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CONTENTS
PAGE 3 EDITORS NOTE: Mobile set to influence retail, on-device shopping By Mickey Alam Khan ADVERTISING Mobile advertising to drive mobile commerce sales By Giselle Tsirulnik ANALYTICS Analytics key to multi-platform mobile commerce By Dan Butcher APPLICATIONS Retail apps will be next-generation loyalty cards By Giselle Tsirulnik BANKING Anticipate strong consumer adoption of mobile banking By Giselle Tsirulnik CARRIER NETWORKS Carrier networks laying the groundwork for huge Isis launch By Dan Butcher CONTENT Content integration pivotal to mobile utility By Rimma Kats DATABASE/CRM Mobile database essential for driving direct commerce By Giselle Tsirulnik EMAIL Mobile-optimized email can be effective commerce-driver By Dan Butcher GAMING Mobile games as traffic driver? Worth a second look By Rimma Kats LEGAL/PRIVACY Greater focus on privacy is inevitable By Gonzalo E. Mon PAGE 24 LEGAL/PRIVACY Expect mobile and online behavioral advertising legislation By Adam Snukal MERCHANDISING Merchandise SKU and mobile store functionality are winning combo By Rimma Kats MULTICHANNEL RETAIL SUPPORT Thread multichannel assets for engagement with mobile consumer By Giselle Tsirulnik PAYMENTS End of premium SMS micro-billing? By Dan Butcher RESEARCH Top mobile commerce stats to remember in 2011 By Rimma Kats REVENUE Skys the limit for mobile commerce sales By Dan Butcher SEARCH Properly executed mobile search marketing will drive sales By Giselle Tsirulnik SOCIAL NETWORKS Consumers will respond to location-based social promotions By Rimma Kats SOFTWARE AND TECHNOLOGY Its all about Near Field Communication By Dan Butcher WEB SITE AND DEVELOPMENT Mobile Web underpins mobile commerces growth By Giselle Tsirulnik
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Mickey Alam Khan Editor in Chief mickey@ napean.com
Dan Butcher Associate Editor dan@ mobilemarketer.com
Jodie Solomon Director, Ad Sales ads@ mobilemarketer.com
401 Broadway, Suite 1408 New York, NY 10013 Tel: 212-334-6305 Fax: 212-334-6339 Email: news@mobilemarketer.com Website: www.MobileMarketer.com For newsletter subscriptions: http://www.mobilemarketer.com/ newsletter.php For advertising: http://www.mobilemarketer.com/cms/ general/1.html For reprints: reprints@mobilemarketer.com
Giselle Tsirulnik Senior Editor giselle@ mobilemarketer.com
Rimma Kats Editorial Assistant rimma@ mobilemarketer.com
Mobile Commerce Daily covers news and analysis of mobile commerce. The Napean franchise comprises Mobile Marketer, MobileMarketer.com, the Mobile Marketer Daily newsletter, MobileMarketingDaily.com, MobileCommerceDaily.com, MCommerceDaily.com, the Mobile Commerce Daily newsletter, MobileNewsLeader.com, Classic Guides, 2011 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission. webinars, the Mobile Marketing Summit and the Mcommerce Summit and awards.
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Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
EDITORS NOTE
Mobile set to influence retail, on-device shopping
his year marks a turning point in mobile commerce as more retailers realize that a transaction-ready and shopper-friendly mobile store is no longer an option but increasingly a necessity. Mobile commerces good days are about to begin. As Mobile Commerce Dailys Mobile Commerce Outlook 2011 shows, all facets of mobile are showing tremendous strength. Not suprisingly, mobile Web sites are leading the charge in mobile commerce, followed by applications and SMS programs designed to drive traffic to mobile and in-store destinations. This compendium is designed to help retailers and marketers navigate the world of mobile commerce this year. For followers of ecommerce, the landscape looks awfully familiar to the early days of the Internet: lack of standards, clunky interfaces, difficult transaction process and page pull-up speeds that dont meet the demands of todays impatient consumer. But a little patience and lots of best practice will resolve most of these salad-days issues for mobile commerce. In this Outlook, senior editor Giselle Tsirulnik, associate editor Dan Butcher and editorial assistant Rimma Kats have ably outlined what to expect in mobile commerce this year. Each article is worthy of a serious read. Many thanks to them and to those industry experts and columnists who helped for their hard work and also to Rimma for her art direction on this edition. Skys the limit for mcommerce The mobile commerce opportunities for retailers are several. First, mobile expands the number of channels for retailers. Contrary to what the Internet did to other channels such as the catalog, mobile will have an incremental effect on overall retail sales, and not cannibalize ecommerce. Second, mobile adds legs to other channels. Expect mobile tactics such as SMS marketing to drive traffic to stores with incentives such as coupons, alerts, discounts, new-merchandise updates and store openings. Third, mobile adds a social element to the shopping experiPAGE 3
