Online marketing firm Monetate puts out a quarterly report, like an increasing number of digital marketing firms today. Using customer data, its "EQ1" (2013) report offers a range of metrics, including e-commerce conversions by channel/platform and average order value. It also breaks out traffic by device category and browser.
This report like others shows that iOS devices are generating a great deal more web traffic than their Android counterparts, which is mysterious given Android's market share dominance. In addition Monetate now shows roughly equal distribution between tablet and smartphone-generated traffic.
According to the chart below smartphone and tablet traffic has roughly doubled since Q1 2012. Tablets are now driving slightly more web traffic to Monetate customers than smartphones. Over all "mobile" traffic is 21%.
Despite Android's market-share lead the iPhone is responsible for almost two-thirds of smartphone-based traffic to Monetate-client websites. In the tablet arena Monetate says that just under 90% of traffic is coming from the iPad, with Android tablets (including Kindle Fire) generating just under 11%.
One of the more interesting charts shows browser market share. What we can observe from the data in the chart below are the following:
TV is arguably the lone traditional medium that been able to retain its premium ad rates and audience reach (mostly), while other media have suffered fragmenting audiences and declining ad revenues. But the fact that millions still watch TV doesn't necessarily mean TV advertising has the power and impact it once did.
A recent study from ad network InMobi, involving 15,000 users from 14 global markets including China, Europe, the US and several African countries, argues that consumers now spend more time with mobile media than TV (there are competing data that show TV is still on top).
The survey found TV to still be the most influential single medium, followed by PC/online and then mobile. Other traditional media lagged behind in their influence over purchase decisions. The following reflects the percentage of survey respondents who reported that the medium "significantly influenced" their purchase behavior:
The data above are not broken out by country. Undoubtedly there would be variation, potentially significant variation, accordingly.
With respect to TV, however, users are now widely "second screening" -- that is, diverting their attention from the programming and advertising to focus on some activity happening on their smartphones or tablets. Two-thirds of the TV audience is now doing this on a global basis, with younger users (<35) being the most likely to multiscreen (graphic above).
What are they doing on those second screens? The survey says they're on social networks or otherwise messaging friends (see graphic below). Note that a substantial number are "searching for information about products" they saw on TV. This represents both a new opportunity for brands and TV advertisers generally.
Marketers now must be conscious that a significant portion, indeed the majority, of the TV audience is going to "look away" at their smartphones or tablets. Marketers must have a mobile optimized presence on search and social media. But beyond simple presence, TV advertisers need to make it easy for mobile users at home to find their products or services easily (the many hashtags used in Super Bowl TV ads is one example).
TV advertisers can drive email sign-ups/opt-ins, app downloads as well direct purchases with the right offers and TV-ad messaging. In addition, with coordination and planning mobile can be used to measure TV ad effectiveness as well.
The larger point is that fewer and fewer TV viewers (especially those under 35) are watching TV or online video without a mobile device nearby. That allows them to either take action on ads they see -- or totally ignore them.
Location-based and WiFi ad network JiWire is out with its Q1 insights report. The document contains a range of information drawn from surveys of mobile users who access the internet at mostly JiWire-powered WiFi hotspots. This quarter the company zeroes in on behavior in the travel vertical and examines multi-screen activity and cross-platform conversions accordingly.
We know that travel is a very mobile-centric vertical with lots of apps for smartphones and tablets. And JiWire confirms extensive multi-device usage for travel research and purchases:
Next comes a fascinating chart showing the multi-screen purchase process in travel (a microcosm of consumer behavior more generally). Google documented this phenomenon previously in research showing that 90% of consumers move “sequentially” between different screens throughout the same day.
Below is the JiWire chart showing how consumers start on one device and often convert on another:
The latest installment of "Mobile Path to Purchase" research from Nielsen, xAd and Telmetrics drills down into retail-shopping attitudes and behaviors. As with the broader study, previously released, the findings show a significant percentage of users are doing shopping research exclusively on mobile devices.
The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”
According to the report, 42% of smartphone and tablet owners did not consult PCs at all as part of their retail shopping research. The broader study found the overall number to be 46%, who didn't use PCs. This is a staggering data point in my opinion.
Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013
If we extrapolate these "mobile only" numbers, assuming they're representative, we're talking about a potential audience of perhaps 54 million in the US who may be relying primarily or exclusively on smartphones and tablets to shop.
