Roughly three years ago Steve Jobs opined that search wasn't as central to the mobile user experience as it is on the PC. That sentiment elicited dismissals as naive or self-serving and was generally disputed. This is what Jobs said verbatim:
On the desktop search is where it’s at; that’s where the money is. But on a mobile device search hasn’t happened. Search is not where it’s at, people are not searching on a mobile device like they do on the desktop.
It turns out that when you consider what he actually said, Jobs was exactly right.
Various surveys have found that search is widely used on smartphones. But it's not used as often or as centrally as on the PC. Indeed, search is a more occasional or peripheral experience on smartphones (especially the iPhone), whereas people search many times daily on the PC.
Earlier today Consumer Intelligence Research Partners (CIRP) released survey data about most frequently used mobile apps among US smartphone owners. The survey measured frequency not reach. This is very important to understand about the data. The firm asked mobile users to identify their "three most frequently used [mobile] apps."
CIRP found that Facebook was the leading and most frequently used mobile app. That was followed by Twitter, Candy Crush and Instagram. The surprise is how low Google Search and Google Maps rank on the list.
Google Maps is #12 and Google (the search engine) is #10. We don't get an analysis of usage by platform (i.e., iOS vs. Android). However I suspect we'd see different rankings on the two platforms, with Google doing better among Android users given search's prominence on the Android OS.
It's unclear how large the sample in this survey was and so we can't tell how reliable these data are. In addition these are self-reported data and not behavioral or traffic data. People often report one thing and do something else.
Having said all that, these data strongly argue that what Jobs said is accurate: "People are not searching on a mobile device like they do on the desktop." Although this has been written about at length in the past, if accurate, this more modest mobile search frequency represents an obvious problem for Google as migration from PCs to tablets and smartphones continues.
Consistent with pre-Thanksgiving weekend surveys, mobile devices (at home and in the store) played a big role on "Black Friday" and will continue to do so throughout the holiday season. Among others, IBM released a trove of US e-commerce and traffic data for Thanksgiving and Black Friday weekend shopping.
Here's a snapshot of some of the IBM data:
Separately, e-commerce analytics provider Custora reported that "almost 40%" of online buying on Black Friday came through mobile devices. I'm quite skeptical about the accuracy of this figure; it seems inflated or drawn from too small a sample. IBM's mobile commerce figure is 22%, which is more plausible.
Below is the Custora breakdown of overall US Black Friday e-commerce sales by device category:
While comScore has argued in the past that smartphones are outpacing tablets in terms of mobile commerce -- which makes logical sense because there are many more smartphones -- I'm doubtful of such claims. IBM's figures seem more (directionally) accurate: tablets: 14.4%, smartphones: 7.2%.
Custora said the following about the distribution of mobile commerce by platform:
We could look at a bunch of other reports and try to determine a consensus about how much e-commerce actually took place via smartphones and tablets. What's more important is the recognition that mobile devices are being widely used by US consumers for shopping and product research, and that serious "m-commerce" is now starting to happen (especially on tablets).
Another interesting fact from the IBM data: "on average, retailers sent 37% more push notifications . . . during the two day period over Thanksgiving Day and Black Friday when compared to daily averages over the past two months." The company also said that retail app installs grew by 23% compared with daily averages over the preceding months.
Reportedly Wal-Mart will be offering the HP Mesquite 7” Tablet for $89 on Black Friday. This is a "3.5 star" tablet but should sell out, given the HP brand and the aggressive price.
There are dozens of sub-$150 and even a surprising number of sub-$100 tablets now available. Most of them are "no name" brands and thus may hold US consumers back. That's why the HP brand matters at this price point.
Many of the low-cost Android-based tablets will be bought by parents for kids this holiday season. But the flood Android tablets, of varying levels of quality, inevitably means that the iPad's market share, with its much higher price points, will decline. That doesn't mean that iPad users won't still generate most of the traffic. Currently the iPad is responsible for more than 80% of US tablet traffic.
The tablet race in the US is between Apple, Samsung, Google/ASUS and Amazon. A quick search on Amazon for tablets reveals page after page of inexpensive Android tablets.
It's not clear right now how these aggressively priced Android tablets will impact the market, beyond bringing more users into the tablet realm (to the likely detriment of PC replacement cycles). But will they cut into iPad sales? Perhaps at the margins. Someone buying the $89 HP tablet is probably not in the market for an iPad Air or Mini, however. Such low-cost Android tablets are more likely to impact other Android OEMs such as Samsung or Kindle (Amazon doesn't classify Kindle Fire as an Android OS device).
Amazon threw down the pricing gauntlet for tablets when it introduced the original Kindle Fire for $199. Now there's increasing price pressure on 7-inch tablets (other than Apple) to enter the market at $150 or less. If this HP tablet and similarly priced others prove to be successful that $150 price point may become "institutionalized" for 7-inch Android devices.
Profits be damned.
Last week ShopKick introduced "shopBeacon," which uses Bluetooth low energy (BLE) indoor positioning technology. The company is testing it with Macy's, which has also independently been using indoor location for some time (mainly leveraging WiFi) to enhance its in-store app experience for customers. (See ShopKick demo video.)
