As apps and websites become optimized for mobile commerce, and as the "credit card problem" is addressed (see TheFind and Jumio), there will be more buying on smartphones. Most retailers and brands currently assume smartphone transactions happen on the go or in stores (or on other devices). In the home e-commerce is supposed to be the domain of PCs (and increasingly tablets).
The conventional wisdom is that smartphones are more heavily used for shopping out of home and that's been supported by prior survey data. Yet data released yesterday by Nielsen tell a somewhat different and more nuanced story.
The reinvented 4INFO announced a deal with Acxiom this morning that is consistent with the way mobile and the broader digital advertising markets are evolving: advanced targeting and in-store/sales lift measurement.
According to the release, "The partnership provides US consumer brands new levels of mobile advertising precision and confidence for customer relationship campaigns, including the ability to measure results where it counts — at the cash register." Accordingly, companies will be able to use their own data to target existing customers (and prospects) on mobile devices -- and then track response to the point of sale and see direct sales impact.
Facebook has a similar product and relationship with Acxiom. At Facebook "Custom Audiences" allows companies to find and target their own customers on the site or in mobile. Catalina has a deal with 4INFO that leverages the former's purchase history data so that third party CPG companies and others can target buyers of specific products/product categories. But the 4INFO-Acxiom CRM-based targeting and sales measurement may be a first (other than Facebook) in mobile.
Behind the scenes the advertiser's CRM/customer data (or Acxiom audience data) are matched with 4INFO's database on a 1:1 basis. 4INFO claims profiles of 152 million mobile devices covering 101 million US households.
4INFO will also be making Acxiom audience segments data available to its "AdHaven Bullseye" advertisers. Most of the ad inventory 4INFO uses come from mobile exchanges.
It's worth repeating; what's significant about the announcement are the ways that it's a kind of harbinger of the future:
As I've argued elsewhere in-store/sales measurement will become an almost mandatory requirement of many mobile campaigns (depending on the objectives). There are now multiple companies including Placed, PlaceIQ, uSamp and others offering the capacity to measure in-store lift from mobile campaigns. Being tied into CRM databases offers even greater accuracy in terms of measuring sales impact.
Once these methodologies become more widely available and understood, advertisers will demand them. Placed and PlaceIQ will be talking about ad tracking to the point of sale and in-store measurement at Place 2013. The early bird conference rate expires this week. To take advantage register today.
The Pew Internet & American Life Project issued an online banking report (based on US consumer survey findings) earlier this week. Pew found that 61% of internet users said they banked online and 35% of "cell phone owners" also said they used their mobile devices to do some of their banking.
The total adult US internet population is roughly 200 million (give or take a few million). Using rough math and Pew's survey findings, that would mean approximately 122 million people were engaged in online banking in the US. Mobile phone penetration (including non-smartphones) among the US adult population is over 100% according to CTIA.
That means, using the Pew survey data, that roughly 83 million adults in the US are doing mobile banking. Although the percentages in the chart below seem far apart, the actual population numbers are much closer.
According to Pew younger, non-white US adults are more likely to do mobile banking than their white peers:
Young adults (ages 18-29) and whites report the most significant increases for online banking. In 2010, 55% of 18-29 year-olds said they banked online; in 2013, 66% of that group did so. In 2010, 47% of whites said they banked online; in 2013, 54% of that group did so.
Younger adults are also leading the mobile banking trend. However, in contrast with online banking trends, non-white cell phone owners are more likely than whites to engage in mobile banking.
What's interesting to consider is whether online banking will lead to more comfort with mobile bill paying generally and later mobile commerce and payments beyond that. However one factor here is that people mostly trust their banks, and their willingness to conduct financial transactions on mobile devices will depend (for now) on their relationship to the brand or provider in question.
Comscore has published Q2 e-commerce estimates for the US. I discuss those figures over at Screenwerk. The quarterly total is just under $50 billion ($49.8 billion). Of interest here are the "m-commerce" estimates provided by comScore: $4.7 billion in Q2.
Here's what the firm said about mobile e-commerce: "Consumers spent an additional $4.7 billion in mobile commerce (m-commerce) via smartphones and tablets, an increase of 24% over the past year." That means, according to comScore, m-commerce was about 9.4% of e-commerce spending, which is in turn about 5.5% of total US retail.
The firm doesn't detail what percentage of m-commerce is coming from tablets vs. transactions on smartphones. However there are relatively few e-commerce transactions completed on smartphones, though that is growing.
E-commerce on tablets is much like e-commerce on a PC; there is relatively little friction vs. the experience on smartphones. Indeed, most e-commerce sites have not done a good job optimizing their shopping experiences for smartphones.