Other noteworthy findings from the study include:
The retail report also seeks to debunk a couple of "myths" about mobile usage. The first is that smartphones are used predominantly "on the go" and/or near the point-of-sale. The study found that smartphones were used throughout the pre-purchase research process and that the largest percentage of use was in fact "at the start" of shopping rather than near the end.
Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013
The second "myth" debunked (though not quite as easily) is the notion that most smartphone owners are "showrooming" whenever they shop. The report says that showrooming (in-store price-comparison shopping) is relatively rare and practiced by a very small minority of users:
Only 6 percent of smartphone users conducted their most recent mobile retail search in-store . . . Mobile shoppers are in fact using their devices for comparison-shopping before and after an in-store visit.
However previous survey findings from the Pew Internet Project and Google argue that significant numbers of smartphone owners do compare prices while in stores. For example, Pew's research found that 72% of smartphone owners used their devices while in retail stores. And the more recent Google-sponsored study reported the top in-store smartphone activities were the following:
What the Nielsen-xAd-Telmetrics data argue is that most of this type of activity occurs before or after someone goes into a store. It may be that the wording of the questions influenced these results, though it may not be possible to entirely reconcile the conflicting findings. Regardless, the more important point is that smartphones and tablets are heavily used by consumers as part of their shopping research.
Accordingly, retailers that are not aggressively addressing the mobile audience are completely missing huge numbers of people and potential sales.
The American Customer Satisfaction Index (ACSI) has released new data on mobile phone satisfaction. Apple (iPhone) comes out on top, as it does in the JD Power surveys. However the iPhone has lost two satisfaction points, while Samung jumped seven points, since last year.
The iPhone may be losing ground because Android devices are being released more frequently with a range of feature improvements and form factors. For example, the iPhone 5's screen, which was enlarged vs. the 4S, looks puny by comparison to some of the Samsung devices.
Most other competitors on the ACSI list gained vs. last year except LG, HTC and BlackBerry. Immediately below are the ACSI rankings.
For comparison purposes, here are the JD Power rankings. After Apple, Nokia came in second beating Samsung. Motorola, second in ACSI's list above, was fourth overall in the JD Power rankings.
The ACSI people will tell you that satisfaction ratings matter because they're broadly predictive of future sales performance. I accept that as sound. However the data from year one have not always correctly predicted market share or sales performance in year two. One case in point is online search, where ratings declines for Google have not translated into market share loses and vice versa for other competitors.
It's also worth noting that the satisfaction rankings differences between JD Power and ACSI are probably the result of a focus on different criteria and different questions to consumers. Thus both lists may not be entirely complete measures of consumer satisfaction. However the iPhone did top both lists, which is significant.
The relationship between Google Wallet and Google Checkout has always been a bit confusing. Essentially Checkout was Google's PayPal competitor for merchant payment processing. It has been around for roughly seven years. It never really got traction, in part because Google didn't aggressively promote it.
Google Wallet is Google's mobile payments platform, the major component of which has been in-store NFC payments. It also hasn't seen much adoption, though that may change. It also can be used to store coupons and offers.
Some time ago Google merged Checkout into Wallet. This was a bid to unify the two products. The pitch to consumers was "one wallet for online and in-store shopping." And that's still the pitch. It's the merchant side of things that has changed.
Yesterday Google announced that it was shuttering Checkout (I thought the product name had gone away). The company said it will continue processing payments online until November of this year. Thereafter merchants will need a new payment processor. Google is sending people to Braintree, Shopify and Freshbooks.
If merchants do have current payment processing Google is encouraging them to apply for what it calls "Google Wallet Instant Buy." The idea is to remove friction from mobile buying by eliminating the need to enter credit card data and other related information (e.g., billing/shipping address). The solution is directed at Android app developers. (I suspect Apple will eventually do something similar with iTunes.)
Entering credit card data and related shipping/billing information on a smartphone is a major barrier to so-called "m-commerce." More than 90% of mobile users abandon shopping carts, partly for this reason. Security is another concern for many. However if Google Wallet Instant Buy is widely adopted by Android developers (there are no additional fees or changes from Google) it could have a major positive effect on mobile buying. Stored credit card data in one of the factors that has enabled Amazon to become the mobile commerce leader.
Google has also introduced a Google Wallet Objects API, which allows merchants to integrate their loyalty programs into Wallet and more broadly promote them to Google users. And, as we previously indicated, Google has also introduced the easiest possible P2P send money solution through Google Wallet (via email attachment).
Google has thrown in the towel around merchant payment processing (Checkout). But it has introduced pretty compelling new features for consumers and merchants that should make Wallet a much stronger and more broadly useful product.