ence. Happy shoppers will tweet, Facebook Like or post positive comments on feedback pages if the retail experience on mobile or in-store was satisfactory and more. Fourth, mobile allows for price and product comparison on the spot. While this is a double-edged sword after all, Amazon is poised to become the de facto mobile comparison shopping engine for mobile commerce it also offers a new layer of transparency to the shopping process. Fifth, mobile is an excellent marketing channel for retailers. Its potential to add to the overall customer loyalty program is mouth-watering. If there is one area that retailers are neglecting it is this: they are not moving fast enough to capture opt-in mobile numbers to market to consumers. A CRM program without a mobile component is an incomplete program. It is a must to communicate with customers in the channel they are most comfortable with, and that today is mobile via SMS and email. Remember ecommerce? Of course, mobile still has issues such as security concerns over transactions on the phone and lack of frictionless payment options unless the mobile store relies on the consumer data stored on the ecommerce site. Add to that screen size, page load and site and application design and utility issues that need to be resolved and, of course, the back-end infrastructure that needs to tie into the ecommerce engine for order fulfillment, returns and everything else. Having seen the Internet and ecommerces growth since the early 1990s, this writer has little doubt that mobile commerce in 2015 will be every inch as sophisticated as ecommerce in 2011. This year marks the first long stride toward that possibility. Let the Mobile Commerce Outlook 2011 embolden retailers and marketers to sprint ahead in mobile commerce.
Mickey Alam Khan mickey@napean.com

ADVERTISING
Mobile advertising to drive mobile commerce sales

By Giselle Tsirulnik
etailers and brands will this year rely heavily on calls to action that link the consumer to the store nearby mobile advertising to drive traffic to their mobile are key. commerce-enabled Web sites and applications. While much of this advertising will drive direct converEBay and Amazon alone generated more than $2.5 bil- sion to commerce, even more will drive people into the lion of mobile commerce sales in 2010, so the opportuni- stores or toward permission marketing relationships for ty is proven. While the market is clearly exploding, most future conversion. major bricks-and-mortar retailers and manufacturers are only now building their mobile storefronts to tap into 3. Social media. The easy integration of social media calls to action within the mobile ad campaign are critical. mobile commerce. While many of these brands in 2010 used to buy the shiny-object marketing tactics for mobile, many of them are moving to performance-driven mobile marketing combined with mobile storefronts in order to effectively execute against the huge opportunity that mobile commerce presents, said Anne Frisbie, vice president and managing director of North America at mobile ad network InMobi, San Mateo, CA. While the selling of digital goods via mobile devices represents a huge opportunity, mobile campaigns should also be leveraged for influencing offline purchases through the sign-up of consumers to sales and offers or calls to action that allow store location lookups or the ability to phone your local store, she said. Staying on track The winning mobile advertising strategy for retail commerce in 2011 contains the following three elements: 1. Tracking and optimization. Many players currently take a spray-and-pray approach to mobile advertising. What is needed is a mobile-optimized storefront with back-end measurement of conversion and optimization based on that knowledge. 2. Local. One of the best applications of mobile is its local advertising capabilities. Yet many brands and retailers have not truly embraced it. Promotions, events and new products and services with Again, these possibilities are present, but not really tapped by brands. Strong narrative The infatuation with iAd and other mobile advertising plays built exclusively on high-end ads will end quickly,
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InMobis Ms. Frisbie said. The real promise of mobile Microsoft, Redmond, WA. is now unlocking namely, engaging ads that will be easy to build and implement such as videos, expandable As a national brand, I want to drive sales of my product across my retail channels, Mr. Glavin said. and interstitials. Scale and performance is the real value of mobile advertising to retailers, combined with these compelling creative opportunities, she said. In addition to reach with impact, the key to fully unlocking mobile commerce is the call to action. Campaigns can once again tell a story not unlike TV and radio and offer consumers multiple ways to engage. Full use of these calls to action and creative storytelling will help consumers discover and convert. As a retailer, I want to drive consumers who want that national brand into a particular retail store but not its competitors store, he said. There will be some natural friction between these two important players in the retail ecosystem. Theres a big opportunity for retailers who are able to leverage national search advertising in their local campaigns.
