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The Big Mobile Shopping Handbook

Contents
Introduction 4 1 Mobile advertising driving shopping 6

2 Payments 22 3 Mobile in-store 36 4 5 Building for mobile shopping Future of mobile shopping 44 56

Introduction
Consumers have never been more in control of their shopping experiences, and are increasingly demanding more out of their favourite retail outlets. The question is, are retailers doing enough to stay ahead of consumers expectations?
The volume of mCommerce has steadily increased over the past few years, which is hardly surprising when you consider that 1/3 of all UK page views now come from a connected device1. The retail industry is making some strides in the mobile space. In the full year 2012 IAB/PWC Digital Adspend Study, it was the third biggest spender on mobile display advertising. Alongside this, mobile device sales accounted for 12% of the 62.4bn spent with online retailers in 20122. In July 2013, the IAB conducted the Mobile Retail Audit which looked at the mobile presence of the top 50 UK retailers. The study found that 74% of retailers had a mobile optimised site, however only 8% had a tailored tablet experience. When you consider this figure alongside a statistic from a piece of research the IAB conducted in 2012 which found that people are, on average, spending 4.4 hours a week shopping on their tablet devices, there is a disconnect between the two3.

74%

8%

2%

Mobile Optimised Site


Source: IAB Mobile Retail Audit, Base: Top 50 UK retailers

Tablet Optimised Site

Responsive Web Design

by Mike Reynolds IAB UK

Since the introduction of the smartphone, shopping has become a completely different experience, not only from a purchasing perspective, but also from a searching point of view. Mobile search offers such a unique way of communicating with your audience, especially in retail where location plays such an important role for the consumer. The Mobile Retail Audit found that 48% of retailers were optimising their campaigns for mobile, however only 18% were taking advantage of the extra ad extensions, such as click to call and get directions, that mobile now allows you to offer your customers. Some companies have truly embraced the mobile movement, and are now seeing the rewards of their early adopter approach. One of those companies is eBay, which has set the tone for retailers around the world. In fact, eBay now sees one third of every transaction involving a mobile, and are predicting 13bn worth of sales on mobile in 2013! eBay is a great example of a company that understands the importance of using the mobile channel to enhance customer relationships and offer them unique experiences and opportunities that other channels cant provide. The IAB is committed to making mobile easier for brands and agencies to tap into this growing market. The Big Mobile Shopping Handbook aims to give practical advice when integrating mobile into a brands digital strategy. With this in mind, the chapters have been written by industry experts that are at the forefront of mobile innovation.

We hope this gives you everything you need to know about mobile shopping, but of course new information is released all the time. Please be sure to keep an eye on our website www.iabuk.net for the latest research, news and market information.

1 Comscore 2 Survey by IMRG CapGemini 3 IAB Mobile and the Online Journey 2012

1
Mobile advertising driving shopping
1.1 Mobile display driving shopping 1.2 Proximity marketing driving shopping 1.3 Tracking to maximise your media spends and maximise ROI for mcommerce 1.4 Mobile affiliates driving purchase

1.1 Mobile display driving shopping


Mobile has fundamentally changed the retail industry. Consumers are now spending more time engaging with retail content on mobile devices than on the desktop1, and smartphones and tablets have emerged as both a vital part of the in-store shopping experience, and a direct channel to drive purchases.
As advertisers increasingly turn to mobile to drive consumers to shop, we have two main pieces of advice that we like to pass along to our partners in the space:

2
Utilise the aspects of mobile that make it unique

1
Understand the role mobile plays in the shopping process

1 ComScore MobiLens

by Gavin Stirrat Managing Director EMEA, Millennial Media

Understand the role mobile plays in the shopping process


Millennial Media is the leading independent mobile advertising platform company. Our technology, tools and services help app developers and mobile website publishers to maximize their advertising revenue, acquire users for their apps and gain insight about their users. We offer advertisers significant audience reach, sophisticated targeting capabilities and the ability to deliver rich and engaging ad experiences to consumers on their mobile connected devices. When a consumer is in-store, there are countless reasons why they may turn to their mobile device. These include comparing prices, finding coupons, researching features, asking the opinion of friends and family, taking pictures of a product and much more. As brands look to engage consumers in situations like this, it is critical to think about the different use cases, understand which actions the campaign may want to encourage, and then set up the creative and targeting accordingly. Brands should also think about the time of day they want their campaign to run, and how this will affect the way consumers interact with the ad. The primetime for tablet shopping is 9pm, which essentially extends the traditional shopping hours for many brands. If an advertiser is looking to set up a campaign with the primary goal of driving purchases, day-parting the campaign and targeting tablets can be a great way to do this. Finally, brands should understand what types of items are actually being purchased on mobile devices. We found that clothing or accessories, tickets and books were the three most popular categories, yet consumers were buying everything from flowers to car rentals. With that said, certain verticals may wish to avoid directly focusing on mCommerce and instead aim for higher funnel goals like awareness or consideration, which still play a crucial role in the overall shopping experience.

Types of goods or services purchased on mobile devices


Clothing or Accessories 24% 24% 23% 29% 22% 20% 21% 22% 21% 23% 19% 20% 15% 19% 13% 14% 11% 10% 10% 9% 9% 15% 8% 13% 4% 9%
Source: ComScore MobiLens and TabLens, March 2013

39% 54%

Tickets

Books (not E-books)

Meals (Delivery or Pickup) Consumer Electronics/ Household Appliances Daily Deals or Discount Coupons Personal Care/ Hygiene Products Gift Certificates

Smartphone Tablet Retail

Groceries

Sports/Fitness Equipment

Flowers

Hotel Accommodations

Airplane Tickets

Car Rental

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Utilise the aspects of mobile that make it unique


Mobile is not online, and trying to treat the two channels the same way is not the most effective use of media spend. In fact, part of what makes the opportunity in mobile so exciting is precisely that it is different to online. For example, think about store locators: Whilst eCommerce and mCommerce have emerged as viable shopping options, many advertisers still feel that their best chance to close a sale is to get people into a bricks-and-mortar location. With mobile, brands can insert a store locator that leverages the GPS inside a phone or tablet to immediately tell a consumer where their nearest location is, no matter where they may be (along with directions to get there!). A great example of a campaign where the advertiser understood the unique aspects of mobile is an initiative we ran with the restaurant chain Harvester. Harvester ran a display ad which offered a coupon that gave consumers 5 off their bill when spending 30 or more. When a person clicked on this coupon, it was delivered straight to their phone, through the Passbook functionality on iOS devices. Unlike a traditional paper coupon, which can easily be lost or left at home, this campaign delivered the coupon into a device that most people keep with them for 24 hours a day, and it was an incredibly innovative way to leverage a uniquely mobile functionality. For the restaurant chain, delivering coupons via mobile has several additional advantages, alongside the aforementioned improved consumer experience: by utilising EagleEyes EPOS redemption capability, the campaign effectiveness can be tracked and optimised in real-time; tracking from issuance to redemption provides greater business intelligence and opportunities for new CRM programmes; the coupon is unique and can only be redeemed against that particular offer; and being unique, the electronic redemption provides greater protection against fraud. Mobile is no longer the advertising channel of the future. It is the advertising channel of today. Brands need to embrace the aspects of mobile that make it unique and if they do that, its been proven that they can enhance the shopping experience and drive purchases through all their commerce destinations.

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1.2 Proximity marketing driving shopping


The trade press is littered with articles about how location in mobile is going to be, or perhaps already is, the next big thing in advertising. No-one is in any doubt that it is an invaluable marketing tool to reach a consumer on the go, make them aware of offers and discounts from retailers in the immediate vicinity and drive footfall into physical high street retailers.
Pure proximity
A mobile message within a close vicinity of a physical location is a huge footfall driver especially with targeted, relevant messages. However just running a nationwide campaign with adverts targeted to a proximity of each branch or store would be successful, but only to a point. Consider a message relevant to the users location: Three Mobile served a proximity specific message to drive awareness of a new store opening on a local high street. The result was an uplift in CTR of c.1% as the communication was on a personal rather than generic level. Although this proved a great success there are other factors to look at as well.

Extended proximity
One key consideration is the effectiveness of proximity based mobile marketing when the geo-fenced area is larger than 1 mile. Business Insider research concludes that mobile display CTRs improve by up to 40% the closer a consumer is to a business; (less than 1 mile away versus 5 to 10 miles). With the exception of perhaps car dealerships and out of town retail parks, this is too great a proximity to effectively drive footfall. Inevitably a large geo-fence will result in huge numbers of consumers seeing the advert when it simply isnt relevant to them. An advert encouraging someone to test drive a luxury car is likely to be a wasted impression if its served to a 19 year old student who is 4 miles from their closest dealership. Rather than just blanket coverage of an area, this luxury car makers marketing team could choose to only target a luxury audience within this extended proximity.