Wireless equipment maker Aruba Networks is acquiring privately held Meridian Apps, developers of indoor GPS technologies. Aruba will combine its network-based Wi-Fi technology with Meridian’s software platform for smartphones and tablets to create services for use in public venues. Terms of the deal were undisclosed.
“GPS-based wayfinding solutions are extraordinarily popular, but they don’t work well indoors,” said Keerti Melkote, founder and Chief Technology Officer at Aruba Networks said in a statement. “We intend to address that gap by creating ‘indoor GPS’ using Aruba’s Wi-Fi infrastructure and Meridian’s wayfinding platform … This is a clear opportunity for Wi-Fi to become not only an enabling platform for BYOD, but now across industries, a revenue-producing, customer engagement platform for the business.”
The Meridian enterprise software platform targets large, indoor facilities -- including the Art Institute of Chicago and Macy's store in New York City -- to build custom-made mobile applications that help people get around in public places.
Meridian opened up it platform last November, introducing a pair of SDKs, Nav Kit and Blue Dotto. The company, based in Portland, Oregon, had previously announced a partnership with Aruba Networks competitor Cisco.
For its part, Cisco unveiled Wi-Fi location services and analytics last November, thanks to its acquisition of ThinkSmart Technologies. The features are included in Cisco's Mobility Services Engine built in conjunction with mobile chip maker Qualcomm and AT&T. Cisco has also partnered with IBM for its "Mobile Concierge" service, which enables integrated web applications to be displayed on mobile devices and provides analytics to deliver a customized shopping experience with coupons and promotions.
In-store mapping provider aisle411 announced this week that its smartphone app is currently in use by more than 12,000 retail stores, including Walgreens, The Home Depot, Hy-Vee, Price Shoppoer, and Shop 'n Save, among others.
The mobile application provides directions to specific products and offers searchable store maps. Engaging consumers through in-store mobile apps holds considerable promise for retailers, says Nathan Pettyjohn, CEO of aisle411. "Offline Commerce, or purchases occurring at a physical store, make up approximately 90 percent of all retail purchases. aisle411's mobile platform digitizes the in-store shopping experience so that shoppers can find and buy everything that they came in the store to purchase."
Indeed a growing number of technology companies are offering in-store mapping and customer engagement platforms, collecting data about mobility patterns and giving customers information to make better point-of-purchase decisions. Don Dodge, Developer Advocate at Google helping developers build new applications on Google platforms and technologies, sees enormous opportunities in the future of indoor location technologies, saying it will be a huge market, "bigger than Maps or GPS".
With Apple's recent acquisition of WiFiSlam for $20 million, the indoor positioning and indoor marketing industry is heating up. We'll be watching the market closely as retailers begin to embrace indoor marketing technologies and map the potential use cases going forward.
There are some signs of progress for Windows Phones and Nokia's Lumia line of handsets that exclusively use the operating system. Especially in Italy and the UK Nokia seems to be making some headway. There were also some data showing an uptick in Windows Phones' market share in the US.
The following are two sets of survey-based market share data from comScore and Kantar. Kantar shows much greater growth in Windows Phone adoption in the US than comScore. Regardless, over the past 18 months Windows Phones have largely failed to make a dent in the smartphone dominance of Android and Apple devices.
It's almost 100% certain that Nokia, with its well-reviewed Lumia hardware, would be selling more phones if there were an Android option. However Nokia CEO Stephen Elop has essentially refused to consider that option and is sticking to the company's Windows-only strategy. This comes amid intensifying investor pressure to adopt Android.
According to a recent WSJ article:
Shareholders approved the dividend-suspension proposal, but appear to be losing patience as questions about Samsung and Apple loomed over Tuesday's session. One shareholder asked Mr. Elop why Samsung is achieving what the investor characterized as 10 times better results than Nokia, and another concluded a round of tough questions by saying that right now Nokia isn't displaying "the spirit and charisma" that Apple has.
Over the next 2 - 3 quarters, Nokia may see slightly better results but they won't show the kinds of growth desired by institutional investors. Unless or until Nokia adopts Android sales won't accelerate to any significant degree, to the increasing frustration of investors.
One way or another Nokia will likely be developing Android devices by this time next year -- absent a Windows sales miracle. Either Elop will give in to investor calls for Android or, if he does not, he will be ousted by their calls for his head. And the first act of any successor CEO will be to fast-track Android handset development.