ShopKick's adoption of iBeacon is an important move to insert the company back into the in-store shopping conversation. It had been an early pioneer in mobile loyalty, seeking to help retailers drive consumers into stores. But as indoor location has gained momentum ShopKick has largely been on the sidelines -- until now.
ShopKick has a wide range of brands and national retail partners, including Target, BestBuy, Sports Authority and JCPenneys. The company seeks to serve retailers but also "own the customer relationship." Accordingly there's some tension between working with ShopKick and providing a direct indoor-location experience, as Macy's does through its app.
A less-well-known company seeking to do something very similar for retailers is Swirl. Swirl has both a consumer-facing multi-retailer app but also powers the indoor experience for retailer apps through an SDK. Timberland is the company's best-known partner. ShopKick is now also an indoor-location enabler with its shopBeacon BLE beacons.
Apple itself is going to implement iBeacon in its own stores. There are a range of obvious and secondary use cases, including providing enhanced product information and notifications about Genius Bar appointments. Beyond an improved in-store experience, Apple hopes to boost sales through iBeacon. The product can also be used to support in-store mobile payments (see, PayPal Beacon).
It's well established that a majority of consumers have used smartphones in store for research purposes and many are interested in indoor/in-store information. However recent research from ISACA suggests that retailers will need to be judicious about how they use in-store notifications and personalization and not become too "pushy" in trying to upsell and cross-sell consumers.
Another challenge of sorts for retailers with indoor location is the fact that majorities of smartphone shoppers use retailer mobile websites. Indoor-location features are much harder to deliver via websites. Smaller numbers of consumers use retailer apps. This makes sense because apps are typically downloaded and used by a store's most loyal customers, which represent a minority of overall store shoppers.
According to NPD survey data, 71% of smartphone owners access retail websites but only 57% use apps. Many of those apps fall into disuse shortly after they're downloaded. In addition, the survey found that a majority of smartphone shopping-related research was done at home and not on the go, suggesting "that engagement on their smartphone is more of an alternative for online shopping rather than a showrooming tool."
Accordingly in-store information directed at enhancing the customer experience is a way to make apps more relevant and engaging. But as the ISACA study indicates retailers (or mall and venue owners) will need to develop information, content and indoor experiences for customers that are informational and not merely about trying to sell things.
This is a complicated arena for retailers and would-be providers of indoor location and marketing. Experimentation and testing are necessary to determine what's going to "work" for consumers, vendors and venue owners. Macy's is very smart and to be applauded for "getting out in front" of the issue and trying things, notwithstanding the potential exposure to "indoor surveillance" criticisms.
One of the maddening things about the cult of iPhone news coverage is that immediately upon the release of this year's product the cycle of rumors and speculation begins about next year's product. So it was and is with the iPhone 5s.
Essentially the day after the iPhone 5s was announced the iPhone 6 rumors began. Part of that was fueled by disappointment about the iPhone 5s' current 4-inch screen and anticipation of a larger-screen in the iPhone 6 (or "Air" as it's now being called).
Indeed, one feature that most US -- perhaps all -- current and would-be iPhone buyers want from the device is a larger screen -- though longer battery life might be a close second. One of the primary ways that Android handsets have successfully competed with the iPhone is by offering larger and high-resolution displays.
Many iPhone owners now have what might be called "screen envy."
Yet Apple has set a very difficult task for itself. It wants to offer a larger screen on the next iPhone -- speculative reports have asserted that there are 4.7-inch and 5.5-inch models being tested -- but the company still prizes "one-handed control."
That would seem out of the question for a 5.5-inch device; but it might be possible with a 4.7-inch screen. It's difficult to imagine what a one-handed, 4.7-inche phone would look like.
Might it be even "taller" than the 5s, which lengthened but didn't proportionally widen the screen? Most larger-screen Android models (4.8-inch and above) can't be entirely operated by one hand. But they preserve proportionality, which in my view is lacking in the "tall" 5s.
The largest a smartphone screen can stretch before it becomes a "phablet" is about 5-inches. Apple's next phone needs to reach about 4.7 or 4.8 inches to be competitive; 4.5 won't cut it. And despite rumors of curved displays it's not clear how Apple is elegantly going to attain that objective and still make one handed control possible.
A provocative article in Mobile Marketer this morning discusses how the aesthetics and layout of retail spaces are changing to accommodate the mobile shopper. Here's a representative excerpt:
AT&T recently unveiled a new store format intended to reflect customers’ mobile lifestyle where café-style learning tables replace cash registers.
The store layout highlights products and services in three different thematic areas. In the Connected Experience, shoppers can see how solutions can be used in their everyday lives. The Community Zone features an open and interactive space where customers can test products. In the Explore Zone, there are digital monitors to highlight AT&T’s lineup.
This sort of "customer experience" was largely inspired by or modeled on Apple retail stores -- especially the replacement of cash registers with free-roving sales associates. However beyond improving the "flow" and "engagement" of retail spaces there are other considerations to be factored in.