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by Andy Beames Senior Sales Manager, Blis Media

Reaching audience by location


Putting a cap on the furthest distance from a dealership that someone can be targeted will certainly increase efficiency, but so too will only targeting connected devices in luxury hotels, Michelin starred restaurants, marinas, business class airport lounges and golf clubs. Its important to note that these connected devices shouldnt be simply limited to smartphones but can, and definitely should, include tablets and laptops given the usage theyll get at wifi locations such as the above. Moreover, the marketing team could be further selective about the audience they choose to focus on within that geo-fence. Not only could they narrow down just to men over the age of 40 using customer data from public wifi providers or mobile operators, but could consider the previous behaviours and actions of any given consumer. Not only will this also drive footfall but locations with high dwell times increase interaction and click throughs to mobile sites by an additional 14% in the Luxury car market this equates to Brochure and Test drive requests which frequently convert to sales. On the surface, a mobile user walking down the street may not necessarily be the right person to serve a luxury car advert to but imagine that the marketers were able to determine that this person had been browsing car comparison sites recently, or regularly frequented one of the luxury locations above. At this point they not only know that this person is close to a dealership, but has the interests and disposable income to make them a desirable consumer to target, retargeting based on previous location and browsing history like this increases the campaign success further.

Challenges and the future


The big challenge of proximity marketing is the metric by which you measure success although several technology companies claim to measure the uplift in footfall and calculate a genuine ROI these methods are often unproven and can only provide data from small percentages of users who saw the advert. The obvious answer is location specific coupons and discounts but without a substantial overhaul of most EPOS systems this is often not a feasible option either. Until the technology exists to provide these results the best strategy for marketers to drive sales is to use a combination of proximity tools and location based assumptions to reach the right audience in the right place.

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The most accurate location targeting platform with unrivalled scale


Innnity+ Audience
Audience segments based on location behaviour and demographic fact

Innnity+ Proximity
Deliver relevant, timely messages when a customer is near a point of sale

Find your nearest car dealership

5* Hotel

Business Class Lounge Financial District

RTB display advertising . Info@blismedia.com . www.blismedia.com . +44 (0)203 451 9820

1.3 Tracking to maximise your media spends and maximise ROI for mCommerce
Over a quarter of smartphone owners use their device to shop online every week according to recent data1. This number will grow rapidly over the next few years as UK mobile shoppers increase from an estimated 27m in 2013 to 36m in 20152. For retailers this represents a major opportunity.
Mobile advertising plays a significant role the market grew by 148% from 2011 to 20123 as advertisers followed eyeballs and behaviours from traditional digital environments to mobile. Consumer goods and retail accounted for a quarter of all mobile adspend. Optimising the mobile media spend mix during the campaign is the largest available efficiency gain advertisers who do this using accurate and real-time ROI data benefit both from preventing wasted adspend on inefficient buys and from shifting investment to higher ROI driving media. Simply changing the focus from legacy measurements (e.g. CPC) to conversion/return based metrics can revolutionise the efficiency of a mobile media plan yet this is still to be actioned by the majority of mobile advertisers. It is always beneficial to 3rd party serve and track mobile campaigns. Only by doing so does the advertiser have clear control, ownership and visibility of all campaign data. 16 It is always best to use a tool specifically built for mobile online adservers are not able to deal with the complexity of mobile ad serving (stemming from the large variances of devices/screen sizes/ video & audio standards/Flash & JavaScript support/app & browser standards etc.). Reporting discrepancy is still a major factor with often larger discrepancies than online reported. However using specific mobile ad servers eliminates this issue. The media savings from resulting accurate media budget optimisation greatly outweighs any costs of tracking. A dedicated mobile ad server such as Sam4Mobile will track seamlessly cross both app and mobile web ecosystems.

1 Econsultancy Mobile Commerce Compendium July 2013 2 Textlocal June 2013 3 IAB PWC Digital Adspend Full Year 2012

by David Schruers Country Manager, Sam4Mobile


App tracking
Historically it has been difficult to track from media source to app installation, and measuring deeper has been almost impossible. Specialist mobile tracking solutions now track easily from media source to app download, but also measure app activations, registrations, sales value and volume as well as any other in app retail events. This can be linked directly to the originating media source to enable mid and post campaign media plan optimisation. Apps require the SDK of the tracking provider to be inserted into its source code. A key benefit of specialist mobile tracking platforms is a universal SDK it can measure any media source (a mobile ad network for example) without having to insert the SDK from that source into the app. Advertisers now have flexibility to test media buys without lengthy SDK integration processes it only needs to be done once. Unique user tracking methods vary across the mobile landscape there is no standard to track unique users across apps. The best workaround currently is device fingerprinting. This uses non-PII data from the mobile device (e.g. browser type, fonts, plugins, screen size etc.) to create statistically robust IDs. This technology enables accurate tracking of mobile users behaviour before, during and after the app install process. It is now possible to measure the efficiency of media buys against life time value, frequency of purchase and average order value. Optimising media plans with this data is much more effective.

Sam4Mobile is a mobile campaign management platform for media agencies and advertisers that gives unrivalled transparent, reliable mobile campaign data. Our platform provides an easy interface to serve and track your own mobile ad campaigns as simply as possible. We measure any metric you need from impression to ROI and can reveal which mobile media placements are delivering you maximum returns. Our technology allows media agencies and advertisers to serve and measure mobile campaigns across any format and device, with our proprietary SDK and fingerprinting technology enabling post-install KPI app analytics such as repeat usage, sales, leads, subscriptions etc Our universal SDK means advertisers only need to install one SDK we connect to any publisher or network so no more SDK changes needed. Our ad hosting and serving capability gives agencies and advertisers full control of their mobile media campaign. We therefore provide our users a combination of adserving, tracking, optimisation and in-app CRM functionality in one built for mobile platform.

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Mobile web tracking


On the mobile web cookies can be used to identify unique users and to measure ad exposure, response and post campaign events e.g. registrations or sales. However Apple ships Safari with 3rd party cookies disabled. Connecting an ad event to a user and their subsequent browser shopping events with cookies is not possible. (Not a problem on other browsers Firefox may follow suit but has not yet). There are a number of workarounds but the best approach is device fingerprinting which achieves an accuracy of over 95%. By using a combination of device fingerprinting/ cookies/IDs from operating systems campaigns can be accurately tracked across the mobile web from impression to post impression/click activity. With tracking pixels in the relevant areas of the advertisers mobile site, campaigns can be tracked and optimised against metrics such as ROI, average order value, sales volume or lifetime value.

In store
Mobile is a great channel for closing the loop between digital and the high street. Specific campaigns can be optimised against voucher download/registration/ redemption. By issuing unique IDs with vouchers they can be linked back to the media plan in order to optimise buys. Vouchers can be via email, SMS or 3rd party voucher apps. Redemption can be measured through entering unique codes into chip & pin at the point of sale or by scanning barcodes, or through social media triggers such as check ins or tweets. The growth of indoor navigation through Wi-Fi and mobile connections will offer retailers an array of opportunities to test, measure and link mobile advertising directly to retail store transactions.

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Which KPIs should you be thinking about for mobile commerce campaigns?
Mobile campaigns have tended to focus on traffic driving KPIs such a cost per click. Data from Sam4Mobile reveals no correlation between clicks and sales across app or mobile web conversions. Mobile ad serving solutions such as Sam4Mobile will enable primary KPIs to be ROI based sales value or volume, average order value and lifetime value for example. Judging media expenditure on such metrics will result in a far more efficient deployment of budgets. As a secondary KPI metric advertisers should focus on measuring performance across their creative ranges. Regular A/B creative testing using ROI based metrics will help to evolve campaigns to more successful levels. For retailers driving users into physical stores metrics such as cost per voucher redemption or download, cost per store lookup or cost per item reservation can be used to measure media effectiveness. Budget can be optimised to buys that drive the most efficient uplifts in footfall and sales.

How do we measure and optimise campaigns to generate sales?


Aside from the KPIs above advertisers should look at the metrics such as day of week, time of day, media overlap, frequency & recency but also at specific mobile metrics. These include mobile operating system, mobile browser, location (where this data is available), connection type/speed and device type. Due to their complex paths to purchase there can be wide variances in where, when and how shoppers use mobiles from product research stage through price comparison to transaction. These differences can be reflected in the data that is now available to advertisers. Targeting the right message to the user at the right time will reap big rewards.

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1.4 Mobile affiliates driving purchase


Mobile customer journey
We know that consumers use their handsets in a different way to their desktops and it is important that advertisers adapt their strategy based on how their (potential) customers interact with brands on a mobile device. Consumers tend to use their smartphones to quickly look up product information, find the nearest store or find a phone number. Advertisers need to ensure they are able to present their visitors with a seamless journey in order to convert a sale, whether directly to the mobile site, generating calls or by driving footfall to physical stores. These are the new KPIs we can use for mobile in the performance channel.