Best practice It all starts with having a mobile-optimized and meaThat said, there are challenges ahead for brands and sured storefront. Drive traffic to it using mobile advertisretailers, according to Dennis Glavin, manager of the ing, Ms. Frisbie said. North American mobile search advertising business for Second, execute at scale. Timid trial buys will only put brands behind their more aggressive competitors. Third, incorporate social media. The extension of ROI is critical and it ties to the most important use of the mobile phone. Next, tell a story through creative. Mobile actually offers the ability to send multiple impressions in a short time, often with 100 percent share of voice. Finally, in terms of mobile search advertising, retailers and brands need to understand what their value proposition is to the mobile search user, Microsofts Mr. Glavin said. Mobile consumers are looking to search, find and transact quickly, Mr. Glavin said. From there, the next step is to construct a mobile campaign and landing page strategy that best delivers that immediate action to mobile consumers. The value of the landing page whether its product information, a local store locator or a special offer needs to be an integrated part of the paid mobile search campaign, he said.
PAGE 5 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
ANALYTICS
Analytics key to multi-platform mobile commerce

By Dan Butcher
ommerce transactions conducted via the mobile Web and applications require their own unique analytics, and this year will see more sophisticated measurement both within the mobile medium and across channels.
case, youre running essentially traditional Web analytics, said Oren Michels, CEO of Mashery, San Francisco. Youre doing the same analytics as youd be doing on a desktop browser. In the second instance, an app is involvedone version is someone uses an app and that app internally completes a transaction, for example, booking a ticket within the American Airlines app, he said. In the third version, I go to an app, and it doesnt let me do a transaction inside, but it helps me find what I want.
While transactions on the mobile Web can often be tracked in the same way as they are on the PC Web, inapplication transactions and applications that redirect users to a commerce-enabled mobile site have to be handled differently.
If youre talking about mobile commerce, there are When I want to complete a transaction, I click in three basic conceptsthe first is the mobile Web brows- that app, and suddenly Im taken to a browser page to er experience, a site that people buy stuff on, and in that complete the transaction.
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Mobile transactions In the second example, where it is a pure in-application transaction situation, merchants need to be able to track what is happening in that application. Applications do not run JavaScript, so it is not traditional analytics. Applications are built on application programming interfaces. Therefore, merchants need to know the underlying APIs on which these applications are based. The third hybrid case is common. Many applications are currently being built around data APIs, so that when it is time to do the transaction, they redirect consumers to a Web page because it is easier than building purchasing capability into the applications API. You have to bridge the two analytics, Mr. Michels said. You can get only Web analytics, but to get the full picture, you have to join the two experiences and know whats happening between the two experiences. All about APIs Most companies have not been able to open underlying APIs that perform commerce, per Mashery.
Best Buy has announced that it is doing API-enabled commerce, so that developers can build applications on I think that when you look at how mobile apps are goBest Buys API that enable transactions. ing to become a much more significant and dominant component of merchants overall ecommerce stratSmarter companies are going to have many different ap- egy and market share, youre going to need the abilplications that they use as customer engagement, mar- ity to track many different partners, whether internal keting and customer retention tools. or third-parties, he said. You have to track a bunch of different people doing a bunch of different things Even more so than in 2010, applications this year are for you. going to be treated as the marketing platforms that they are. You cant just have one app that runs on every platform, even on individual platforms. A great app is one Also, publishers and developers will continue to try that grants a wish around a particular experience and different tactics to generate revenue. makes it easy.
The concept of being able to roll out bunches of different app experiences on different platforms is pretty rare right now, but looking at 2011, I see that changing, Mr. Michels said. If you look at the demands were seeing from our API customers and enterprises, in 2011 youll see a ton of explosion of commerceenabled APIs.
APPLICATIONS
Retail apps will be next-generation loyalty cards

yber Monday 2010 was proof that mobile has quickly become an option for consumers to buy goods and services, with sales jumping 300 percent from 2009.
Purchases from tablets such as the Apple iPad are also going through the roof. Without doubt, mobile applications will continue to be the best experience for discovery and purchasing as well as tying into social networks. Its important to note that mobile continues to be more effective in driving in-store purchasing than mcommerce, said Scott Dunlap, vice president of mobile at JiWire, San Francisco. This will be a great place for retailers and brands with good distribution to differentiate themselves. By years end, it is expected that half of the population in the United States will use a smartphone, according to Amsymco. As a consequence, more retailers will develop branded rich applications for iPhone, BlackBerry and Android devices to reach and develop a personal relationship with their most loyal customers. Consumers will look to retailers to create even more value in their mobile shopping experience through the rich app by making the app the next-generation loyalty card that could allow for store check-in, special offers, bar code product lookup, ratings and reviews, and product videos, said Dan Lowden, vice president of marketing at mobile commerce platform provider Digby, Austin, TX.