The article doesn't at all discuss how data gathered from indoor analytics can help retailers do a better job with layout and usability of their stores. Indoor location data and usage patterns should be included in the "aesthetics" and layout discussions because they will lend empirical grounding to what is otherwise a relatively speculative discussion.
How do consumer actually behave in stores? How are they interacting with displays? These sorts of data are readily available and can inform the broader debate about how to reconfigure retail environments.
Another interesting angle here is how mobile payments will be affected by retail store redesign. My belief is that low-skilled and poorly paid store (and QSR) cashiers will be increasingly replaced by mobile payments and self-checkout kiosks.
Loyal store customers will increasingly have a mobile app with stored credit card information. That scenario will become increasingly prevalent in stores. For those customers without a retail/payment app, Apple-style mobile in-store checkout will prevail.
Google updated its iOS search app today for both the iPhone and iPad. The new app brings some additional functionality to Google Now, which is embedded within the app:
The update also enables hands-free voice searching through the trigger/wake-up word "OK Google." This capability started on Google Glass and has migrated onto Android handsets such as the Motorola Moto X and LG Nexus 5. It's now available to iPhone 4S and above users.
New Google Now cards include:
The combination of voice search and Google Now has turned "Google Search" into the "Google Assistant," without being rebranded as such. The combined Google capabilities rival Siri and arguably exceed it in some respects.
On iOS hands-free voice searching (OK Google) isn't as readily available as on Android. Users must first launch or open the Google Search app, which can be done with Siri, ironically. Then the hands-free searching can be initiated. That sort of defeats the point. On Android handsets voice search is immediately available on the home page.
While probably no single feature launched today will generate massively more Google searches from iOS devices, collectively they may bring more user engagement.
The new hands free search capability may have the biggest impact on the iPad. While users could perviously perform voice queries from Google's iPad app in the past, this new purely speech activated feature may generate more searches for Google from Apple's tablets -- which drive about 80% of all US tablet traffic.
Microsoft will reportedly spend north of $400 million this holiday season on marketing in the hope of selling 16 million Surface tablets. It will likely have trouble because the Surface Pro tablet is neither a true PC replacement nor does it offer as good a tablet experience as the iPad.
Surface Pro 2 also starts at $899, making it considerably more expensive than the entry level iPads and even many Windows PCs. The argument in favor of Surface Pro is that it has Office and offers greater productivity than the iPad. However it's not clear that consumers are seeking a unified device for all their computing needs.
According to data from app marketing platform Fiksu, the iPad Air had a powerhouse opening weekend. The device "is seeing five times the usage the iPad 4 did two days after launch - and more than 3 times that of the iPad mini," explains Fiksu.
Stellar reviews and early momentum indicate the iPad Air may have a very good Q4. The new iPad Mini "Retina" launches later this month, which could either divert some iPad Air sales or simply generate more tablet "shelf space" for Apple. That would be potentially bad news for Microsoft, which is competing directly with the iPad.
On the Android side in the US market it's really Kindle vs. Nexus 7 (Samsung has more of a presence in Europe). Between the two Kindle has the stronger brand and greater distribution through Amazon. But the Nexus 7 is probably the better device overall. In the 9 - 10 inch category the Air really doesn't have any competition from an Android tablet.
In order to see more than token sales, Microsoft will have to truly make the Surface Pro (RT is RIP) a laptop replacement, with a longer battery life and better typing experience. Surface Pro 2 is not that device; so we'll need to wait for Surface Pro 3. That won't be out until next year -- if then.
That means Microsoft, no matter how much it spends on marketing for the holidays, is unlikely to meet its ambitious sales goals for Surface. That is, unless it starts cutting prices very aggressively, with a capital "V."
The Future of Privacy Forum's Jules Polonetsky was one of the featured speakers at the inaugural Place Conference. He spoke about indoor location and privacy with Jennifer King from UC Berkeley. We alloted 30 minutes for the discussion but could have easily spent an hour on it.
Privacy is the 800 pound gorilla of indoor location and the issue that challenges and potentially threatens its roll out. Ever since the negative publicity and coverage suffered by Nordstrom retailers have been scared to death of talking about what they're doing with indoor location -- despite the fact that consumers stand to benefit greatly through these innovations.
Hoping to head off regulatory intervention and preempt more ill-informed coverage and negative publicity, Polonetsky's Future of Privacy Forum (and Senator Charles Schumer of New York) announced a code of conduct that will govern indoor analytics and seek to protect consumer privacy.
The companies involved include Euclid Analytics, iInside, Mexia Interactive, Nomi, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions. Euclide and iInside spoke at the Place Conference.
This list doesn't include all the companies involved in indoor analytics (e.g., Retail Next) but the rest will adopt and abide by the rules announced today. And retailers will follow them. Basically the new rules require clear disclosures, enable consumers to opt-out of indoor tracking, make any tracking anonymous and prevent the misuse of information gained by venue owners.
People always forget that much more intrusive closed-circuit video cameras have been in retail environments for more than a generation.