Understanding mobiles scope


The performance channel can facilitate a number of different advertiser routes to market. As well as the standard eCommerce piece, translated to an mCommerce platform, there are several new forms of interaction possible, for example email registrations, direct call options, call me back buttons or SMS. Even if advertisers dont have a mobile presence yet, we can facilitate their first mobile website and creatives. This way advertisers can ensure customers are able to engage with their proposition via their most personal device. Additionally the affiliate channel is a perfect example of the power of linking online to offline, typically through a customer code, coupon or incentive via hugely popular consumer champion sites such as vouchercodes.co.uk and Quidco. Central to everything is tracking and too often advertisers fail to get the basics correct, the consequence being huge revenues go untracked, discouraging affiliates from investing in the channel. The frustration is the standard affiliate tracking used for desktop, but as a result of mobile sitting separately from the acquisition channel in many companies, it is often overlooked.

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by Hatice van Leeuwen Senior Mobile and Emerging Channel Specialist, Affiliate Window
Tabvertising
With the ever increasing hunger of consumers to consume content on their tablet devices, it is imperative to integrate tablet advertising within your mobile strategy. We see the conversion rate on tablet is similar compared with desktop and therefore its an ideal channel to incorporate within mCommerce. If you combine a tablet campaign with the great targeting variables that mobile can offer, you can optimise your campaign to get the maximum ROI. Think of targeting variables like WIFI only and activity timed after 6pm when people are more likely to be at home and therefore in a comfortable situation to convert. With a specific tablet campaign you can also combine it with TV commercials to enhance the second screen effect and make your campaign as effective as possible.

The mobile landscape


At the moment, the majority of the mobile sales within the performance channel are being generated by voucher and cashback affiliates. This segment is progressive within the space, developing several new technologies to enhance the mobile opportunity. For example, the aforementioned Quidco has a card-linking technology to give cashback to consumers when they are generating in-store sales. Via their mobile app, people can find physical stores where they can get in-store cashback. We also see an explosion of new mobile publishers signing up to our network: from small niche apps, to big mobile display networks. To fully grasp this opportunity it is important for advertisers to integrate affiliate tracking on their mobile site as well. The performance channel remains an excellent place for affiliates to get started and gain access to thousands of advertisers. The barrier to entry is low, if affiliates are willing to accept the payment mechanism. We dont have all the answers for mobile. Its a new, burgeoning, interruptive route to market that is starting to offer tantalising insights into how the consumer of the future will shift to different devices to interact with and purchase from advertisers. The performance channel is known for its innovation and creativity; we can only assume that in time mobile will shape the next chapter in acquisition based marketing.

Loyal app users


Advertisers are also waking up to the possibility of driving mobile and tablet app downloads through the performance channel. This raises interesting considerations about how downloads sit alongside a more acquisition focused affiliate campaign as it might be concentrated more on driving leads or brand engagement. Whether the app is intended to generate subscriptions, drive in-app purchases, or to service your current customer base, you want your downloaded app to be used. The key is understanding measurement and how the various propositions not only achieve what you want them to but also complement, not cannibalise, existing campaigns.

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2
Payments
2.1 Mobile wallet 2.2 NFC 2.3 Mobile payments

2.1 Mobile wallet


Though the concept of the mobile wallet has been around a few years now, those with a vested interest in consumer payment mechanisms and the impact these can have on their businesses can certainly be forgiven for still finding it hard to put a strict definition on the term.
In large part, this challenge arises from the shift towards smartphones, which represent an ability to access the internet from virtually anywhere, anytime. With transition of the UK mobile telephone market to 4G well underway, the mobile internet is for the first time instant and hassle-free, meaning what is understood by the term mobile wallet could encompass all manner of things. Example: if all online/digital wallets are now fully functional on mobile devices, are they not mobile wallets? Its easy to see how the market is fragmented by the potential inclusion of so much more than what was traditionally viewed as mobile. To narrow the field, Ill define a mobile wallet as being centred around something traditionally mobile: the SIM as the element that safeguards security and authenticity (in much the same as the way a plastic debit or credit card uses the chip). The mobile wallet must then minimally include a fund source or account of some sort thats stored on the device, in the Cloud, or somewhere else thats accessible via the mobile device NFC, direct-to-bill mobile payments, peer-to-peer payments, and accounts linked to PayPal or credit and debit cards. Of course, payments is just one aspect, albeit obviously the most important one. To gain real utility, a mobile wallet should not just be an alternative payment mechanism, but a real replacement for the physical wallet. The average person takes up to 24 hours to notice theyre missing their wallet, but theyll notice a missing mobile phone within an hour. If mobile phones are thus already more indispensable than wallets, eradicating the latter altogether surely only requires the mobile phone be able to subsume all its functions: payments, loyalty cards, vouchers, receipts, and transport and entertainment tickets.

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by Dan Penn Business Development Manager, EE

EE is the de facto mobile wallet leader in the UK with the only mobile contactless payments offering on the market. Initially, under the Orange brand, our evolution started with the Orange Quick Tap service, and was soon followed by EE Cash on Tap, which allows consumers to make contactless purchases of up to 20 anywhere contactless cards are accepted simply by tapping their phone against the payment terminal. Others, however, and most notably O2, are gearing up activity in this space rapidly. At the same time, we see most of the major mobile device manufacturers Sony, Samsung, Blackberry gaining traction with new NFC capable devices like the Samsung Galaxy S4. Add to that the following facts (courtesy of Ofcom): At 58%, the UKs smartphone penetration is one of the highest in the world 1 in 5 smartphones will be NFC-enabled by 2015 The UKs consumption of mobile data/internet was already the highest in the world by December 2011 and its hard not to see conditions in the UK are ripe to allow the first multi-functional mobile wallet to become a reality.

In a difficult economic climate, the rise of mobile as a significant business channel in and of itself has made companies begin to detail allencompassing mobile strategies. Here, they must remember that the mobile wallet represents far more than just finance and retail just as financial services are more than simply payments: loyalty, ticketing, couponing, sharing, insight, and money management are all important parts of the mix. Looking further afield, we can see examples of such mobile wallets in action. ISIS, the joint venture between AT&T, T-Mobile and Verizon, has partnerships with MasterCard, Visa, American Express and Discover; it holds multiple payment and loyalty cards, and even organises what were previously paper-based coupons and promotions so users always have them handy at the point of purchase, where they are brought to the consumers and retailers attention at the right time.

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Such examples make EE confident the mobile phone will become the consumers wallet, the every card, and the general life hub as the lines between digital and physical continue to blur. Well continue to see growth in scale and take-up of mobile payments and wallet services amongst consumers, but also increasing numbers of partnership programmes from the retail, financial, transport, entertainment and other communities. Meanwhile, payments innovation companies can be expected to come in with their own solutions that broaden appeal and utility in all sorts of ways. Already, were seeing exponential growth in adoption of mobile contactless payments amongst our consumer customers, while partnerships continue to increase in number and more and more household-name retailers are moving to contactless payment facilities. The next logical step is clearly for loyalty/reward schemes to be built into the retailers contactless/ mobile strategy, opening the door to rich, aggregated customer behavioural data that can transform customer service and business performance. Meanwhile, the last few months have seen mass transport companies like TfL begin to roll out contactless payment support on buses and the London Underground, indicating mobile travel ticketing is likely not too far off. The mobile wallet is the obvious home for these as new and existing solutions continue to grow in capability.

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In summary, the mobile wallet market may still be fragmented, but all of the pieces are either in place or will be imminently; all that is lacking is some organisation to fit them together before we see mass adoption. Consumers await only the first multipurpose mobile wallet that represents a realistic replacement for the physical one. Those interested in being in it from the ground level up should begin their internal and external discussions now, taking care to consider at a minimum their activity in this space may involve developing or partnering for capabilities in payments, security, loyalty/reward, data capture and analysis and, crucially, support that is open-ended enough to allow for growth as the market develops further.

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2.2 NFC
Near Field Communication (NFC) allows the free flow of data between online devices such as smartphones and offline products.
NFC-enabled devices contain a chip that sends radio waves to a nearby NFC device or an object containing an RFID tag. The tag can be integrated into posters or products and when tapped, can enable a variety of actions such as making a payment, opening an internet link or downloading an app. Only one in three smartphones currently supports NFC, partly due to the lack of support from Apple. Perhaps more significantly, two thirds of smartphone owners dont even know if their phone has NFC so there is still more education to be done around the technology. Nonetheless, we can already start to identify two key opportunities that will add value for both consumers and advertisers: mCommerce and interactive consumer experiences.