A retailer or brand can launch its own application, but rarely does it reach more than 100,000 people, per Mr. Dunlap. What we will see in 2011 is the widgetization of mobile application functionality, where an entire app can be presented in an ad format, Mr. Dunlap said.
The new rich app features will be an asset to retailers and create tremendous value with shoppers as they will wonder how they ever shopped without their smart- IAd is a good example of this rich functionalphones, he said. ity in an ad that can do anything a mobile application can, but instantly distributed to millions of people, Widgetization of mobile apps he said. The biggest challenge with applications continues to be how to reach enough consumers to move the needle for Location will continue to be a catalyst for making other a large business. Internet-based models more effective on mobile.
Digbys Mr. Lowden said a challenge for retailers is that there are third-party location-aware mobile applications that can actually pull customers away by doing price and product comparisons. A retailer has the opportunity to overcome these thirdparty applications by delivering its own retail-branded mobile application that can provide unique and valuable experiences to customers so that its application is preferred. Features and deals only offered through the retailers app can help build a closer, more personal relationship with customers and drive incremental revenue, higher average dollar order transactions, more frequent customer interaction and higher conversion rates, Digbys Mr. Lowden said. Retail detail Retailers need to choose a mobile application strategy. Will it be about getting new customers, or increasing sales with existing loyalists? Mr. Dunlap said that those focused on new customers should consider mobile advertising and widgetized applications. For a loyalty play, create a mobile application that rewards loyalists for in-store visits and sends regular content. If you dont have the budget, dip your toe in the checkin apps such as Foursquare, Gowalla and shopkick, Mr. Dunlap said. Digbys Mr. Lowden said that retailers should review what mobile device types are already connecting to their mobile site to determine which mobile platform is most appropriate for their customer base. By matching the application to the demographic of the customer base, retailers can see which rich app to focus on initially, Mr. Lowden said. From there, the retailer can leverage the mobile commerce platform to easily add additional apps over time.
BANKING
Anticipate strong consumer adoption of mobile banking

he consumer-driven movement towards mobile banking will continue this year and beyond. Account alerts, deposit and withdrawal confirmations, transfers, payments and two-way personalized communications are just a few of the ways the mobile medium is expanding the definition of selfservice banking.
Michele Rene Scott, vice president of online and mobile banking communications at Wells Fargo, San Francisco. In addition, the usage rates of active mobile banking customers will increase across mobile Web site banking, app banking and text banking services, she said. Can numbers translate? The United States counts 270 million consumers as mobile phone subscribers, according to CTIA The Wireless Association. Of these subscribers, 80 percent keep their mobile devices with them at all times.
Mobile banking empowers consumers by giving them on-demand access and real-time information to securely manage their finances.
We anticipate continued strong adoption by our customers, fuelled by adoption rates of smartphones and According to Diebold Inc., mobile banking offers opporapp stores, and generous data and messaging plans, said tunities to realize operational efficiencies and cost savings by empowering customers to handle basic transactions and inquiries from their mobile phone, as opposed to waiting in line for a teller or ATM, or contacting a customer call center. Mark Reinart, mobile banking solutions manager at Diebold, North Canton, OH, said that a comprehensive mobile banking program provides numerous opportunities for both financial institutions and consumers to gain significant benefits and efficiencies. Financial institutions must undertake several steps to ensure that they are investing in a service that their customers want and will use. One challenge to achieving a valuable mobile banking solution is the need for financial institutions to evolve existing infrastructure and develop an open system that can securely incorporate the latest technologies and functionalities, Mr. Reinhart said. Multichannel integration An important part of the mobile banking evolution is multichannel integration. Through the integration of a financial institutions various channels, customers have the ability to make purchasing and account transfer decisions based on realPAGE 10 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
time information shared by the mobile, online, branch or self-service channels. Multichannel integration is at the foundation of the drive to give customers a consistent look and feel across every channel. It is also an important tool for customer retention, since financial institutions will have the ability to deliver consistent messages across every channel to educate customers about available services.
and implementing a strong consumer adoption plan from day one. A successful adoption plan includes developing criteria that lists specific target adoption goals such as assigning a project team with defined roles and responsibilities, providing marketing materials to current and prospective customers and ensuring that staff is trained and available to help customers learn how to use mobile, per Diebold.