I'm sure that comScore doesn't have this number but what would be most interesting is the dollar impact of smartphone usage on retail spending, either online or in the store. Smartphones now are an integral part of the shopping process and especially used in stores.
Siva Kumar, CEO of TheFind, told me earlier this week that 70% of the smartphone searches on TheFind's app are happening in stores. Accordingly smartphones are playing a major role in consumer decision making and having a much larger impact on purchase decisions than the still-modest "m-commerce" figures would suggest.
Android's share (of smartphone shipments) across the globe is gaining momentum according to the latest IDC numbers. By contrast there's evidence that Android's US share may have "peaked" according to analysis from Asymco's Horace Dediu.
Below are IDC's estimates showing global market share for Q2 by shipments:
Thus Android stands near 80% of global smartphone shipments, which aren't identical with sales. But it's a directional indication of actual sales.
However in the US market the story is different; Android's share is flat (per comScore):
Dediu points out that over the past six to eight months in the US the iPhone has gained more usage than Android (11M vs. 6.6M users). So it would appear that Apple's US and international fortunes have significantly diverged.
However we also have research from CIRP, which finds (via survey data) that "first time smartphone buyers" in the US (meaning those buying smartphones for the first time now) tend to be older and more price sensitive. They buy "secondary Android brands" (e.g., LG) and keep their phones longer.
Apple's strategy for more price-sensitive consumers has been the iPhone 4 and 4S, which has been reasonably successful to date. However rumors suggest a low-cost "plastic" iPhone for emerging markets and more price-conscious consumers.
When looked at in the context of overall computer operating systems (including the PC), Android will be the dominant OS by 2015 on a global basis -- far outstripping Windows. By comparision, Apple's overall OS share (iOS + Mac OS) is expected to nearly match Windows.
Nielsen revised slightly upward its smartphone penetration data for the US market. Last quarter the figure was 61%; as of today Nielsen says that 62% of American adults own smartphones.
Kantar research has been arguing that their data show the rise of Windows Phones in the US. However the Nielsen numbers reflect that in Q2 Windows Phones had just 2.3% market share. BlackBerry had 3%. And the remainder, 92%, was divided between the iPhone and Android.
Apple continues to be the single leading smartphone OEM, followed by Samsung. Motorola, HTC and LG are closely arrayed after that.
Motorola is hoping to "reboot" its brand and sales with the new Moto X. What's perhaps most fascinating about the handset is that it targets women specifically, by positioning the phone as a personal fashion accessory.
Motorola's former (pre-Google) strategy had been very spec- and male-centric. The company had even attacked the iPhone at one point for being a "princess." At least with this model (Moto X) it's a dramatic shift for the company.
Last week the American Consumer Satisfaction Index (ACSI) released findings asserting that the Samsung Galaxy S3 and Galaxy Note II beat the iPhone 5 for customer satisfaction. The Galaxy S4 was not part of the study, which was conducted before the device's release. Somewhat Ironically, Korean consumers said the opposite: that they preferred Apple devices to Samsung's.
Here are the US ACSI scores by device:
Survey questions addressed the following areas:
What's interesting is that Apple rates higher than Samsung overall in the ACSI company scores -- though Samsung has closed the gap vs. 2012:
Apple more handily beats Samsung in the JD Power ratings, where the iPhone 5 contributed to Apple's overall 2013 smartphone win. In the JD Power satisfaction scoring, Samsung is at the bottom of the group. How can these conflicting scores (within the ACSI and between ACSI and JD Power) be reconciled?
The ACSI report offers no real explanation for the Galaxy and Galaxy Note wins. Other than screen specs, Samsung's phones are not the highest quality Android devices on the market. Arguably HTC, LG and perhaps Motorola have stronger offerings from an overall quality perspective. However Samsung outspends them all (combined) on marketing, which has been the chief driver of the Galaxy line's success.
My suspicion is that consumers are responding to screen size more than any other single variable or factor in rating the Galaxy S3 and Note II above the iPhone. This underscores the larger-screen imperative that Apple now confronts. The company needs to produce an iPhone with a larger screen. And according to multiple rumors, that will happen with the iPhone 6 though not the "5S," which is supposed to retain its current screen of just over 4 inches.
The new Google-Motorola Moto X chose not match the S4 and go to 5 inches after the company did considerable consumer research and arrived at 4.7 inches as the optimal screen span. Accordingly, an ideal screen size for a smartphone is probably right in-between the current iPhone 5 (4 inches) and the Galaxy S4 (5 inches).