Ticketing

Potential uses for

Advertising interaction

Cashless payments

NFC

Identification

Loyalty programs

In-store marketing

Social media 28

Physical access

by Sabrina Francis Digital Strategist, Arena Media

Revolution in mCommerce
With 61% of shopping activities beginning on a smartphone and mobile accounting for 20% of the UK online retail market, mobile is becoming the quintessential shopping companion. Enabling quick and secure mobile payments and in- store voucher redemption, NFC is expected to make a large contribution to the future of the shopping experience. Similar to the contactless payment card mechanism, NFC-enabled mobile wallets remove the need for physical bank cards, allowing users to make cashless payments or redeem vouchers straight from their mobile. However as a relatively nascent territory, mobile wallets are lacking in scale because of the fragmentation of providers and limited number of retailers that are able to support the technology. The latest Berg Insight report identifies that there were NFC mobile wallet services live in 13 countries worldwide by the end of Q1 2013. However, there are only 3 NFC mobile wallet services in the world that have an active market of more than 100,000 users: Google Wallet in the US market, followed by Isis and Turkcell which is mainly operating in Turkey. Australia is also one of the countries leading the way with 25-30% of all transactions under $100 being contactless while China is currently trialling NFC payments on public transport. There is yet to be a clear market leader in the UK with emerging products including MasterPass, EES Cash on Tap, Apple Passbook and Samsung wallet. In July 2013, the Moneto prepaid wallet service launched NFC on iPhone4 and 4s in the UK, expanding the market past Android territory. This may have prompted the latest prediction that NFC penetration will increase to approximately 32% by 2017. Yet, consumer education and consolidation of providers is needed first before it becomes an everyday method of payment.

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Interactive consumer experiences


Customers do not recognise lines and nor should we. Online, offline, above the line, below the line we need to think and deliver experiences and marketing without delineation. (Ashley Friedlin eConsultancy Mobile Marketing Manifesto) The evolution of the smartphone has been instrumental in closing the gap between the physical and digital world. Integrating the NFC tag into products and posters is a great opportunity for marketers to enhance consumer experiences, particularly by making product and brand experiences more interactive and ultimately more accountable. An example of this can be seen from the Quick Tap Treats campaign with UK restaurant EAT which was the UKs first NFC consumer marketing campaign. Customers could use Orange NFC-enabled phones to tap posters within EAT stores to activate a wheel of fortune which randomly selected a treat. After three spins, the customer selected a treat to redeem in-store. Despite being limited to Orange devices, the results were quite impressive with 24,614 transactions over the two months, working out to 410 transactions per day. Three fifths of consumers also purchased other additional items simultaneously when collecting their treats. This demonstrates how NFC can be used to breathe life back into the in- store experience in light of the increased concerns around show-rooming (where consumers examine merchandise in-store but purchase them online once theyve found the lowest price). Marketers can therefore look forward to more opportunities when the technology has a wider user base.

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In summary
The fragmentation of providers and the limited penetration of NFC-enabled devices mean that in the short-term, the true potential of NFC is still to be realised. Although this has generated great interest among marketers, consumer demand is still relatively low. We must consider this as a longer term effort due to the supporting ecosystem and infrastructure that needs to be established. It will then be down to marketers to create compelling incentives for consumers to engage using this innovative and accountable technology.

Sources: Posterscope/Clear Channel Study UK & USA www.slideshare.net/Posterscope/posterscope-nfc-infographic001v21slimscroll www.slideshare.net/Kuliza_Research/commerce-with-a-tap econsultancy.com/uk/blog/63105-tap-on-the-map-maybe-i-was-wrong-about-nfc www.proxama.com/products-and-services/ www.berginsight.com/News.aspx?m_m=6 Image: www.nfctimes.com/news/orange-uk-launch-nfc-loyalty-app-seeks-build-user-numbers

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2.3 Mobile payments


Mobile phones have revolutionised numerous industries. It would be fascinating to track the sales of alarm clocks, A-Z maps, pocket size digital cameras, paper diaries and address books since the arrival of the smartphone.
Now the payments industry is under the spotlight. All the ingredients are in place: consumer demand, handset capabilities and an investment community hungry for trusted and secure mobile payment platforms to unlock massive growth potential on a global scale. This section covers the 6 main mobile payments models available. 1. Mobile web-based payments 2. In-app payments 3. Operator (carrier) billing 4. Payment-specic apps 5. Mobile wallet (See Section 2.1) 6. Contactless payments [NFC/RFID] (See Section 2.2) Before we review each payment model lets consider the main players which determine the success of each model. Banks and credit card companies, which seek to maintain their hold on the consumer payments market. Mobile operators, which have access to extensive consumer mobile and payment data and seek to further monetize their user base. Point of sale tech providers, which provide the payment security processes, carry realtime transaction data from customers to EPOS and online check-outs to CRM databases. Mobile payment site and app developers, which provide the User Experiences to conduct mobile commerce. Device manufacturers, whose competitive advantage hinges on delivering ever enhanced functionality to grow their share in todays cut-throat mobile handset markets.

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by Rob Thurner Mobile Consultant and Trainer, Burner Mobile

Mobile app payment model 1: Web-based payment


As the mobile internet becomes mainstream for all industry sectors, mobile optimised websites deliver fast ROI for transactional sites. Retailers have been early adopters: 74% of the UKs leading 50 retailers now offer mobile optimised sites, and 81% of them are transactional. Kiddicares mobile site took just 7 weeks to design and build, and the first order was placed within 4 minutes. Within 12 weeks, mobile accounted for 10% of all Kiddicare.com sales.

Sources: www.youtube.com/user/barclaysonline www.youtube.com/watch?v=x5woIGSOLGk Image: eibDIGITAL

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Mobile app payment model 2: Mobile app payments


Apple pioneered a convenient, secure and trusted channel for music lovers to download and pay for music. iTunes users set up their accounts online, add credit card details just once, and agree T&Cs authorising Apple to charge them via their mobile bills for multiple purchases. This payment model has since been replicated by Android and Microsoft. Amazons app is best in class. Described succinctly in the app store as Comprehensive, Convenient, Fast, Secure and Universal, the app allows users to sign in with their existing Amazon account to access basket, payment and shopping options, compare prices instantly by scanning barcodes, snap a picture or type a search, and access international content from the single app. The 1-click purchase option provides a rapid, spontaneous purchase solution, without the need for additional log-in.

Mobile payment model 3: Operator (carrier) billing


Operator billing provides a secure, convenient and speedy alternative both for the consumer and the merchant opening up an addressable market that covers virtually the entire global mobile market. Gartner expects direct operator billing to account for about 88 per cent of total transactions in North America and about 80 per cent in Western Europe by 2016. Operators offer Premium rate messaging service (PSMS) for organisations wanting the take payments via SMS. PSMS is used extensively by charities taking one-off donations via mobile, for sweepstake text and win competitions, and for TV voting campaigns. In the UK, PSMS promotions are run on shortcodes which command price premium range of 10p, 25p, 35p, 50p, 1, 1.50, 5.

Mobile payment model 4: Payment-specific apps


Apps have become a battleground for the banks and payment providers to develop an additional payment channel for existing customers, and to win over new customers. Payment-specific apps can be grouped into three categories. Personal banking Provided by most major banks, these require customer log-in to access account balances, check and analyse spend history, and make payments. Person-to-Person payments Barclays Pingit, Europes first person-to-person service for sending or receiving money via your mobile, helps users sort out IOUs quickly, easily, and securely. The app uses industry standard encryption, and is automatically wiped from the phone if the user reports his or her phone lost or stolen.

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On-device payments For small and medium sized businesses which prefer to take card payments to cash, two rivals provide on-device B2B and B2C payments: Square and PayPal Mobile. Square, set up by Twitter co-founder Jack Dorsey, enables anyone to take credit card payments on smartphones. Users simply attach the white Square to the Apple and Android device and insert the card to the Square. The card transaction is verified and validated via secure connection. Apple and Android charge a 2.75% commission for each swiped payment. PayPals contribution to mobile payments is immense, with 2013 global revenues forecast at $25 billion (up from $4 billion in 2011). PayPal Here1 allows businesses to take payments using blue triangular credit card reader which is plugged into the smartphones headphone jack. The card data is encrypted before transmission, and the customer receives email confirmation of the transaction. PayPal Beacon pairs an in-store Bluetooth Low Energy device and a PayPal app to sense when a consumer enters the store. It then uses the pay with your face concept which let sales assistants check and verify the PayPal user picture on his or her payment till before money is transferred securely no wallet, no card, no NFC. Before deciding which mobile payment model to develop, take time evaluating how each one meets your consumers needs. The winners will satisfy these 4 success factors:

Mobile payment success factors

Seamless Solution, Data integration

Ease, speed, convenience, UX

Trust, Privacy, Security

Scaleable

1 www.youtube.com/watch?v=x5woIGSOLGk

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3
Mobile in-store
3.1 Mobile price checking 3.2 Mobile vouchers and in-store promotions

3.1 Mobile price checking


In todays digital centric world, nine out of ten purchases still take place offline, with four of those ten purchases being directly influenced by online research. The rise of smartphone technology has ensured that mobile is playing an increasingly important role within the online research process.
Today, mobile devices account for 17.4% of global web page views and approximately 30% of total search volumes, its influence is large and growing. Mobile is changing the face of online research, moving it from an activity conducted at home or at work to being an activity conducted in real-time, when in a physical store. 17% of all mobile searches take place when a consumer is in-store, and 95% of all smartphone owners have used their device to research a product when in-store. New devices create new behaviours, and smartphone technology is directly responsible for showrooming, the practice of consumers using physical bricks and mortar as showrooms to examine products, and then completing their purchase at a later time online. Showrooming is having an increasingly powerful effect upon traditional businesses, as consumers are taking advantage of smart online retailers when looking for best pricing or quality of service. This has been named as the Amazon effect, where consumers visit a physical store only to complete their purchase on Amazon, leaving the physical retailer without a sale. According to a recent Foolproof research study, the lead up to Christmas 2012 saw 24% of all UK shoppers showrooming, with 40% of them taking their business elsewhere as a result. Over 20% of shoppers say they went into a store just to check out something they planned to buy online. Showrooming is even more prevalent amongst 18-39 year olds, with 39% exhibiting these behaviours, as opposed to 18% of shoppers over the age of 40. To put this into context, a 10% leakage as a result of showrooming activities meant 500m of sales switched between retailers in the final weekend before Christmas. EBAY have forecasted this trend to rise with 59% of UK shoppers engaging in this by 2014, which will in turn save UK shoppers 300m. Indeed the showrooming effect was named as a critical factor in the demise of HMV and more recently Jessops.