As our panel on indoor analytics pointed out most of the data aggregated and anonymously captured by retailers will translate into in-store improvements, from staffing to store layouts. However consumers need to be educated about all of this given how new and little understood it is. This is where retailers need to step up (rather than cower) and help consumers understand why and how indoor location will benefit them.
Hopefully this new code of conduct will enable them do that with confidence.
Below is the full text of the press release:
New York, NY – U.S. Senator Charles E. Schumer, The Future of Privacy Forum (FPF) and a group of leading location analytics companies – including Euclid, iInside (a WirelessWERX company), Mexia Interactive, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions – today announced that they have agreed to a Code of Conduct to promote consumer privacy and responsible data use for retail location analytics. The companies responded to privacy concerns raised by Senator Schumer and the FPF about the use of this new technology. The code of conduct includes in-store posted signs that alert shoppers that tracking technology is being used, and instructions for how to opt out.
“This is a significant step forward in the quest for consumer privacy,” said Schumer. “This agreement shows that technology companies, retailers, and consumer advocates can work together in the best interest of the consumer. There is still much more work to be done and I will continue to push for privacy rights to be respected and strengthened, but this represents real progress and I thank the Future Privacy Forum and these tech companies for their hard work hammering out this agreement.
“Today, location analytics companies have introduced a comprehensive code to ensure they have data protection standards in place to de-identify data, to provide consumers with effective choices to not be tracked and to explain to consumers the purposes for which data is being used,” said Jules Polonetsky, executive Director of the Future of Privacy Forum. “These standards ensure that consumers understand the benefit of the bargain and have choices about how their information is used while allowing technology to continue to improve the shopping experience. As we quickly approach the holiday shopping season, this is not only the right move – but a timely one as well, adding a layer of trust, choice and transparency onto a shopping experience that in 2013 is more mobile and hi-tech than ever before.”
In July, Schumer warned that major national retail chains were testing technology that would allow them to automatically track shoppers’ location through stores. Following this warning, FPF worked with the technology companies to develop a Code to ensure that appropriate privacy controls are in place as retailers seek to improve the consumer shopping experience. These technology companies use mobile device Wi-Fi or Bluetooth MAC addresses to develop aggregate reports for retailers.
The Code puts guidelines in place to create best data practices that will provide transparency and choice for consumers. The Code calls for the display of conspicuous signage by retailers and for a central opt-out site for consumers.
"We are just beginning to see the possibilities that in-store analytics can bring to shoppers and to retailers, and yet, as with any new technology, there is the chance for confusion about the intent and possible implications of such technology,” said Steve Jeffery, CEO, Brickstream. “We applaud the Future of Privacy Forum for taking the lead in bringing retailers and technology providers together to address these important issues.”
“We would like to thank Senator Schumer for his leadership on this issue,” said Will Smith, CEO, Euclid. "Privacy has always been a priority as we've designed and built our services, and we have been working diligently with FPF to release best practices for the retail analytics industry as a whole.”
"iInside and industry partners have made it a top priority to assure that consumers are well-informed and their personal privacy and identity are protected. The newly announced code is a major step forward in establishing and communicating clear and concise standards across our industry," said Jim Riesenbach, CEO, iInside Inc.
“The release of a Code of Conduct to guide industry practice ensures that businesses and retailers are able to enhance their customers’ experience without compromising their privacy,” said Glenn Tinley, President & Founder, Mexia Interactive. “Business and consumers also can be assured that a company listed on the SmartStorePrivacy.com website has committed to following the code.”
"Proximity and location technology is evolving rapidly, and we want to make sure it’s deployed in an open, responsible and trustworthy manner. The retail location analytics Code of Conduct is a solid step in the right direction," said Marc Wallace, Co-Founder & CEO, Radius Networks, Inc.
“SOLOMO sees privacy as an opportunity for retailers to build trust with customers,” said Liz Eversoll, CEO, SOLOMO. “We’ve collaborated to develop the Code of Conduct to ensure transparency and empowerment for retail customers. Indoor location technology will offer customers new in-store experiences, special deals, and localized services as retailers introduce it in their stores. Everyone wins.”“Turnstyle Solutions is pleased to partner with the Future Privacy Forum in the development of this Code of Conduct. We are confident the code lays the foundation necessary to protect sensitive consumer information, while offering retailers and consumers services that enhance their shopping experience," said Devon Wright, Co-Founder, Turnstyle Solutions.
Digital marketing platform Monetate recently tested whether a site offering the option to buy through PayPal saw any conversion lift vs. not offering PayPal. Using A/B testing and data from a single client the company said there was a modest roughly 1% sales lift by offering PayPal:
Adding this simple reassurance to product detail pages not only lifted average order value by 1.03%, but it also reduced cart abandonment by 1.21%. Not a huge lift, but not shabby either . . .
We recently asked 1,250 US adults which entities they trusted most to handle mobile payments. The following was the order of results:
Square and Facebook were not on the list of choices. However Facebook is testing its own mobile payments service with some consumers and retailers (stored credit card and details).
As the survey data above indicate PayPal is in a very strong position to become the dominant mobile payments company (especially after its Braintree acquisition) if it can establish and reinforce its brand and user experience as being the simplest and most secure.