Earlier today xAd put out its quarterly insights report. There were a number of interesting findings and datapoints. The "headline" was that the number of national-advertiser campaigns using more precise geotargeting (more specific than DMA, city or ZIP) had more than doubled over the course of the past 12 months.
In a very general way this mirrors the movement of the market and the growing sophistication and use of location targeting by marketers.
There was also a nice case study involving Pinkberry's introduction of a new line of greek yogurt. Pinkberry's objective was to build awareness and drive visits to local stores. It used xAd enhanced geofencing to target users and show ads within 1 mile of store locations. The were a couple of discounts and incentives (coupons) associated with the product launch.
The display ad clicked-through to a "dynamic landing page specific to the nearest location which features these offers as well as an option to save the coupon, obtain the address, phone number, map, directions and/or more information." According to the case study materials, in two weeks the campaign goals were exceeded by 2X.
As you can see below, the ad creative was very polished. But the success of the campaign also illustrates how effective the combination of local relevance and offers can be. Indeed, xAd's reported average campaign metrics (for both search and display) outperform the industry averages.
More interesting than the findings in the insights report were the findings released last week in the 2013 US Mobile Path-to-Purchase study, undertaken in cooperation with Telmetrics and Nielsen, which conducted the research.
The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”
There were a ton of data that came out of this report, and will continue to be released over time. However the single "blockbuster" finding is that across a range of purchase categories (i.e., Finance, Retail, Insurance, Convenience/Gas) 46% of survey respondents said they relied exclusively on their mobile devices (smartphones and/or tablets) in conducting pre-purchase research online.
Accordingly, nearly half of the respondents did not use or consult PCs -- at all. I was initially shocked by this. I don't have detailed demographic information about who these people were beyond the fact that they skew younger (18 - 34). But this is a huge finding and one that should scare the stuffing out of any brand or advertiser that isn't actively pursuing a mobile marketing strategy.
According to a new forecast by NPD, tablets and touch-screen laptops (tablet-PC hybrids) will dominate the computing landscape in the coming years. More conventional PCs will be in the minority.
Tablets are a new device category really. But let's put aside the longer debate about whether or not tablets should be considered "PCs" at all. There will be more "mobile devices" than traditional PCs (including laptops) sold in the next five years.
At best forecasts can show the direction of the market. But in this case the market's direction is clear.
Global Mobile PC Shipments, 2012-2017
Last week Acer introduced a 7-inch tablet for $169, besting the aggressive pricing of Nexus 7 and comparable Kindle Fire devices. According to one rumor the next Nexus 7 will be priced at $149. But you can already buy a 7-inch Lenovo tablet for $129 on Amazon (quality is another question). The race is on for a "decent" Android tablet starting at $99. I suspect that will come in Q4 this year or very early next.
I was recently in Best Buy and Office Depot/Max and saw the displays of tablets; there are scores of them. It will be challenging for consumers to differentiate them -- especially at the lower end of the market. There will probably be three or four broad consumer criteria for tablets: OS/brand, price, size, specs like memory or battery life.
With the exception of Kindle, Samsung and maybe one or two others the Android tablet universe is a sea of no-name devices. Here the battle will largely be about price. Apple iPads will stand apart because of strong brand identity. However a majority consumers will be price sensitive and likely to simply go after the cheapest "decent" (Android) tablet they find. Indeed, the devices are getting so cheap they're almost disposable.
NPD says "Windows 8 are unlikely to be a major driver of touch adoption." I agree, as presently configured, Microsoft is unlikely to sell many stand-alone tablet devices. Surface Pro tablet-PC hybrids will sell to enterprise customers but Microsoft will struggle to sell basic tablets to consumers unless it reaches that $100 threshold first.
I'm a big opponent of using "shipments" as an indicator of market share. It may be a directional indicator of market share in some cases. But there are times when "shipments" is simply the wrong metric. IDC's latest tablet numbers offer a case-in-point.
The firm reported the following tablet shipment figures globally for Q1:
Basically the positions of Android and iOS tablets have reversed since last year. Shipments are put forward as a proxy for market share by IDC. However that's a dubious proposition at best. Shipments do not equal sales, let alone usage.
The following chart reflects North American tablet traffic share as of March, according to Chitika. After the iPad's 82%, Kindle Fire has a 7% share of traffic. Samsung Galaxy tablets come in at 4.3%. Needless to say these actual traffic data show a massive discrepancy vs. IDC's shipments estimates.
Below is StatCounter data from 2012 (via Royal Pingdom) -- I was unable to find more recent global traffic data. These data reflect something very consistent with the Chitika data above.