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by Alex Newman Head of Mobile EMEA, OmnicomMediaGroup

Consumers engage in showrooming for a variety of reasons, and its not always just about price. Although 74% of participants state that they engage in these behaviours to directly compare prices, there are other factors that influence the propensity to complete the purchase online. 40% of showroomers, simply wanted to see an item before purchasing online, 22% made the purchase online when in-store as the item was out of stock, whilst 15% would rather have had the item sent directly to their home. 4% of showroomers also stated they were simply looking for product reviews online, and these reviews would play a vital role in their purchase. This trend of people using their devices to access information that directly influences their purchasing behaviour is affecting retail globally. As such, we are now beginning to see examples of ways in which retailers are beginning to fight back from across the globe. In Australia, we have seen a small Brisbane grocery store implement a charge to customers who use the store to browse, ask advice and then leave without purchasing. Recently, Victoria Barnsley, the Chief Executive of HarperCollins suggested that the idea of charging customers to browse in a bookstore is not that insane. BestBuy stores in the US have implemented a price match scheme, where they will match any online retailer when customers are in store. The challenge for retail is to evolve their offering, to provide customers with a high level of service that goes above and beyond anything that could be delivered online. The knowledge, passion, and service manner of retail staff is now the critical weapon retailers have at their disposal when securing the future of bricks and mortar shopping. It is also worth posing the question, what would online retailers do without physical bricks and mortar shops to inspire shoppers ? The two have an intertwined relationship, but smartphone technology is currently providing online retailers with the upper hand. One thing is for sure, the future of retail is rife for transformation, and traditional retailers will have to adapt if they are to survive in this increasingly mobile world.

Showrooming

Image: www.gizmodo.co.uk/2013/01/jessops-its-all-amazons-fault/

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3.2 Mobile vouchers and in-store promotions


With mobile technology now an everyday feature of peoples lives, brands and retailers can use it for engaging customers with targeted mobile vouchers and timely in-store promotional messages.
Mobile engagement is convenient and useful for consumers, and improves retailers relationships with customers. However, a badly planned mobile promotion campaign can result in the opposite, so read this chapter for tips on creating a successful campaign.

Whats on offer?
Mobile promotions come in various shapes and formats: They can be as simple as an alpha-numeric code sent as an SMS text message. SMS can also be used to send a URL link to a website that leads to the coupon. A retailer can also send a coupon as content within an MMS message. Retailers with a branded mobile app can send push notifications to smartphone users who have downloaded the app. The notification appears as an on-screen message which leads to a page in the app displaying the voucher. Each type of coupon can be redeemed just by showing the message to the sales assistant at the checkout.

Why vouchers?
The current difficult economic conditions mean that consumers are keen to save money wherever possible and expect deals on everything from grocery shopping to going out and travel. A recent YouGov study of 2,100 consumers in the UK found that 82 per cent of people have used a discount or voucher of some kind over the last 12 months. This consumer demand extends to mobile vouchers. One advantage of mobile vouchers is that, unlike paper ones, special offers sent to a mobile phone dont need to be cut out and carried around. As a result, mobile offers deliver a high return for advertisers, brands and retailers: redemption rates for mobile vouchers stand at 10%, compared to around 1% for paper vouchers. Retailers can use mobile to quickly and easily reach consumers wherever they are, to trigger an immediate response or action. This can be as simple as encouraging people to visit their nearest store branch with a 10 per cent off everything reminder sent to their mobile phone either the day before a sale, or on the morning of a sale.

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by OpenMarket

An interactive customer experience in-store


Retailers can use mobile in-store to deliver a more interactive customer experience to shoppers in a way that provides a transactional money off offer, and which adds value for the customer in other ways. Example: A supermarket can set up signs in stores that encourage customers to text a keyword such as ITALIAN, CHINESE, or INDIAN to a shortcode. The supermarket then sends them an SMS link to a recipe for an Italian, Chinese or Indian meal, plus a money-off voucher to use in-store for one of the main ingredients. This simple and timely mobile-based offer enhances the supermarkets relationship with customers. It also not only saves them money on an item, the shopper may also then buy other ingredients for the free recipe they received.

Mobile crediting
Another innovative use of mobile for promotional purposes is mobile crediting that is, where a brand adds credit directly onto a consumers mobile bill or pay-as-you-go credit in return for a purchase or redeeming a special offer. Research by mobile engagement expert OpenMarket and research firm MobileSQUARED in July 2011 found that over 60 per cent of respondents aged between 16 and 30 would either buy or be more likely to buy a product that offers mobile crediting instead of a similar product. Mobile crediting is therefore an effective promotional technique for brands to drive product sales and also build loyalty with their customers.

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Smart mobile engagement


Mobile provides the opportunity for intelligent engagement with offers and coupons that are directly relevant to consumers preferences and tastes. In this way, retailers can combine their physical and online assets to boost their existing relationship with customers and create new sales opportunities as well. A retailer can analyse the purchase history contained on a customers store card, including: What products theyve purchased When they purchased them Which location they purchased them from How often they purchase them This data can be used to send consumers a coupon or promotional message for a product that theyve either purchased before, or for a related relevant product that other customers with a similar profile have also purchased and which they too might be interested in. This approach can easily be applied for all consumer goods.

Mobile engagement in action


For example: a woman out shopping receives an SMS, MMS or push notification on her mobile phone, offering her a one-hour 30% discount coupon for a nearby branch of her favourite department store. Once in the store, she receives another mobile message listing items that she might like, based on her recent purchases. The woman looks for a jacket, but unfortunately the store doesnt have it in her size. A helpful sales assistant then looks up the item on their mobile device to check its availability at other stores: they find the right size and arrange for the jacket to be delivered to the womans home in a few days time. The store also sends an SMS confirmation to the woman when the jacket arrives at her home. This is a perfect example of how a retailer can use mobile to provide a positive customer experience. In this instance, the woman feels that she is a valued customer, which in turn increases her loyalty to the stores brand. The department store has also not only created a sales opportunity but also closed a sale that might otherwise have been lost due to a lack of available stock.

Mobile provides the opportunity for intelligent engagement with offers and coupons that are directly relevant to consumers preferences and tastes

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Its all about data


Mobile promotions can be used to create a database of customers, as well as expand an existing one or even solely to continue interacting with current customers. For best results in offering tailored, targeted and relevant vouchers and in-store promotions, a retailer needs to: Connect and combine the different sets of customer data Use data analytics to properly examine them for buying patterns and customer preferences Any brand or retailer considering a mobile campaign should not be discouraged or feel overwhelmed if it doesnt have certain parts in place already, such as a smartphone app or an advanced customer data analytics system. A simple and straightforward mobile-based campaign that incorporates existing systems can still deliver new sales opportunities and valuable customer interactions. As retailers become more confident and experienced in using mobile, their investment in the channel will increase.

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4
Building for mobile shopping
4.1 Apps vs Sites 4.2 Mobile ticketing and mobile loyalty schemes 4.3 Tracking your mobile destinations

4.1 Apps vs Sites


Mobile site or app? The answer is both
Its not a case of whether to build an app or a mobile site. Today, most big brands need both.  Apps help deepen relationships with your loyal customers.  Mobile sites are essential for all day-to-day customer interactions and customer acquisition. So the better question is: How do I optimally serve the needs of mobile customers? The best place to begin is making sure your website works across devices including mobile. 1. Understand user activity To identify what areas to prioritise, analyse your web traffic. Where are customers coming from? When do they visit? What content do they consume? And what devices are they using? 2. Tailor content Your research should provide insight into what smartphone users are looking for versus visitors on computers and tablets. Keep their needs in mind. Make sure to design a complete experience for mobile, rather than simply culling content from your existing site. 3. Decide on implementation To address consumers across devices and allow content customisation based on their context, there are three options: Responsive web design (Same HTML and URL) Responsive web design (RWD) enables you to optimise across different screen sizes without building multiple websites. Using a single URL, a responsive site adjusts images, template layouts and content according to device and screen. Dynamic Serving (Different HTML, same URL) When customers visit your URL, the web server can detect what device theyre on and dynamically present a custom page. Built using style sheets, custom pages can be designed for any kind of device smartphones, tablets, computers, even Smart TVs. Separate mobile URLs Build a site specifically for mobile traffic separate from your desktop site, so when mobile visitors navigate to your URL (e.g. guardian.co.uk), the browser detects the device and redirects them to the mobile-optimised version of your site (e.g. m.guardian.co.uk). Irrespective of the way you build make sure you take into considerations such as speed, usability, content and mCommerce.