Apple could quickly enter the mobile payments arena; however so far it has held back. And while Amazon has a presence in mobile payments it's not particularly strong or developed.
Google, for its part, has failed to establish Wallet among consumers. Square is in a decent position but it doesn't have the reach that PayPal currently has. Facebook has massive reach but is not going to be trusted with payments by most consumers without a Herculean education and marketing effort.
So currently it's PayPal's market to lose really, as mobile payments take hold.
According to a report (rumor) in Engadget, Google is preparing to build an incentive-based mobile panel to track browsing and app usage behavior. The initiative is called "mobile meter" according to the blog and it would be directed toward iPhone and Android users.
Google would offer some incentive (points, rewards, etc) to motivate users to opt-in and allow their usage to be anonymously tracked. This would be nearly identical to the system currently used by Nielsen.
In addition Placed uses a panel to track mobile and exposures and their impact on store visits. The Placed app (with opt-in consent) watches where users go in the real world and extrapolates their data to estimate the offline impact of mobile campaigns.
Google recently announced Estimated Total Conversions that will track the impact of search ads across devices and, eventually, into stores. The primary methodology relies on signed-in Chrome browser users.
A Google mobile panel would complement that approach and, like Placed's panel, provide data to advertisers -- offering a more holistic view of their campaigns, especially the impact on offline store visits.
In the frenzy of speculation leading up to Apple's iPhone announcement last month, there was lots of discussion of smartwatches. Apple supposedly was developing an "iWatch" and would be announcing it along with the new handsets. Samsung, wanting to beat Apple to market, rushed out its Galaxy Gear watch, which has met with scathing reviews as an "unfinished product."
Google was also rumored to be working on a smartwatch. The 9to5 Google site has some additional information on the potential release of a Google smartwatch at the end of this month: "Details are slim but the person seemed to think that Google Now functionality would be at the center of the product."
The idea is that Google would take its technology and learning (thus far) from Google Glass and put that in a watch. The emphasis on Google Now is interesting and appropriate -- the watch as a kind of notifications center. Samsung tried to cram too much half-baked functionality into Galaxy Gear.
There's considerable consumer interest in smartwatches (much more than Google Glass). Just over 40% of survey respondents in a recent survey we conducted (n=1,024 US smartphone owners) said they were interested in a smartwatch. Not surprisingly respondents were most interested in smartwatches that were made by the same maker as their current smartphones.
The right mix of features and pricing are key here. Undoubtedly Apple will develop an "iWatch." And Google, as the rumor suggests, will probably roll out a watch itself, given its new commitment to "wearables." But these initial products may not get the mix right: simplicity, aesthetics, functionality and cost.
The optimal price is probably $99 to $199. But $299 would be OK if the watch were a great product. At $299 and above, the Galaxy Gear is simply to flawed and too expensive for what it delivers. Now we'll see what Google can come up with.
Place 2013 brought together the entire spectrum of companies building the indoor location ecosystem. Retailers, technology vendors, mobile developers, data providers, advertisers, agencies, and investors attended this unique, one-day event at the Palace Hotel in San Francisco and was the first-of-its-kind anywhere.
8:45 AM - 9:00 AM
The Consumer Foundations of Place-Based Marketing - The majority of smartphone owners are already using their devices in stores to find product and price information, as well as coupons. Opus Research will present proprietary findings on in-store behavior, privacy attitudes and consumer receptiveness to indoor promotions.
Speaker: Greg Sterling, Senior Analyst, Opus Research
View slides from this presentation
9:00 AM - 9:45 AM
The State of Indoor Location - For the past several years online mapping giants and technology providers have been laying the groundwork for indoor location. What is the current state of the infrastructure? What technologies are already deployed and how accurate are they? What indoor consumer and advertiser scenarios are possible today and what might be possible within three years?
Joseph Leigh, Head of Venue Maps, Nokia
Leslie Presutti, Mobile, Location and Computing Business Unit, Qualcomm Atheros
Zack Sterngold, VP of Americas, Boingo Wireless
Avinash Joshi, Chief Technologist, Wireless LAN Group, Motorola Solutions
9:45 AM - 10:25 AM
Keynote: Why Indoor Location Will Be Bigger than GPS or Maps - The explosion of smartphones with built-in sensors, accelerometers, GPS and WiFi is making indoor positioning not only possible but also inevitable. The emerging indoor opportunity for venue owners, retailers and technology providers is potentially massive. Google’s Don Dodge, an investor and close observer of the space, will explain why he believes indoor location and marketing is going to be huge and potentially larger than GPS and maps.
Speaker: Don Dodge, Developer Advocate, Google
10:45 AM - 11:05 AM
Case Study: Point Inside - Point Inside was one of the early consumer-facing apps in the indoor location space. The company has since shifted its focus to enterprises and enabling retailers to take advantage of indoor location. The company will present a new case study featuring a major home-improvement retailer.
