmed that their self-driving cars have passed the 300.000 miles threshold incident free.
In car internet is surely to develop into a huge industry that will benefit car makers, entertainment and media companies, telecom operators, mobile device producers and of course – the buyers.
As consumers get more attached to their mobile devices and start expecting everywhere connectivity the auto industry will start monetizing on this trend. But that’s not all. What else should we expect? Here are a few consequences of increasing in car internet adoption:
It seems like everything goes mobile these days. Mobile phones get smarter, tablets get more and more popular and people use their mobile phones for much more than voice. Mobile internet usage includes news, entertainment, shopping, social networking and much more.
First of all – what is mobile internet? It is the usage of internet on mobile devices such as handhelds, tablets, personal assistants, netbooks or laptops. It has become quite popular in the past 3 years growing growing from under 1% of total internet traffic in 2009 to more than 10% in 2012.
The mobile internet is expected to surpass desktop internet by 2014, as shown in the attached graph (source). Such a fast adoption rate is caused by:
With mobile internet plans decreasing we will see a clear increase in adoption rate. There is still a long way to go as mobile traffic accounts for only 10% of all internet traffic. Taking into account the fact that Internet has just 32.7% penetration we see that there is a huge opportunity there: mobile internet traffic is due to increase by at least 1000% in the next five years.
Using this date one might think of this potential opportunities:
There are almost 6 billion mobile phones in the world and almost three quarters of these mobile phones are in developing countries. The mobile phones are probably the best connection people of the world have right now. With costs dropping and mobile penetration closing in to 100% mobile phones might be some of the best ways to tap into human behavior, especially in the developing world.
Digicel, the largest mobile operator in Haiti offered anonymized data regarding the post-earthquake behavior of almost 600 000 people. Results were astonishing. Using the data provided scientists Xin Lu and Linus Bentsson managed to create an algorithm that was able to predict with a 85% accuracy where were people going to go after the disaster.
Mister Xin Lu and Linus Bentsson started FlowMinder.org , a place where they can share their research and mobile operator data for NGOs and relief agencies. They believe that the 30 million people displaced by natural disasters can benefit form this and offer Haiti study as a proof of concept.
Several uses can be found in working with such data:
While many positive ways to use mobile services can be found there are several issues that arise such as privacy, ethical usage of data, security of provided data etc. For example – having data publicly available in a natural disaster such as the Haiti earthquake one might wonder how would this kind of data be used by robbers.
Even worse – in such tragic events such as war, public availability of data can, in the wrong hands, result in many deaths and suffering.
I can only hope that in this connected world we will all feel closer to one another, we will be able to put aside our differences and use technology for good rather than personal interests.
Internet has changed many aspects of our lives and will continue to do so. As people shift their attention more and more toward the internet so does the economy.
UK leads the way towards this new economy with a £82bn ($128 billion) internet economy. About 16% of this ecosystem is accounted for by mobile connections. The overall traffic is expected to increase each year between 2010 and 2015 by 37%. What does that mean? Having an ever increasing interest for mobile connections and ecommerce we might see three trends in the future:
Data regarding these numbers has been put together on a study commissioned by Vodafone UK to ATKerney. You can find the study here.
It’s interesting to see that the internet economy reacts to people needs and wants as is stated in the graph bellow:
As you can see the internet is expected to be the most commonly used media in Europe by 2013, with 50% of all media consumption.
The other media (radio, print, TV) is expected to continue to decrease in the following years.
With smartphone usage doubled between 2008 and 2010 it is expected that smartphone terminals will be a major player in the internet economy ecosystem. Data is already used more often than voice. Mobile operators will adjust their market accordingly and that will increase the internet consumption even more.
Online retail (both web and mobile) accounts for roughly £45bn ($70bn) – approximately 6% of GDP, leading the UK to the 1st place in G20 countries as internet economy share of GDP.