Building a mobile site


Research shows that:  75% of customers prefer a mobile friendly website  61% of customers who visit a site thats not mobile friendly are likely to go to a competitors site Businesses that allow users to interact with their web presence in all circumstances and devices can generate more engagement. Heres how to get started.

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by Matt Brocklehurst Product Marketing Manager, Google

Four factors to consider for mobile when building your website: 1 Speed
Keep page and image weight small

2 Usability
Make buttons big and scrolling simple; avoid pinch and zoom

3 Content
Use analytics for the full picture of what your customers want

4 M-Commerce
Keep forms simple and minimise steps required

38%
of people say speed is the most important factor when using the mobile web1

52%
said that a bad user experience made them less likely to engage with a company2

61%
will leave if they dont see what they are looking for right away on a mobile website and will quickly move to another website3

66%
have abandoned a shopping cart because of issues encountered at check-out4

1 2 3 4

The Peoples Web Report, Netbiscuits, UK (June 2013) What Users Want Most from Mobile Sites Today, Google/Sterling Research/SmithGeiger, US (July 2012) What Users Want Most from Mobile Sites Today, Google/Sterling Research/SmithGeiger, US (July 2012) 2013 Mobile Consumer Insights, JUMIO/Harris Interactive, US (May 2013)

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Success stories: Plusnet and RWD


When Plusnet saw smartphone and tablet visitors were increasing, it built a RWD site. Now its not only easier to maintain content and embrace future device developments, but performance is up too online sales via smartphone and tablet have grown tenfold year on year, while the time-to-convert metric has decreased 40%. www.plus.net

Building a mobile app


Having created a mobile site, next step could be to build a branded app to enrich customer relationships. Think of an app as a bookmark for users who regularly want to engage with you. Follow these guidelines to make the most of that opportunity 1. Offer compelling value When an app doesnt deliver in terms of entertainment or utility, its lifespan will be short. So be clear about why youre building one. To offer new functionality? Inspire loyalty? Both? 2. Cater to large mobile platforms If resources are limited, prioritise those mobile platforms that represent the majority of your smartphone user base. 3. Drive downloads You can have the best app in the marketplace but this is irrelevant if your customers dont know about it. Promotion is key, so: Guide visitors from your mobile, tablet and desktop sites straight to your apps download page. Use mobile search ads to send users directly to your app in the marketplace. Link directly to your apps download page from mobile ads shown in other apps. Coordinate promotional efforts including newsletters, print ads etc. Receiving lots of downloads quickly boosts rankings in some app stores.

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Success story: Starbucks


Starbucks branded mobile app emphasises utility, enabling users to pre-order drinks, find a nearby store, refill their Starbucks card and more. Today, mobile payments via the Starbucks app account for 10% of all US transactions, and weekly mobile payments have doubled over the last six months.

Your mobile strategy checklist


To build your brands mobile presence, bear these main points in mind: Understand the specific needs of your mobile customer. Create a mobile website that considers speed, usability, content and mCommerce. Build an app for a subset of your audience and remember promotion is key. Take a single user approach, making sure apps and sites work together seamlessly. Measure, analyze and iterate. You wont hit the jackpot right from the start, but continual analysis across destinations and devices will help shape a successful mobile strategy and optimal consumer experience.

Sites and apps working together


In terms of look, feel and experience, your sites whether on mobile, tablet or desktop should work together with your apps. This means that actions performed in an online account (e.g. creating a wish list or initiating an order) should translate to the app and vice versa. Dont force customers to start from scratch when they switch devices. Instead, follow the examples of Tesco or Marks & Spencer, which allow customers to access their baskets on both internet or app to enjoy a seamless experience.

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4.2 Mobile ticketing and mobile loyalty schemes


Winning hearts, minds and wallets through mobile transactions and loyalty
The rise of mobile over the last five years has changed how marketers service their customers. Mobility is a wave that has washed over the world, and as the waters settle weve found that the landscape of consumer engagement has forever changed consumer behaviour and how marketers approach them. Mobility, however you define it, as a device (phone, tablet, phablet), a medium (messaging, browsing, audio/video content, apps) or an experience (news, weather, sports, transportation, entertainment, commerce) is everywhere. There are more mobile devices in use today than there are people on the planet. More people throughout the world access the web through a mobile device than they do through the computer. We use mobile to express ourselves, through search, reviews and social media. We second screen, i.e. use mobile while watching TV or reading a newspaper. We use mobile to buy goods, services and experiences and were often looking to connect with brands that we find an affinity with. Marketers that understand this can win.

Understanding commerce in a mobile world


The opportunities for enabling commerce through and with mobile are immense, across all sectors. Mobile provides the means of discovery, transaction and, as in the case of ticketing and digital services, distribution and redemption. For example, in the area of ticketing, across land, sea or air or for events, mobility has a huge impact. You can use your phone device to buy tickets, to board a plane or bus, enter a concert and so much more. A Q3 2013 Juniper Research report estimates that 18 billion transport and events tickets will be delivered through mobile by 2018 worldwide. In Sweden today, mobile already accounts for 65% of bus ticket transactions. While mobile ticketing adoption continues to rise, this is just one area where mobile impacts transactions. Consumers are showing theyre ready for commercial engagements through mobile. For instance, a 2013 VocaLink study in the UK found that half the UK population is ready for mobile payments, 20% are already doing it and 30% intend to. Starbucks has 10 million mobile active users and recently announced that theyre processing four million mobile transactions a week which account for 10% of their total revenue. PayPal will process $14 billion in payments through mobile this year, up 250% from last year. The list of revenue growth for major firms who have embraced mobility is long. It is important to note that there are two sides to mobile transactions mobile payments and mobile commerce. eMarketer estimates that payments made at a physical point of sale (POS) by swiping, tapping, scanning, etc. a mobile device (aka contactless payments or proximity payments) will reach $1 billion by the end of 2013 and $58 billion by 2017. Payments made through mobile, that is mobile commerce, may be as high as $1.5 trillion this year and may reach $3.2 trillion by 2017, according to Juniper Research.

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by Michael J. Becker Market Development North America and Strategic Advisor, Somo
The economics and role of loyalty
Capturing a transaction, however, is not enough for long-term success. Once you have your first sale, you want to make sure that you keep your customer and foster loyalty. Having a well thought-out approach to loyalty is very important. Studies have shown that consumers see loyalty programmes as part of their brand relationship and that they affect how, when and where they make a purchase. Like commerce, relationship and loyalty programmes are being completely transformed by mobile, and consumers are ready. Maritz Loyalty Marketing reported earlier this year that 73% of smartphone users are interested in interacting with loyalty programmes through their mobile device. There are some really interesting ways in which marketers are engaging their consumers through mobile to stimulate brand affinity and loyalty and ultimately to drive sales and in many cases to reduce costs, too. One cool example: In Ireland, Budweiser launched the Ice Cold Index App programme stating the hotter the day the less you pay. Consumers that have downloaded the app get 1 off if it is 16C outside, 2 off if it is 18C, and they get a free beer if it is 20C. How is that for loyalty and taking care of your customers in need? Similarly, Guinness has created the magic behind the gates programme to foster engagement in pubs where users just tap their device on an NFC-enabled fount. Others have found success by focusing on providing a great customer experience. In 2011 Somo, the worlds leading mobile solutions company, helped develop and launch an iPad app for Dominos Pizza in the UK to create the best possible purchase experience. Clearly, the efforts have accomplished a healthy return on investment. By March 2012, Dominos was taking in $1.59 million in sales via its mobile platforms in the UK alone. Your offering doesnt have to be complex to provide value with mobile. To be successful in driving transactions and fostering loyalty through mobile, its imperative that marketers take the time to reflect. They need to evaluate their business and their customers. They should talk to their customers, listen, watch and learn, then focus on fulfilling the customers need in a contextually relevant manner and on the customers terms. This is what many are starting to refer to as the Omnichannel, a commercial world with no borders and boundaries. Mobility has transformed everything and opened up a new world of opportunity.