Speaker:Todd Sherman, Chief Marketing Officer, Point Inside
View slides from this presentation
11:05 AM - 11:30 AM
Featured Case Study: Forest City and Path Intelligence - Forest City Enterprises are many years into using mobile device monitoring and advanced indoor analytics to help create a better environment for their shoppers and their retailers. Hear from the project sponsor and partner Path Intelligence on how they have transformed asset management, leasing, and marketing.
Stephanie Shriver-Engdahl, VP, Digital Strategy, Forest City
Cyrus Gilbert-Rolfe, VP, Path Intelligence
View slides from this presentation
11:30 AM - 12:15 PM
Digital Analytics for the Real World - Using a variety of technologies to identify when and where smartphone shoppers are in stores, retailers can now leverage "big data" previously reserved for Internet companies alone. These "real world analytics" hold profound implications for everything from in-store merchandising and staffing to consumer marketing. Leaders in the segment will offer views on opportunities and potential pitfalls for indoor analytics.
Jon Rosen, Executive Vice President, iInside
Will Smith, CEO, Euclid
Alexei Agratchev, Co-Founder, RetailNext
Michael Healander, General Manager, GISi Indoors
1:15 PM - 1:55 PM
Retail Spotlight: Aisle411 & Dick's Sporting Goods - Aisle411 will discuss current retail deployments and their impact on operations, consumer loyalty and marketing. Dick’s Sporting Goods will share how it’s thinking about indoor location, privacy issues and the overall opportunity. And Bob Rosenblatt, former COO of Tommy Hilfiger Group, will outline the intriguing business opportunities for retailers in develop- ing indoor marketing strategies.
Nathan Pettyjohn, Founder & CEO, aisle411
Rafeh Massod, VP, Customer Innovation Technology, Dick's Sporting Goods
Bob Rosenblatt, CEO, Rosenblatt Consulting
View slides from this session
1:55 PM - 2:15 PM
Using Store Visits and Data for Advanced Retail Intelligence - Online to offline has been the dominant but largely invisible paradigm of Internet-driven spending. Using mobile to better target and influence store visits is only the beginning. PlaceIQ CEO Duncan McCall will offer a major retail case study fo- cused on measuring store visits after mobile ad exposures. He will also discuss how to connect online, nearby and indoors for a more complete picture of the customer journey.
Speaker:Duncan McCall, Co-Founder & CEO, PlaceIQ
View slides from this presentation
2:15 PM - 3:00 PM
Ad-Tracking to the Point of Sale - Panelists will discuss the current and future use of indoor location as a way to demonstrate ROI and sales lift on a per- campaign basis. What is the current state of the art in matching store visits to ad exposures? And what are the broader implications of connecting online ads and offline data?
Monica Ho, Vice President of Marketing, xAd
David Shim, Founder & CEO, Placed
Ameet Ranadive, Director of Product, Twitter Ads Team
Michael Shevach, SVP Ad Solutions, Retailigence
Duncan McCall, Co-Founder & CEO, PlaceIQ (moderator)
3:20 PM - 3:50 PM
Opt-in or Opt-out: Indoor Location & Consumer Privacy - Indoor location has already gained the attention of members of Congress and been called "troubling." While not everyone agrees about the level of concern, there are obvious consumer privacy issues raised by in-venue smartphone tracking. How should the companies be addressing these issues today and what might regulation require tomorrow?
Jennifer King, School of Information, UC Berkeley
Jules Polonetsky, Executive Director & Co-chairman, Future of Privacy Forum
3:50 PM - 4:10 PM
Case Study: Meridian/Aruba Networks - Meridian, who was recently acquired by Aruba Networks, will offer two indoor case studies, one involving a small business (Powell’s Books in Portland) and another involving a major U.S. apparel and housewares retailer.
Speaker: Jeff Hardison, Vice President, Meridian
View slides from this presentation
4:10 PM - 4:55 PM
Microfencing: Targeting In-Aisle Shoppers - Billions of dollars are spent each year by brands and manufacturers trying to influence consumer buying in stores. A percentage of that money will migrate to indoor digital marketing. What conditions must first exist and what will those brand-consumer interactions look like? The panel will explore these questions as well as the contours of the broader indoor marketing experience.
Neg Norton, President, Local Search Association Ben Smith, CEO, Wanderful Media
Melissa Tait, VP of Technology, Primacy
Erik McMillan, CEO, BrickTrends
Asif Khan, Founder, Location Based Marketing Association (moderator)
4:55 PM - 5:30 PM
Reality Check: Assessing the Indoor Opportunity - The other sessions explored major opportunities (and challenges) of indoor location and marketing. Now it’s time for a fun, yet sober assessment of whether and how soon these scenarios will come to pass. Is there real demand and who will own the “indoor channel”? Where will the "place-based market" be next year, in three years?
Jeremy Lockhorn,VP, Emerging Media, Razorfish
John Gardner, Partner, Nokia Growth Partners
Chandu Thota, Engineering, Google
Wibe Wagemans, IndoorAtlas
Yesterday comScore released its US smartphone market share report for August. The interesting thing is that these data do not reflect the release of the iPhone 5s and 5c. Apple was the single most popular handset maker, with just under 41 percent of the market. Samsung was second with 23 percent.