In these various geographic markets the iPad is generating around 80% or more of tablet traffic. Even if we assume iPad share has fallen by 10 points since last year, these data are still a radical departure from the IDC figures.
Undoubtedly lower-priced tablets and the sheer proliferation of devices will necessarily diminish the iPad's "shipments share" over time. But it remains to be seen how actual usage is impacted. For the moment market share (as measured by consumer usage and traffic data) looks nothing at all like IDC's projections.
Mobile commerce, at least on smartphones, is partly held back by the UX challenges of forms and inputting credit card digits. Amazon does well in so-called "m-commerce" in part because it has millions of user credit cards on file making the mobile check-out process nearly painless (it also has a trusted brand).
Mobile check-out is part of the larger problem of being compelled to repeatedly sign in to accounts on a mobile device. Though some sign-in credentials are remembered by mobile browsers users are constantly being asked to input usernames and passwords. It's incredibly frustrating.
Nuance (and others) have tried to address this problem with voice authentication in lieu of manual password entry (one of the topics on the agenda at the upcoming Voice Biometrics conference in San Francisco next week). To date, however, voice authentication has seen limited adoption in mobile applications.
Separately Facebook has sought to become the universal log-in, to address the challenges of pain of creating multiple accounts and passwords -- particularly in mobile. Google is now starting to challenge Facebook in that arena, according to a recent study from Janrain.
Many people are disinclined to use Facebook to log-in to third party websites or accounts because of privacy concerns (uncertainty over what might be communicated to their networks). Enter PayPal log-in (and its mobile express checkout solution).
This solves a couple problems for publishers/developers and consumers. First it offers an alternative, single set of log-in credentials offering consumers more privacy than Facebook. It also offers a commerce solution that, like Amazon, avoids the "16 digit problem" of manually entering information on mobile sites.
Amazon and Google both offer comparable and competing solutions for third party merchants. But PayPal is in a strong position to become both a single sign-on and mobile checkout leader. The eBay division needs to aggressively promote mobile express checkout to merchants and the security and privacy benefits and ease-of-use of PayPal log-in to consumers, which will be a significant marketing challenge.
As part of that effort PayPal also needs to do something of a reintroduction of itself generally to consumers at large. Its brand needs to be "beefed up." However among "digital wallets" PayPal by far has the greatest consumer awareness, which the company can use in its argument to merchants.
Whether we call Google Now "predictive search," "anticipatory search" or a "virtual assistant," the capability is highly useful and improving regularly. Previously exclusive to Android devices with OS 4.1 or higher ("Jelly Bean") Google Now is now available for the iPhone and iPad.
You'll need to download the latest version of the Google Search app to get it.
Google Now is partly Google's answer to Siri (and Passbook) and partly a wholly independent development that takes your search history, your Gmail entries, your calendar, your location and other "context" to deliver a range of personalized information without having to actively search for it.
Google Now for iOS operates in essentially the same way as it does on Android devices: users swipe up from the bottom of the screen to receive customized information cards. The cards feature weather, traffic, stock quotes, recent sports scores, local places of interest, movie showtimes and so on. Below is a complete list of the content/data available through Google Now.
The cards on the chart above "missing" from iOS are newer cards that will soon come to iOS. Google confirmed this.
Those who download and use the service will likely find themselves using it regularly (as I do). While it can sometimes be flawed or inaccurate -- if you travel a lot it will often give you information about the city you just left rather than where you are -- it offers a growing corpus of useful information. As mentioned, it continues to expand and improve.
Google requires users to sign in to get access to Google Now, so the company will gain mobile usage data it wouldn't otherwise have in the process. It's a very effective way for Google to get iOS users re-engaged with search on their iPhones and iPads.
A survey we conducted in June of last year (n=503 US iPhone 4S owners 18 and older) found that most people who searched Google on their iPhones didn't use the Google Search app:
Which of the following do you use MOST OFTEN to search the web on your phone?
If this survey were done today we might see slighly different percentages but directionally the results would be similar. It will be interesting to see whether and how the numbers change several months from now -- and whether the introduction of Google Now for iOS has had a meaningful impact on user behavior.
The iPhone 5 introduced a 4-inch (diagonal) screen that in my view distorted the proportions of the handset. (I wanted it to be slightly wider as well.) That was an upgrade from what was essentially a 3.5-inch screen on the 4S. Yet at the time of launch the 5's new larger screen already appeared small next to some competitive devices.