In 2011, mobile banking will become even more mainOptimizing customer experiences for a range of stream as a channel of choice for customers, and cusdevices and their user interfaces, including tab- tomers will want more availability and more account lets, while ensuring broad-based access to bank- details, Wells Fargos Ms. Scott said. ing for all customers regardless of their phone type or data or messaging plans [is key], Wells Fargos Ms. Institutions need to listen to customers through multiple research channels, she said. Scott said. Financial institutions should continue to optimize the mobile banking experience to take advantage of larger screen sizes and touch screens in 2011, she said. Finally, continue to rank banking functionality by customer demand and utility. Think of cross-channel solutions and take advantage of the device capabilities such as GPS, image capture and mobility. A major theme this year will be multichannel integration. Signup for mobile banking services typically occurs only through the online channel. However, only 35-40 percent of financial institutions customers use online banking. By utilizing multichannel integration, mobile signup can be offered and tracked conveniently and securely at the ATM, in a branch office, on a mobile device, with a customer service representative or through an institutions interactive voice response system, Diebolds Mr. Reinhart said. Adopt to adapt For a mobile banking program to be successful, financial institutions must realize the importance of developing
CARRIER NETWORKS
Carrier networks laying the groundwork for huge Isis launch

By Dan Butcher
arrier networks last year in the United States finally realized the importance of mobile commerce, and this year will work together to lay the groundwork to try to create a nationwide standard for contactless mobile payments with Isis.
Isis is a joint venture between Verizon Wireless, AT&T and T-Mobile USA, with participation from Discover Card and Barclaycard. While the carriers are running initiatives related to mobile commerce outside of Isis, whether it is activities around bill-to-mobile and carrier billing for mobile content and virtual goods, Isis is certainly the most meaningful venture for three of the top four U.S. carriers. I think 2011 really marks the point of ignition for mobile commerce and payments, certainly with the Isis announcement, but also announcements from mobile OEMs and OS-makers around NFC, said Jaymee Johnson, spokesman for Isis, Bellevue, WA. Isis has paved the way by guaranteeing a market for that technology. In 2011, we will see more contactless acceptance, which has been a barrier, he said. Many of the big POS terminal-makers are including NFC by default in most of their new hardware, so that constraint begins to fall down as merchants replace pin pads and signature capture padsthe replacements will be NFC-enabled. Some of the infrastructural hurdles that have dampened or prohibited uptake of mobile commerce will begin to fall in 2011.
priority No. 1. Mr. Johnson said that this is really the year where all of the infrastructural development for mobile commerce, in general, as well as from the carriers standpoint, will begin to be put into place. NFC-enabled handsets and hardware will become standardized in the market over the course of the year, per Isis. That will pave the way for a running start in 2012, where these things are actually out in the wild at scale in significant numbers, Mr. Johnson said. 2011 is the year of building, 2012 will be the year of launching.
While Isis marks the most significant attempt by the carNFC and RFID riers to create a mobile payments standard, fragmentaAlthough it is not set to officially launch until Janu- tion will persist throughout the year. ary 2012, carriers have much to accomplish over the course of 2011, with Near Field Communication and Carriers collaborating on Isis radio frequency identification (RFID) infrastructure as With Isis, AT&T Mobility, T-Mobile USA and Verizon WirePAGE 12 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
Rough seas or Isis? At first blush, Isis seems formidable. However, independent players in the mobile commerce and payments space should not despair. Some analysts see the Isis rollout as too deliberate. We may see some market tests, but I predict that theyre going to be relatively isolated, Mr. Schropfer said. I dont see any meaningful market penetration in 2011, no meaningful share of transaction volume through the mobile commerce channel. Isis will have a big role in moving conless, along with Discover and Barclaycard, are teaming up tactless mobile payments forward in to rollout a national mobile commerce network that will 2011, because for the first time, 70 percent of the mobile let consumers use their mobile phones to make point-of- phones in the U.S. will be able to use the exact same sale purchases. standard, he said. The initial focus of Isis will be on building a mobile payment network using smartphone and near field communication (NFC) technology to streamline the payments process for consumers and merchants. Isis expects to introduce its service in key geographic markets towards the beginning of 2012. Frankly, I see carrier participation in mobile payments not impacting retailers in a meaningful way this year, said David Schropfer, partner at The Luciano Group, Red Bank, NJ. This year there will not be a significant number of calls-to-action other than participating in tests. The carriers will position themselves in 2011, but I dont think it will have an impact on 2011 on any of their businesses, he said. Isis may not even have a market test in 2011. They are predicting 18 months from the time of the announcement, so there might not even be a single application in market at all this year.