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4.3 Tracking your mobile destinations


Business intelligence platforms for mobile apps provide download tracking and in-app analytics to give developers and app marketers critical information about how to run their businesses effectively. What does this really mean?
By collecting data and using it to deliver key performance indicators (KPIs) displayed on a dashboard, app analytics aids in identifying problem areas, understanding user behaviour, how and where monetisation is possible and helps to make decisions about functionality based on specific data in real-time. Key metrics enable comparisons between marketing sources by revealing which marketing source attracts what type of user and in some cases, more importantly, how they behave inside the app. For some time now, SDKs have been perceived as a necessary evil. A poorly built SDK will crash apps, introduce incompatibilities and may rely on techniques that become deprecated and developers cannot analyse these risks themselves as SDKs are often distributed as a closed-source binary. Choosing an intelligent SDK, however, can provide significant analytics benefits and frees developers from having to maintain tracking and data collection, allowing them to focus on building. Paul Mller, CTO of Adeven, explains that while app tracking faces some fresh challenges with the adoption of the IDFA, analytics companies have been prompted to develop even more streamlined business intelligence platforms. The key is that these companies know the challenges and make it their business to solve them. At the core of these analytics lays one rudimentary question: What is a session and how can it be measured accurately? Session counting is key to understanding the changes we have discussed here, and over the years reporting sessions in an app, and from an SDK in that app, have become increasingly more complex.

Tracking and SDKs


Recent trends reveal a market shift away from cost-per-click and cost-per-install as pricing models begin to reflect the growing demand for in-depth in-app analytics through cost-peraction pricing on user engagement. At the same time, app analytics become increasingly more sophisticated to cater to these campaigns. With the app economy moving towards developing and acquiring certain actions within an app it has become essential to track these events as they happen, to get a clear picture of the resulting effect they have in terms of user engagement and spending.

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by Christian Henschel CEO and Co-founder, Adeven

We are a mobile tracking company that provides the most comprehensive business intelligence platform for mobile app marketing available today. Currently headquartered in London and Berlin, we are now expanding operations to the US market. Coming from an app development and publishing background, our team created adjust.io to offer superior download tracking solutions and postinstall KPI analytics using an open source SDK. We provide seamless integration into almost all networks, measuring everything that an advertiser, publisher or developer could possibly need in order to fully optimise their marketing campaign. Our streamlined dashboard delivers performance reports in real-time and it does so clearly and simply. Through our dashboard we provide full access to apptrace. This is a free app store analytics tool that gives our users complete access to iOS app and publisher data with Play Store data soon to follow. Along with a sentiment analysis of reviews for every app in the iTunes store it also provides up-todate top lists and a unique global ranking system. Its about empowering businesses of all sizes to turn data into revenue.

At first it was easy: apps were either on or off, and when the user left the app, the session was closed. When platforms started to support multi-tasking, these status changes became more diffuse. Just because the app is put in the background it doesnt mean that the session is over. With the inclusion of the notification centre, push messages and even in-app purchases, users increasingly flip between different states such as resume, background and foreground. Figuring out what counts as a session has become considerably more chaotic. Adeven chose to define a standardised session as a continuous stream of actions and state changes with no more than a 30-minute gap in between. This, of course, requires analytics to gather information on a variety of state changes and events. Ensuring this data up-to-date is a job the developer should not have to spend any time doing. Developers especially prefer an open-source SDK, and for very good reasons. An open-source SDK gives developers some security in the knowledge that they can see exactly what they are implementing into their app and how to work with it. Developing an intelligent SDK that understands these definitions and aggregates sessions in this way is no easy task. Here is where intelligent SDKs from dedicated analytics outfits come in, and why choosing the right SDK is a big concern. While SDKs are indeed necessary, they are far from an evil. We would go so far as to say that the intelligent open-source SDK can be a developers best friend.

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Good marketing is a science and an art


KPIs are essential tools to develop a good understanding about how successful your marketing campaign is and the areas where it requires more attention and strategising. Additionally, the information that KPIs deliver also gives the product developers a great insight into how best to monetise and what aspect of the app to work on more. For apps that capitalise on in-app purchases it is critical to have a large enough user base and dataset to work with. Making key business decisions based on small sample sized figures almost always provides a distorted picture of whats actually going on. Many app businesses separate their product group from their marketing group. While the product group focuses on improving app engagement, the marketers focus on the challenge of how to acquire the most valuable users. It is important to keep in mind that optimising KPIs is a complex science, and no one can or should give out general advice on which one works for your product. For some time now, the idea that marketing and product development are in fact two integral parts of any business has been widely accepted. However, its unfortunately often the case that getting the word out there is deemed an extravagance rather than an absolute necessity. The following are just some examples of KPIs that can give you valuable information to make informed choices about your marketing spend.

Time to first purchase

ARPU/Timespan

One-time user rate

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20

11

Time To First Purchase (TTFP)


TTFP is a great way to understand the users experience within the app and whether app functionality is ideal for the target you would like to achieve. Having a concrete idea about how monetisation is and should be taking place within the app is key to getting the most out of your ROI. Tip: You know youre Average User Lifetime is shorter than the Time To First Purchase it would be safe to say you should be rethinking your strategy.
5 3 1 2 3 0

9 5

Days until first purchase

2.24

Average Revenue Per User Over Time (ARPU)


ARPU is the average revenue per user generated over a 7-day and 30-day period. It informs the company about when they can expect to see returns on the money spent on marketing and user acquisition. Its also important to know your average lifetime revenue per user, but lifetime might be a very, very long time. People may play your game for months or even years, but the majority of your marketing costs are going to be up front, so you need to know when you will get that back.

1.45 1.25 1.02

0.54 0.382 0.00

0.416

0.53 0.116

Average revenue per user

88% 79% 76% 65% 58% 62% 72% 62% 55% 67%

One-time User Rate (OTU)


The one-time user rate also infamously known as the First Day Retention shows developers and marketeers how an app is performing in terms lasting app engagement. For example, a 60 percent one-time user rate would mean that 60 percent of your users are leaving after one day. Needless to say a high rate flags issues with functionality and even the presence of bugs and freezes.

One-time user rate

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5
The future of mobile shopping
5.1 AR in mobile shopping 5.2 Mobile as the purchase point for other media 5.3 Tablet shopping

5.1 AR in mobile shopping


Augmented reality is changing the way we view the world or at least the way its users see the world. It is blurring the line between what is real and what is computer-generated by enhancing what we see and it makes for some truly magical consumer experiences.
So, what exactly is it and how does it work? To put it simply, Augmented Reality (AR) is a virtual layer on top of a real-world environment, by which the virtual layer can be seen through the camera of a smartphone or computer. It relies on triggers, which are used to activate the virtual experience, and usually fall into two categories. Marked triggers are when a camera points at an image, a code, an object, or even a face, the virtual layer will then appear at that point within the screen; whereas Location triggers are applications which give relevant experiences, based on where the user is, predominately used for locating. Despite having been around in various formats for a number of years, Augmented Reality has struggled to reach mass appeal. Many have deemed it a fad, which isnt surprising when you consider its previous clunky, gimmicky and frankly pointless implementations. With new innovations in the mobile space and the advent of Google Glass, things may be about to change not least in the retail space. It is therefore time we marketers took a closer look at how we can unlock the true potential of Augmented Reality in the shopping environment. Historically, retail brands have used AR to drive excitement and create interesting media experiences for consumers. But what were seeing now goes much further than that actually enhancing the shopping experience and providing the customer with real value and relevance, which in turn helps them make purchasing decisions. This could work in numerous ways, one of which might be using AR to digitalise print assets, transforming static media into something immersive and transforming it into a purchase point. Tesco is one example of a retail brand that has done this, by making its magazines AR-enabled. As well as giving readers how-to videos and product information, the AR technology enables them to actually purchase ingredients listed in the magazine recipes, which is extremely useful for customers. Tesco have also been using AR to extend on pack information and raise awareness of new products. For the new ChokaBlock range, for example, customers could use the Tesco Discover app to scan the packaging, view a video of the ChocaBlok factory, find out information on the new range and share via social media.

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by Britta Anderson Head of Mobile, Ansible Mobile

Elsewhere, a new app from IBM Research allows customers to compare products on the supermarket aisle through image recognition AR. The technology will recognise individual products and rank them by price, and more excitingly by preference data. So, if a customer stipulated that they wanted low salt foods, products with low salt would show up higher in the rankings making it easier for them to analyse the shelf, without having to read every single food label. AR could also create some interesting experiences in the clothing sector. Virtual fitting rooms, for example, could mean you no longer have to guess whether a dress would look good on you. By uploading an image of yourself, entering measurements, or even scanning your body, you could see how an item looks on you without even leaving your bedroom. So, with all these interesting options available, why is AR still an emerging industry, still really only on the radar of us industry and tech-savvy folk? One reason is perhaps that to enjoy an AR experience via mobile, users need to download an app quite a big ask given the amount of AR apps out there. You have to have at least three to activate many of the out of home and magazine ads I see, plus you need to understand how to use it and have time to interact with it. Furthermore, many brands and AR advertising providers rely on a small logo or icon to communicate to users that they can enjoy an augmented reality experience. But I often question whether I would know what that logo represented, did I not work in the industry. To get over this hurdle, clear signposting is vital and education key. Customers need to know what they are going to get if they download an AR app (and it needs to be good). This brings me to the most important point. Once a consumer has reached the stage where they have understood what the AR will provide and have downloaded that app, it is vital that they get a useful, engaging and fun experience. Otherwise, whats the point?