Samsung's Galaxy S3 and others were at 4.8-inches or beyond. The newly released Galaxy S4 has a 5-inch screen and the Galaxy Note 2 offers a 5.5-inch screen. Samsung has also made an 8-inch tablet that works as a phone.
Earlier this week during Apple's earnings call CEO Tim Cook was asked about a potentially larger iPhone screen, which several surveys indicate iPhone buyers want. Here's the exchange:
Analyst: [D]o you think there is a long-term case for a larger screen size or at least the larger variety of screen sizes for iPhones and for the smartphone category in general?
Tim Cook: The iPhone 5 offers as you know a new 4-inch Retina display, which is the most advanced display in the industry and no one comes close to matching the level of quality as the Retina display. It also provides a larger screen size for iPhone customers without sacrificing the one handed ease-of-use that our customers love. So, we put a lot of thinking into screen size and believe we’ve picked the right one.
Tim Cook acknowledged that “some customers” value screen size. He explained that larger displays require trade-offs (technically speaking). He added that the company won’t ship a larger iPhone display “while these trade-offs exist.” That implies the company has larger screen iPhones on its roadmap somewhere in the future.
However Apple is indeed putting itself at a disadvantage by not offering a larger-screen iPhone. Perhaps not everyone wants it but lots of people (including me) do. An ideal device would marry the LG Nexus 4 (4.7-inch screen) form factor with iOS as its operating system.
Apple and Tim Cook seem to be nearly alone in their belief that the iPhone's screen is vastly superior to competitor-device screens. Third party analysis shows that this is not the case. However it does come out on top in some areas. Yet the public may not be noticing these relatively subtle differences. And Samsung's display has been found to have superior resolution and better blacks.
What consumers probably notice more is that the iPhone's screen looks small and by some measures inadequate vs. other devices. One-handed operation of the iPhone is great in a few instances but not entirely necessary. Indeed, it may not be an important feature for most people (though that's an "empirical question").
It does seem to me that screen size is one case of Apple (if it's to be taken at face value so to speak) "making the perfect the enemy of the good." And I think a "5S" without a larger screen option will be a significant disappointment to many.
The challenge of "showrooming" has been met by traditional retailers with either indifference and inaction or its opposite: aggressive price matching. Best Buy and Target are examples of the latter approach. They decided in February to match any price on Amazon year round.
However this strategy lacks "depth."
Price matching alone will not successfully address showrooming; it will in fact encourage it as more smartphone shoppers check Amazon and other sources to see if in-store prices are the best they can do -- and to demand a lower price in store if they find one online.
Signs like the one below invite someone to go to Amazon (if they weren't thinking about it already) and compare prices.
It may be necessary to price match in selected categories such as electronics. But price matching is not a panacea. Instead the retail industry can take a lesson from the hotel industry, which is doing some very creative things with technology.
The New York Times ran a story today about how hotels are using technology to improve the customer experience (including personalization) and lower costs in many instances:
Hotels around the world are using technology in new ways, with the goal of speeding up or personalizing more services for guests.
David-Michel Davies, president of the Webby Media Group, said he visited Internet companies around the world each year for the Webby Awards, which honor excellence on the Internet. He said he had found that hotels were using technology as a substitute for human hospitality.
Instead of the staff at the front desk offering advice on where to go for dinner, guests may be lent an iPad loaded with maps and suggestions for local restaurants and sightseeing. A hand-held device in the room might control the television, blinds and temperature, replacing the role of the bellman who would describe how the features in the room work when he dropped off a guest’s luggage. “Hotels are transforming service into a digital concept,” Mr. Davies said.
There are an enormous number of ways that technology, and mobile technology (apps) in particular, could improve the in-store retail experience. Personalization, notifications, offers, product information and reviews, loyalty, payments and other use cases, if creatively implemented, could make the in-store experience richer, more fun and more rewarding for shoppers.
This creative, "diversified" approach to mobile and the in-store experience holds great promise against showrooming. Retailer size and resources would affect the scope of what might be pursued -- but every brick and mortar retailer could do something more interesting and creative than simple price matching. And the hospitality industry points the way.
Apple has just released earnings. The company reported quarterly revenues of $43.6 billion. Second quarter revenues in 2012 were $39.2 billion. Total 1H 2013 revenues were $98 billion.
There were better-than-expected iPhone and iPad sales in the quarter. Gross margins came in at 37.5%. This compared to 47.4% last year.