In terms of operating system share, Microsoft gained 0.2 points while Android lost 0.8 points. The iPhone saw a 1.5 percent gain. It certainly will be interesting to see what the September numbers are, post iPhone 5s.
In the aggregate Android devices represent just over half the smartphone market in the US (now 64% of mobile users). However it appears that may be the ceiling for Android -- at least for the time being.
Depsite this it appears from comScore's data that Google has achieved nearly 100% (92%) smartphone reach in the US through a combination of apps and mobile search usage, though Facebook remains the top individual mobile app:
According to research conducted by investment bank Canaccord Genuity the iPhone 5s was the top selling mobile handset at each of the four major US carriers in September, with the 5c taking second place at AT&T and Sprint and third place at Verizon.
Notwithstanding its second place finish, the 5c is quite a bit less popular than the 5s. Hitwise (Experian) reported that search queries for the iPhone 5s were 4X more than the 5c in early September.
This basically mirrors our survey finding correctly predicting the enormous popularity of the 5s and lesser interest in the 5c:
Source: Opus Research, n=1,508 US adults (Sept 16 - 19 2013)
Elecontrics retailer Best Buy is offering a $50 instant discount on the 5c, which effectively cuts its contract-subsidized price to $50 for the entry level device. Wal-Mart by the same token has cut the 5c's price to $45 "permanently." This should help boost sales of the 5c considerably in the short term.
Arguably the most interesting thing about the new Kindle Fire "HDX" tablets is the so-called "Mayday" button. By pressing a single button HDX owners will see a live human appear in a pop-up window on their screens, as the picture to the right illustrates.
That individual can answer questions and perform diagnostic functions or fixes remotely. And while Amazon Kindle users can see the agent, the customer support person cannot see the Kindle owner (thereby preventing certain unseemly "chatroulette scenarios"). Amazon says most questions or issues are or can be resolved in relatively little time. Live support is free/included and available "24x7, 365 days a year."
One review of the HDX questioned how scalable this service is. I suspect it's pretty scalable, especially if they offshore the support centers. But given that one can see the person on the other end of the line, offshoring may be less viable for something like this. In his post on the Opus Research Web site, my colleague Dan Miller sees the potential for a speech-enabled, automated personal virtual assistant to populate the agent screen.
My hunch is that Mayday will become a premium service or included with a Prime subscription ultimately.
What's more interesting to consider is how Mayday might become a new model for customer service and/or sales support for tablet and mobile apps. Think about how much more e-commerce and conversions might happen if live support were available. In a mobile context "chat" doesn't really cut it.
There are various in-between scenarios possible too, where a static image might be used instead of video together with a VoIP call. That would be the "low rent" version but it could be equally effective if executed properly.
The success of Mayday and its emulation or replication by others would be a new spin on and give new meaning to the notion of the "personal virtual assistant."
When Amazon introduced its original color tablet the Kindle Fire its chief innovations were aggressive pricing ($199) and the fact that the company used a "forked" version of Android that declared its independence from Google. There have since been two updates to the line (including yesterday's), which now includes four color tablets.
Yesterday Amazon CEO Jeff Bezos introduced refreshed Kindle hardware and software. There's a new "operating system," called Mojito (based on Android Jelly Bean). There are essentially two new tablets: Kindle Fire HDX (as in "beyond HD") in 7 and 8.9 inch versions. The Kindle Fire HD (7 inch) has been dropped to $139, which is sure to be the biggest seller, though it's effectively last year's model. There's also a clever new cover/stand called Origami.
The big software innovation is "Mayday," which is live video tech support on the tablet screen. Here's how Amazon describes it:
Kindle Fire HDX also introduces the revolutionary new "Mayday" button. With a single tap, an Amazon expert will appear on your Fire HDX and can co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you—whatever works best. Mayday is available 24x7, 365 days a year, and it's free.
As a practical matter Mayday is mostly a marketing gimmick, which probably won't see a great deal of actual use but will give some confidence to older and less tech-savvy buyers. What's more interesting to consider is the degree to which Mayday may be emulated by other industries (e.g., travel, shopping) for customer care purposes. That will be fascinating to watch.
North American Non-iPad Traffic Share
Source: Chitika, September 2013 (North American Android tablet traffic share)
Currently in North America the iPad controls about 84% of tablet-based web traffic according to Chitika. The remaining 16% is mostly Android tablets and really a battle between Amazon, Samsung and Google (in order of market share). The $139 price point on the Kindle Fire HD will capture buyer attention and may put pressure on Samsung and Google.
When Google introduced its new Nexus 7 earlier this year the company raised the price from $199 to $229 for the entry level model. The price increase was justified on the basis of new specs and a higher resolution screen. Amazon's Kindle Fire HD is almost $100 cheaper at $139. Without ads it's $154. The Nexus 7 is a superior device (to the Kindle Fire HD) but many people will not see a difference and opt for the much cheaper Kindle.
The Samsung Galaxy Tab 3 is $199. Accordingly it will be very challenging for Google, Amazon or anyone to sell many smaller tablets at much above a low $200 price point. Whether the iPad Mini feels similar pricing or sales pressure is a question that remains to be answered. However I suspect iPad Mini sales will only be affected at the margins.