There are a number of interesting things about Googlerola's just-released Moto X. First, it emphasizes design over specs. The latter had always been the hallmark of Motorola's previous Android ("Droid") phones. The new phone also allows for an unprecedented degree of customization:
In fact, the way the phone is presented on the Motorola site makes it effectively into a fashion accessory. However that's how many people do treat their smartphones today. The customization, which is smart, is apparently made possible because the phone is manufactured in Texas (rather than China).
But beyond those things, the phone can be activated or invoked without touching it. Users can speak commands to the phone and get responses or create reminders, set alarms and so on. Like Google Glass, Google Now can be initiated with a "wake up" phrase: "OK Google Now." This effectively turns the entire phone into a personal assistant. The TV spot linked below demonstrates this positioning and the functionality in action.
Previously Google Now and voice actions on Android devices had to be initiated by touching the screen: swiping up or touching the microphone icon. That's not required here (I haven't had a chance to use the device). Google/Motorola are using this "always ready" assistant capability to make the device stand out from both the iPhone and other Android devices. Below is one of the new TV commercials for the Moto X, which showcases how Google Now is now being "personified" -- much more like Siri than in the past.
Moto X is priced at $199 with a two-year carrier contract in the US. There will be a Google Play edition but there's no word at this point on unlocked pricing.
There's considerable data (see, e.g., comScore) that indicate Facebook is the most popular mobile app in the US market. That extends beyond unique visitors to engagement and time spent.
Time spent with the Facebook mobile app outstrips every other individual app by a large margin. Earlier this year comScore found that 23% of all time spent with mobile apps was on Facebook. Nielsen has similar figures.
Source: comScore (Q1 2013)
Confirming just how popular Facebook's app is relative to other mobile apps are new survey findings from Consumer Intelligence Research Partners. The company asked 500 smartphone users and 1,000 tablet owners in the US about which mobile apps they used most often.
The question was: "What are the three apps you use most frequently?" There were no suggested responses (no multiple choice answers). The question was completely open-ended. Below are the results:
Among other interesting things Google Maps doesn't make an appearance in the surve results. Yet Nielsen and comScore data reflect that Google Maps is one of the most popular apps and the most popular location-based app. Mysteriously it doesn't appear here at all -- unless it's considered part of "Google." There's no clear explanation why.
Source: comScore (Q1 2013)
Yesterday the Wall Street Journal reported that carrier-backed and NFC-based mobile payments venture ISIS would begin rolling out nationally:
The nearly three-year-old venture, known as Isis, plans to announce Wednesday that it will launch the payment service nationwide later this year after nine months of testing . . .
Isis said that the pilot tests' findings will be incorporated into the latest version of the system. Among other things, the test showed that active users tapped their phones for payment more than 10 times a month. Two-thirds of active users chose to receive offers and messages from specific brands, according to the test results.
While mobile payments will eventually be widespread -- different global markets are seeing varying rates of development and adoption -- the near-term future of mobile payments in the US looks less like ISIS and much more like OpenTable's new (vertical) payments offering.
The NY Times yesterday reported that the restaurant reservations app will soon incorporate no-frills mobile payments:
The payment process, still in testing, will be straightforward, Matthew Roberts, chief executive of OpenTable, said in an interview. At the end of a meal, the diner would open the OpenTable app and pay the check with the tap of a button. The diner can review the check, adjust the tip and finish the payment.
“There’s no scanning, there’s no bar codes, there’s no geeky stuff,” Mr. Roberts said. He said that OpenTable would not take a cut of each transaction if a diner paid with the app. The restaurant would be charged the typical interchange fee for a credit card transaction. The simple transactions through the app are another way to attract people to use OpenTable, which charges restaurants for reservations made through the service as well as a monthly service charge for using its equipment.
In individual store and specific vertical contexts mobile payments are starting to take hold in the US. That's because consumers see concrete value or convenience in using mobile apps to pay (parking is my favorite example). Arguably the most successful example of mobile payments in the US to date is the Starbucks app.
As a general matter, however, credit cards remain very easy to use and there's no common standard or experience available across merchants. Most US consumers don't see a justification for mobile payments in the abstract. But "in the moment" or in very specific situations consumers can recognize their value.
The transition to NFC-based payments will probably still take years in the US market -- unless the next iPhone enables them (ISIS wants to expand to iOS). But there's a significant, immediate opportunity for vertical apps like OpenTable to cultivate consumer mobile payments usage. Mobile payments through the OpenTable app also may create more loyalty and frequency vs. competitors such as Yelp or TripAdvisor.
I believe that these very concrete use cases will help train consumers to trust and adopt mobile wallets/payments, which will eventually pave the way for services such as ISIS or Google Wallet. However it will be 3 - 5 years before there's strong, national consumer usage (and merchant adoption) of these "horizontal" payments offerings.
By contrast people will be using OpenTable payments as soon as OpenTable flips the switch.