Now the device numbers:
On cheaper devices: There were lots of questions during the earnings call about Apple's competitive position and ability to compete in markets around the world. CEO Tim Cook repeated several times that an aggressively priced iPhone 4 is the crux of Apple's strategy to attract first time smartphone buyers in developing markets.
This is a product, however, that's two generations old. While Apple says it won't make "cheap products" it's very likely that Apple will develop a less expensive iPhone to compete in those markets where "first time buyers" can't afford the state-of-the-art iPhone.
On mobile payments: Tim Cook was asked about getting into mobile payments. Cook responded that the market was in its infancy, implying that Apple would be waiting to enter it in earnest (if at all).
On the prospect of a larger iPhone screen: One of the financial analysts asked about a larger iPhone display. Cook respondend, " The iPhone 5 has the absolute best display in the industry." However he acknowledges that "some customers" value screen size. He explained that larger displays require trade-offs in quality. He then said that the company won't ship a larger iPhone display "while these trade-offs exist." That in turn implies that a larger display may be on the iPhone 6 or a later model.
Mobile payments -- as in buying things in a retail store with a mobile device -- still appear to be years away. Two weeks ago the IAB and InMobi released survey data that showed a range of payment and financial-related activities in mobile.
The survey, conducted in Q1 this year with roughly 1,200 US adult respondents, showed that there were pockets of mobile-financial activity: people capturing coupons, buying digital content and paying selected bills via smartphones. But the road to in-store mobile payments adoption is much longer (say 3 years or more).
In contrast to other types of "mobile payments" and financial services, mobile banking has taken off more rapidly than financial institutions anticipated. However mobile banking is really a case of people accessing information via tablets and smartphones that they already get from a PC. There's essentially no new behavior here, with the exception of mobile deposits (not yet widely performed).
Are you aware of any mobile financial services features from your bank?
Source: IAB, InMobi (n=1,242 US adults)
Capturing and redeeming mobile coupons was the most popular financial-related activity among this pool of respondents (57%). There's no surprise in that finding; mobile coupons are hugely popular.
There's also a significant amount of mobile bill paying (probably credit-card bill paying) according to the survey (46%). Mobile phone bill payment is also popular (42%).
In terms of in-store/offline mobile payments, 34% of these respondents said they had conducted such a transaction. This number is probably higher than the "real" number if we were able to look at a nationally representative sample of mobile users. I suspect the number is much closer to 10% or 15% perhaps (unless everyone is talking about a loyalty app such as Starbucks).
Have you ever used your mobile phone to make a payment?
Source: IAB, InMobi (n=1,242 US adults)
It would also be useful to get some additional insight into what "Paid a business for real-world goods/services by mobile" actually means. Unfortunately the survey doesn't further unpack the finding. For example, is it PayPal usage; is it use of a credit being accepted or read by a Square dongle? Is it a loyalty app, as I suggest above?
Among financial-related apps, PayPal is easily the leader. (The company is now rolling out its in-store payments system through the Discover network.) In the chart below 37% of survey respondents said they had PayPal on their phones. The survey asks about "downloads" rather than active usage. Thus we don't know how often or whether people actually use these apps.
Downloads without more insight into active usage is an almost meaningless statistic.
Have you downloaded any of the following apps to help you make payments or keep track of your finances?
Source: IAB, InMobi (n=1,242 US adults)
Square, which is probably the only other mobile payments brand known by consumers, stands at 8% penetration. This of course is not Square the credit-car-reading smartphone dongle, but the "Pay with Square" app that permits a "contactless" payment where both sides have a Square account. (The "Paid a business for real-world goods/services by mobile" answer probably includes use of the Square dongle.)
Google Wallet seems completely stalled at 7%. The widespread availability of NFC in Android and Windows Phones is unlikely by itself to jump-start NFC payments in North America. However that could change if the iPhone 5S were to include the capability.
The data above present a picture of increasing, incremental usage of mobile financial services and "payments" by the US smartphone population. That will continue as more services adapt to mobile and consumers become increasingly comfortable with using their mobile phones for a range of transaction types.
However the much-anticipated day when everyone is carrying a digital wallet and using it to buy goods and services in the real-world is still much more hype than reality.
Late last month Yahoo acquired news app Summly for the underlying technology, developed by SRI. It was just the latest in a series of mobile startup acquisitions (mostly for talent) Yahoo has been making.
Today the company rolled out the fruits of the Summly acquisition: a new iOS (iPod Touch, iPhone) flagship app. This follows last week's release of Yahoo Mail for the iPad and a new Yahoo weather app.