According to the Wall Street Journal, "PayPal is near a deal to buy Braintree Payments Solutions." Braintree has had great success as a payments platform and processor both for e-commerce and in mobile.
Braintree is behind payment processing for companies such as Uber, AirBnB, LivingSocial and OpenTable among others. The company has roughly 4,000 customers according to the WSJ piece.
Braintree processes roughly $12 billion in payments annually, about $4 billion of which come from mobile commerce transactions. PayPal, by contrast said that it would process roughly $20 billion in mobile payments in 2013.
The deal would help further accelerate PayPal's mobile business. PayPal would also acquire Venmo, a P2P payments aoo, that Braintree bought in 2012 for just over $26 million.
Among mobile wallet/payments companies PayPal is far and away the best-known brand, though US consumers still show relatively little interest in generic "mobile wallets," according to our survey data.
Google Wallet has largely failed to date and other "mobile wallets" and mobile payments providers are almost totally unknown to the public. This deal would help cement PayPal's leadership in mobile payments.
Recently PayPal introduced Beacon, a Bluetooth low energy (BLE) in-store payments and indoor-location solution that is helping, together with Apple, show NFC the door in North America.
Today 91% of American adults own mobile phones according to new data from The Pew Research Center. More than 61% (64% per Nielsen) own smartphones. In this latest survey Pew takes a look at common activities on mobile devices (including non-smartphones).
Pew found that 81% of mobile phone owners text, the most common activity, while 60% access the internet. Just under half (49%) use maps or access location-based information on their handsets. All these percentages are higher if non-smartphones are excluded.
There are approximately 250 million US adults today. If 91% own mobile phones that means about 228 million adults in real numbers. Of that group about 146 million own smartphones (per Nielsen's 64%). If kids and teens are added in we easily have in excess of 150 million smartphones in the US market.
If 60% of adult mobile phone owners in the US access the internet that would be roughly 137 million people (not counting teens and kids).
Among the 60% going online from their mobile handsets (not including tablets) Pew says the following:
African-Americans and Hispanics are more likely to do so than whites. Younger adults, those with at least some college education, and those with an annual household income of over $75,000 a year are particularly likely to access the internet via cell phone. Those who live in rural areas are less likely than urban or suburbanites to have mobile internet access. Among those who use the internet or email on their phones, more than a third (34%) say that they mostly access the internet from their phone.
A recent Nielsen study found that 46% of US survey respondents relied exclusively on smartphones or tablets in conducting online research across a range of categories (i.e., retail, banking, gas and convenience). That same study found that, in the banking category, more than 50% of smartphone and tablet users did not use a PC to make purchase decisions (e.g., about credit cards).
What we're thus seeing is the emergence of a "mobile first" population in the US, which may be 50 million people on the low end and 75 million on the high end.
As I wrote last week the advent of iBeacon and bluetooth low energy may effectively mean that NFC as an in-store mobile payments standard in the US market is dead. Google Wallet had placed a big bet on NFC payments but has been thwarted in its bid for adoption by two principal factors:
Google Wallet 1.0 thus was a failure. Google is now out with a new Android version (and soon iOS) is making a renewed bid for consumer adoption with a range of new features and a partial move away from NFC. In-store payments still depend on NFC and so won't be happening at scale any time soon for the same reasons cited above.
However the new features add utility and breadth to the user experience. Here's what's new:
Exactly a year ago we surveyed 1,501 US adults and found the vast majority were not interested in the idea of mobile wallets: 71% said "I'm not at all interested . . . in using [my] mobile phone to pay for things and replace cash or credit cards." Another 15% said they had only "limited interest." Only 14% had some interest or significant interest.
In specific contexts, where consumers see the tangible benefits of mobile wallets, these numbers change. But in the abstract the public remains largely uninterested in mobile wallets.
Last week news broke than McDonald's is considering rolling out mobile payments. Currently the McDonald's app is primarily a store locator. The app also offers nutrition information.
According to a Bloomberg report, the company has been testing mobile payments in Salt Lake City, Utah and in Austin, Texas. McDonald's has roughly 14,000 US stores and 35,000 globally.
Mobile payments would allow McDonald's patrons to pre-order meals online and then pick them up at the drive-thru window. Other fast-food chains have tested, are testing or now using mobile ordering/payments. The McDonald's app will also feature deals and rewards according to Bloomberg.
A mobile ordering/payments capability may also help McDonald's attract younger users and Millennials, who are less inclined than others to visit the QSR chain. According to an AdAge write-up of an NPD Group survey:
Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic.
But hamburger chains have seen a 16% decline in traffic from Millennials since 2007, NPD said. In the year ended November 2012, Millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by Millennials in the same time period.
Ultimately all QSR chains will offer mobile ordering/payments. And that will help acclimate a generation to using their smartphones as wallets to pay for things.
Once people are familiar and comfortable with mobile payments in a specific context (e.g., ordering food) they will be more inclined to embrace them in other scenarios.