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Thats a big deal for merchants, because it will give them one standard to focus on, rather than many. A lot of innovation can happen in a years time, and the carriers need to move forward with a sense of urgency to stake out a dominate position in the mobile commerce ecosystem. Similar to this year, the carriers will face significant hurdles in 2011, from the dominance of the App Store, the influence of OEMs over consumers, slowbuilding consortiums and a lot of initiatives to sort out, said Josh Martin, senior analyst at Strategy Analytics, Boston. Carriers have talked about developing mobile implementations, from the Wholesale Applications Community to Isis, which tend to be grand ideas that are slowdeveloping, he said. If any of those come to fruition, it puts them in a better position, but usually the way things work is that theres a lot of talk and then when theres money to be made, they start squabbling.
CONTENT
Content integration pivotal to mobile utility

By Rimma Kats
ntegrating social media and location-based services into mobile content will be an important trend this year.
Marketers such as State Farm and Amazon as well as book publishers are taking their content to mobile handsets and creating interactive user experiences. Brands need to realize that mobile should be an integrated part of a companys overall marketing and sales strategies, rather than an afterthought. Its important to consider mobile user behavior when creating the best possible customer experience, said Nick Taylor, president of Usablenet, New York. This means identifying the most important features for the customer on-the-go, and creating a user interface that is mindful of a much smaller screen, he said. Brands should make easily accessible those features that reflect the most immediate on-the-go needs.
According to Mr. Taylor, brands looking to expand their content to mobile should not only look at iPhone, Android and BlackBerry devices, but also tablets. Tablets will require their own optimized experience as consumers increasingly use those devices to access company sites. Content with context As mobiles significance grows as a medium, retailers will need to create specific marketing strategies and promotions to maximize this new opportunity. Companies including State Farm are offering services
Apps need not ape Users accessing Apples App Store or Googles Android Marketplace can view many applications that fit their lifestyle needs, but to catch a consumers attention marketers must remember to create a consistent feel. A brands application need not mirror its Web site, but should incorporate key content features. Maintaining consistent information and functionality from their existing Web site to mobile is important for an adequate mobile content strategy, Usablenets Mr. Taylor said. Customers are easily frustrated and are always oneclick away from not completing a transaction. So creating an effortless mobile commerce experience is necessary, he said. A great example is keeping log-in information and customer history interchangeable across channels. such as talking or finding an agent and getting on-theThis allows a customer road assistance to consumers via a mobile application. to start the shopping Indeed, brands are realizing the potential of mobile and process online, and incorporating key content Mobile Commerce Daily MOBILE be able to seamlessly features in their mobile-optiCOMMERCE mized sites, applications and calls to action. OUTLOOK 2011 complete this process on their phones later, Incorporated features include social functionality, per- and vice versa. sonalized coupons and content, information about the brand and what it stands for and also data capture, Mr. Taylor also said that it is very important to have tracking for ROI and user behavior. where consumers can sign up for more information. Mobile content such as video is also becoming popu- Consider integrating key Web features and functionallar, especially with the proliferation of HTML5 and ity into both mobile Web sites and branded apps, Mr. Taylor said. rich media.
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DATABASE/CRM
Mobile database essential for driving direct commerce

roper, consistent and measured uses of databases said Andrew Koven, president of ecommerce and cusare critical success factors for mobile marketing tomer experience at footwear retailer Steve Madden, and customer relationship management, which in New York. turn, can drive mobile commerce sales. When it comes to mobile, consumers want instant reRetailers this year will be marketing heavily to their opt- sults, he said. But heres the risk fail to deliver and ed-in mobile subscribers to push them to make mobile I think the consumer will move on to another option commerce transactions. Order shipment notifications that does. and quick response to questions driven by a click-to-call feature or a live chat capability will be the new norm, There is little room for failure in mobile as its a missionwhile delivery of right offers and information to the right critical medium. places on time will be requirements. Top database There is little room for delays and misses in mobile, Taking the time to test ideas and strategies to estab-
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lish a strong database with the proper levels of customer information leading to a high degree of segmentation are key callouts for mobile databases, in particular, per Mr. Koven. Consumers currently receive mostly general discount messages from major retailers. But that may have to change.
Using the mobile database to build out a social media strategy will also be key. Getting consumers to join a retailers Facebook of Twitter page, for example, will be one trend to expect as this year progresses. Discounts and rewards via mobile challenges to mobile database members will be a hot trend as well.