Whilst there is still a place for custom experiences, especially around key holidays and events, becoming too gimmicky with AR could be detrimental to a brands image. Advertisers therefore need to invest in infrastructure that will allow for scalability, such as building multiple campaigns, and that will benefit customers and save money in the long run. So, whats next? I think in the next 12 months we are going to start seeing a move from AR being used to give customers a quick wow moment, to becoming a practical tool that gives customers meaningful experiences that have real outcomes. Using data to fuel those experiences will be key to making them relevant. I also think that the in-store and online shopping experiences will start to merge, so that soon we will have access to the same kind of customisation in store as we do online personal offers, recommendations based on previous purchases and even that virtual changing room.

An example of the clear signposting Tesco used on their Discover App

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5.2 Mobile as the purchase point for other media


Carrying a smart device in our pockets and purses has allowed for the real world to be transformed into a shopping window. Add mobile to the TV screen in our living room, underground escalator panels we glide past every day on the way to work or direct mail posted through our letterboxes and you transform something physical into a means of buying a product or service digitally
The mobility of smart devices means that I no longer need to wait until I get home or into the office to connect to the internet in a fixed location and research, compare or buy products. So long as I am connected via 3G/4G or WIFI and my device has ample battery, Im able to use the real world around me to move through the marketing funnel and shop. Decades of analysis and econometric modelling tell us that above-the-line media channels like TV, print and outdoor are hugely efficient in driving awareness, interest & consideration amongst consumers but now mobile gives advertisers and agencies the opportunity to close the marketing funnel by enabling purchase, bring a whole new layer of accountability to traditional channels. Take arguably the most traditional shopping journey of all the weekly grocery shop. When Tesco put this in context of returning from your summer holiday, they identified a) the inconvenience in not having shopping basket essentials like milk and bread to hand and that b) the majority of their stores might be open when you arrive back in the UK from your break. Mobile allowed them to flip the user experience, from shopping when you get back, to shopping for essentials before you fly in Gatwick Airport. Customers could interact with a digital panel displaying shopping essential images and use the Tesco app to scan each of them, put the items into their mobile basket then pick a suitable delivery time for when they returned from holiday.

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by James Chandler Head of Mobile, Mindshare

Another supermarket chain, Morrisons, activated their out of home formats as part of the Reading NFC test by asking consumers to tap the poster using their NFC-enabled smartphone. In doing so customers were given a 5 off voucher to redeem at Morrisons Reading. Results showed that this mechanic was a means of attracting new customers and that in-store redemption rate from the specific NFC poster were as high as 18%. Crucially, the Morrisons call to action and value exchange was executed well clearly stating what action a user needed to take using their NFC-enabled device and what they could expect from doing so. The value exchange is absolutely key to any sort of mobile mechanic that asks a user to actively take their device out and engage with your brand the reward must be strong enough Away from the high street and into the living room where mobile is transforming TV ads into 30 second shopping breaks. Last year, Unilevers VO5 hair range re-launched with an aim of creating emotional engagement their audience, drive advocacy and reduce reliance on promotions. As such, VO5 Shazam-enabled their 30 second TV ads which allowed them to drive viewers seamlessly from the TV screen to their second screen where they could watch YouTube how to video tutorials which showed how to get the look seen in the TV commercial. VO5 also added a click to basket option, allowing viewers to add VO5 products from the ad break into their preferred retailers basket to purchase. VO5 were the first beauty brand to trial this and saw that 2% of viewers of Shazamed the ad click through to purchase a hugely positive result versus an average desktop click-through rate of between 0.10-0.20%

Crucially though, mobiles interaction with other media channels turns passive consumers into active ones. Choosing to pull your smartphone out of your pocket then unlocking it, opening an app and scanning/ listening/hovering over a poster, newspaper ad or TV screen makes those users who do so incredibly valuable to brands and advertisers. The key is in making sure the call to action, user experience and value exchange are clear and genuinely demonstrate to a user what they can expect from actively engaging with a brand.

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5.3 Tablet shopping


The rise of tablets
The explosion in tablet ownership since the launch of the iPad in 2010 has added a new dimension to online retailing, and is creating opportunities which many retailers have yet to embrace. Tablet ownership in the UK rocketed over the past year to reach 24% of UK households by mid-20131, up from only 11% the previous year. With tablets often shared between several members of the same household, the number of people using tablets in 2013 is estimated at nearly 20 million2. This staggering rate of uptake is set to continue, as falling prices, a greater variety of devices and strong competition for Apple from the likes of Samsung, Amazon and Google drive further growth in the market. Adoption will be also boosted as businesses roll out tablets to employees as productivity tools.

Consumers are using tablets differently from other devices


It is becoming clear that consumers use their tablets in different ways from other devices, and this has implications for how online retailers should shape their digital strategies. While smartphones are often used in short bursts to find information quickly, tablets are typically used in the home in a context which is much more relaxed and leisurely3. The tablets screen size and touch interface lend themselves to visually rich, highly interactive browsing, rather than the more functional experience on a smartphone. And tablets are the perfect second screen companion for television Google found that 44% of the time that people spend on their tablet is while they are also watching TV3.

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by Alastair Nash Director of Strategy and Communications, Orange Digital

How tablets are changing the way we shop


So how are tablets changing the way we shop? Consumers are finding that tablets are an ideal complement to other devices as part of a multi-device shopping journey. Smartphones can be convenient for quick, impulse-driven research while on the go, but it is not always easy or desirable to complete the transaction stage on them. Tablets liberate people from their PCs or laptops, allow casual product browsing through the touchscreen and can offer a smooth user journey through checkout, providing that the site is optimised. The difference between the experience on tablets and smartphones is evident in conversion rates, which are typically two or three times higher on tablets than on smartphones. And the profile of tablet owners at this stage of their adoption also has implications for retailers. Tablet ownership is higher in some socio-economic groups than others, with 36% of AB households owning a tablet compared to only 13% of DE households1. Tablet owners, then, are currently a more affluent group than the average eCommerce consumer. As tablets become ubiquitous, tablet eCommerce revenues are forecast to more than triple in the next 4 years to reach 12bn by 20174.

12.1bn

Forecast for UK retail mCommerce by device type4


Tablet Smartphone 3.6bn 2.9bn 4.0bn

8.0bn

5.0bn

0.9bn

0.4bn

2011

2013

2015

2017
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Source: eMarketer Inc M-commerce takes 15% of UK retail e-commerce sales (June 2013)

Should retailers adopt a tablet-specific strategy?


The implication of the rise of tablets is clear: retailers need to adopt tablet-specific strategies to make the most of their eCommerce channel. Brands which continue to serve their desktop site or even a smartphone-optimised site or app to tablet users will be missing out on a valuable opportunity to create an experience which drives higher revenues and greater loyalty. A tablet-optimised solution will be perfectly adapted to the context in which consumers typically use them lean back, relaxed and at home. Given the unique combination of a relatively large screen with a touch interface, brands can create visually compelling and highly engaging experiences on tablets which are not possible on other devices. Rich content such as video works well, and fits into the broader context of tablets as an entertainment device. The tablets role as a popular second screen while watching TV can also create opportunities for brands, for example by using TV advertising to prompt interaction on the tablet. ASOSs Fashion Up iPad app is an impressive example of playing to the tablets strengths. This interactive weekly fashion magazine combines music, video and interactive images with a beautifully simple shopping experience.

ASOS Fashion Up iPad app

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Brands should also think about tablet users as a targetable consumer segment which is more affluent and often younger than average. It may be effective, for example, to promote higher value products on tablets than on other versions of the site. And given that many consumers like to use their phone for initial research, it should be easy to start a shopping journey on the phone and then pick it up and complete it on the tablet. Responsive design approaches which enable a single site to adapt to any device size can be an ideal way to approach optimisation for tablets, though it is important to think not just in terms of layout, but how the whole experience, including content and product promotions, should be tailored to the tablet user.

Final word
Tablets are quickly establishing themselves as a preferred device for online shopping. Brands which recognise that tablets should be treated as a distinct platform will reap the rewards of higher conversion rates, higher average transaction values and ultimately, happier customers.

1. 2. 3. 4.

Ofcom Communications Report 2013 (June 2013) eMarketer UK Tablet Use Sees Robust Growth (May 2013) Google The New Multiscreen World Understanding Cross-Platform Behaviour (August 2012) eMarketer M-commerce takes 15% of UK retail e-commerce sales (June 2013)

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With thanks to: Millennial Media Blis Media Sam4Mobile Affiliate Window EE Arena Media Burner Mobile OmnicomMediaGroup OpenMarket Google Somo Mindshare Adeven Ansible Mobile Orange Digital

Internet Advertising Bureau 14 Macklin Street London WC2B 5NF 0207 050 6969 info@iabuk.net @iabuk iabuk.net