The Yahoo blog, in a post by CEO Marissa Mayer, announced the new app this morning:
The new Yahoo! mobile app is also smarter, using Summly’s natural-language algorithms and machine learning to deliver quick story summaries. We acquired Summly less than a month ago, and we’re thrilled to introduce this game-changing technology in our first mobile application. And, with the immersive imagery of our virtually endless newsfeed, the new Yahoo! app has both great technology and beautiful design front and center. Because searching for great content is also core to the Yahoo! experience, we’ve also improved the search experience with better video and image search.
The app offers essentially two views of stories, a kind of list view with thumbnail images (top left) and a more immersive (Summly like) visual view of stories (top row right and below left):
Yahoo enables personalization of news content in the app. If you're signed in each story allows users to select "more" or "less" news about the topic (lower right images). That personalization will also be reflected in the stories presented on the Yahoo PC site. However personalization is far from obvious in the new app and its not clear how many people will notice let alone use it.
The "visual" dimension of the experience is not as engaging or successful as Yahoo's new weather app (images below). However it's quite a bit more challenging to duplicate the experience of the weather app with news content, whose stories and images are constantly changing. In addition the list view of news is kind of flat and uninteresting.
Yahoo is making good progress in updating and mobilizing its user experience under Marissa Mayer. Things are definitely on the right track. However with the new Yahoo flagship/news app it will probably take a few more "iterations" to get things right.
Nokia released Q1 earnings this morning. They were mixed. The company said that it sold 5.6 million Lumia handsets, which is up from 4.4 million in Q4 2012. Overall shipments of Nokia handsets were down more than 20% however. Sales also fell 20% YoY, to 5.9 billion EUR ($7.7 billion). As a consequence Nokia shares were down 12% this morning. The roughly 25% improvement in Lumia sales was encouraging but far from a turnaround. Nokia's lower-end device sales were down, offsetting the Lumia gains and depressing overall sales figures. Since turning to Windows Phone in 2011, Nokia has sold 19.9 million total units. While this isn't outright failure -- and there's growth projected -- Windows isn't going to save Nokia or make it competitive with Android and iOS (enough time has passed to draw that conclusion). Nokia will have to turn to Android to diversify in the near term. Nokia reported Lumia sales increases in all geographic regions except the US/North America. That's largely because Nokia's brand remains relatively strong in Europe and other places. However its brand is effectively dead in the North American market. Qarterly shipments of Lumia devices were down 33% vs. Q4 (400K vs. 700K) in North America. This not only reflects the weakness of the Nokia brand but equally the indifference of much of the US public to Windows Phones. Not only will Nokia have to aggressively discount it will need to develop new devices for the US market and may still fail (absent an Android strategy). During its Q1 earnings call Nokia was dismissive of Android. However if the company hopes to compete again in North America and indeed globally in the top tier of OEMs it will have to develop Android handsets beside Windows. In the US Windows Phones are driving less than 2% of mobile internet traffic; their US market share is roughly 3%.
Nokia released Q1 earnings this morning. They were mixed. The company said that it sold 5.6 million Lumia handsets, which is up from 4.4 million in Q4 2012. Overall shipments of Nokia handsets were down more than 20% however. Sales also fell 20% YoY, to 5.9 billion EUR ($7.7 billion). As a consequence Nokia shares were down 12% this morning.
The roughly 25% improvement in Lumia sales was encouraging but far from a turnaround. Nokia's lower-end device sales were down, offsetting the Lumia gains and depressing overall sales figures.
Since turning to Windows Phone in 2011, Nokia has sold 19.9 million total units. While this isn't outright failure -- and there's growth projected -- Windows isn't going to save Nokia or make it competitive with Android and iOS (enough time has passed to draw that conclusion). Nokia will have to turn to Android to diversify in the near term.
Nokia reported Lumia sales increases in all geographic regions except the US/North America. That's largely because Nokia's brand remains relatively strong in Europe and other places. However its brand is effectively dead in the North American market. Qarterly shipments of Lumia devices were down 33% vs. Q4 (400K vs. 700K) in North America.
This not only reflects the weakness of the Nokia brand but equally the indifference of much of the US public to Windows Phones. Not only will Nokia have to aggressively discount it will need to develop new devices for the US market and may still fail (absent an Android strategy).
During its Q1 earnings call Nokia was dismissive of Android. However if the company hopes to compete again in North America and indeed globally in the top tier of OEMs it will have to develop Android handsets beside Windows. In the US Windows Phones are driving less than 2% of mobile internet traffic; their US market share is roughly 3%.