Ive stopped looking beyond professional interest as a consumer, its not as meaningful strategically, Mr. Koven How to target mobile databases in 2011 is really a bigsaid. I believe as retailers that we can drive sales when ger, multi-part question, Mr. Koven said. we send information that makes sense beyond coupons Specifically, what tactics will be used to build the moand this will take time to strike a balance. bile database first, leading to more sales, which can be Sending discounts to consumers as the default standard made directly via mobile or originated via mobile and use of the database is a slippery slope which Mr. Koven consummated in a store or online., he said. thinks leads to a false-positive read for the long term. We will see branded content, contests, private sales, loRetailers should be developing strategies that excite, en- cation-based alerts, discounts, style tips, how-to videos gage and endear consumers to the brand more so than a and special offers for sure. deal. Yet this will take time. Mr. Koven said retailers need to do a much better job of building their mobile databases from the get-go. Its essential as a marketer and customer-experience builder to realize the value of a mobile phone number for long-term CRM, and that building a mobile database is essential for the future of direct commerce and communications, Mr. Koven said. then tap Mobile coupons, alerts for flash sales and special offers are obvious drivers of sales and will continue to be used this year and beyond. Location-based mobile rewards to opted-in consumers will be key in 2011, as geography plays a big role in driving consumers in-store. Expect to hear a lot in terms of geo-fencing.
EMAIL
Mobile-optimized email can be effective commerce-driver

By Dan Butcher
hile SMS, MMS, the mobile Web, applications growth in the retailers and deal-finding Web sites using and social media are all growing steadily, mo- email marketing to catch mobile consumers, said Debobile email will remain an effective means to rah Hall, managing partner at Web2Mobile, Toronto. drive commerce this year. The opportunities are to offer consumers an end-to-end Email is still an important notification and communica- purchase experience that is fully optimized for mobile tion vehicle for consumers, so there will be continued, to allow users to find deals on the go and buy products exponential growth in the number of people checking when and where is convenient for them, she said. their email on mobile devices. Now that more than 25 percent of consumers in the United States have smart- Render bender phones, the use of email is increasingly important for While no one doubts the opportunities that mobilemarketers to consider. optimized email communications offer, some potential pitfalls remain. In the last few months, there has been significant The issues and challenges for marketers are to get the appropriate technology in place to be relevant for consumers and to make the user experience on mobile devices seamless, per Web2Mobile. Rendition of email on different mobile clients continues to be a challenge. Many email clients block images, thus rendering ads and images ineffective in emails read on many smartphones. Also, to make a mobile commerce experience seamless requires choices and decisions of what products to serve and whenit cannot be a mirror of a desktop experience. There are several factors that marketers, retailers and merchants need to keep in mind, given that many emails will be viewed by their target consumers on a wide variety of mobile devices. The most important thing to keep in mind is not to replicate a desktop experience, Ms. Hall said. Mobile users want wonderful deals and they want relevant content. Choose fewer, targeted offers and see what appeals to the mobile user base. Mobile users have different behaviors and can be a lucrative, spontaneous audience if the content is delivered
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How, when, where, what Marketers must always make sure that their email communications have contextual relevance for consumers. More consumers have smartphones loaded with applications. And with those powerful Web-enabled devices, consumers will increasingly dictate the terms of online communication, per Message Systems. Its already happening and will accelerate in 2011, said Dave Lewis, chief marketing officer of Message Systems, San Francisco. Look to the recent Facebook announcement as to where online communication is headed. In a real sense, [consumers] are redefining the boundaries between the offline and online experience, and that is certainly a trend that will accelerate and take new forms in the year ahead, he said. The opportunities and challenges for marketers in reaching customers via mobile email are the samerelevancy. Marketers who are tuned-in to the wants and needs of their customers and deliver messages how, when and where they want them will break through to success. appropriately, she said. Those who do not will be left to explain their dwindling returns and declining brand loyalty stats.
There will be a higher sense of urgency for brands and While success demands greater segmentation in targetagencies to mobile-optimize their email campaigns ing, it will also require attention to how the message is this year. constructed for viewing in a mobile environment, Mr. Lewis said. Marketers may have had time in 2010 to test and implement programs to see what works. Now, there is no lon- And given greater access to various applications and ger time to take a leisurely approach to mobile email. social connections, the broader context in which the message is delivered and viewed cannot be ignored, If your sites and emails are not optimized for mo- he said. bile, your customers will go to your competitors, Ms. Hall said. Marketers will need to think more holistically about ways to influence and leverage that context in promptConsumers do not have the patience to wait on bad ing response. In short, its not just about email anymore, experiences, she said. and marketers need to look beyond it.
GAMING
Mobile games as traffic driver? Worth a second look

By Rimma Kats
lert marketers are noticing positive trends in mo- Earlier this year, appssavvy worked with H&M to drive bile payments for digital goods and engaging con- in-store visits by leveraging check-ins at relevant locasumers via mobile campaigns and applications. tions near bricks-and-mortar stores, Mr. Victor said. We did the same with Powermat. The rise of applications and location-based services are set to change gaming in the mobile commerce channel. The campaigns were wildly successful, he said. AdGaming sites and social networks are creating a huge ditionally, social activities like recommending things demand for user-friendly purchase mechanisms. to friends, providing product reviews in communities or sharing relevant videos will continue to move to the In 2011, we suspect a rise in mobile Web applications, mobile device. said Robert Victor, vice president of product and strategy at appssavvy, New York. Look at Facebook they This year, retailers will be able to work with informed, havent created an iPad application yet and Im not sure social consumers to help make the best purchase decithey really need one. sions and merchandise over the social graph right at or in close proximity to a point of purchase. Games, location-based services and productivity tools will still require the raw power and access to the phones services like GPS provided in downloaded applications, but lighter social communications platforms like Twitter and Facebook may be able to gradually move back to the Web, he said. Untapped games Mobile location-based services are an untapped resource for retailers, per Mr. Victor. Appssavvy used location-based services in a Powermat campaign where it rewarded consumers for in-application activity and interaction with its brand in Booyahs MyTown location-based game. Additionally, retailers such as Swedish trendy apparel chain H&M use mobile games to drive awareness of their new fashion line. In the case of H&M, consumers were encouraged to check-in to stores or nearby locations to earn points that could be used to buy branded H&M virtual goods in the application. The campaign delivered 10.6 million branded impressions.
Like social Financial services firms such as Barclaycard target consumers via mobile branded applications.
communities, and participating in social games, he said. Other than device improvements, an important catalyst to the move back to Web applications is Facebook continuing to make it easy to leverage the graph on mobile.
The marketer rolled out a Rollercoaster Extreme game that lets consumers play with other players and share Were building support for brands to connect with people through social activities across all of these platforms. their scores. Branded games can help a company get the word out about a certain campaign, but at the same time, engage users. Mr. Victor recommends that retailers leverage social activities in their mobile games.
Let people share their purchases with friends and creSocial and communications applications will continue ate utility by advertising within social activities, Mr. to grow quickly on mobile devices, Mr. Victor said. They Victor said. will be split between utilities in applications like FourImproved mobile devices and access to high-speed data square and connection services like Twitter. connections has opened up an amazing opportunity with People are performing activities with their friends like portable social activities, he said. Every brand, not just watching and sharing videos, joining and participating in retailers, can greatly benefit from this phenomenon.
LEGAL/PRIVACY
Greater focus on privacy is inevitable

By Gonzalo E. Mon
t is rarely easy to figure out how old laws will apply to new technologies, so when marketers start experimenting, lines inevitably get crossed, legal challenges follow, and the legal landscape changes.
tion collection and sharing on mobile devices carriers, operating system vendors, applications and advertisers should provide meaningful choice mechanisms for consumers. Third, companies should improve the transparency of their privacy practices. The FTC cites privacy policies in the mobile context as a particular problem. Because of the limitations on mobile devices, a privacy policy can be spread out over 100 screens.
Mobile is no exception, and the past few years have seen a number of battles over how marketers make disclosures and get consent. Although we can expect these battles to continue, it is likely that we will start to see a greater focus on privacy this year.
Agency of change On Dec. 1, 2010, the Federal Trade Commission issued a The FTC urges companies to come up with simpler preliminary staff report on privacy. policies so that consumers can more easily read and The report proposes a new privacy framework and makes understand them. three key recommendations. Although not primarily focused on mobile marketing, the report includes examples of how each recommendation applies in the mobile context. First, companies should integrate privacy into their regular business operations at every stage. For example, if a mobile application provides traffic or weather information based on location information, it does not need to collect contact lists or call logs from a consumers device. Second, companies should provide privacy choices in a simpler manner at the point of data collection. For example, when consumers download a mobile application, they may not know whether personal information is shared with third parties. The FTC notes that all companies involved in informaPAGE 22
The FTC invited the public to file comments by Jan. 31. Among other things, the FTC asked whether the rules should be different in the mobile context. Mobile marketers may want to take this opportunity to provide input.
view the Mobile Marketing Association guidelines for instructions on getting consent. Many companies have also gotten in trouble for failing to clearly disclose offer terms. For instance, the Florida attorney general has challenged companies that advertised free services, but buried costs in the fine print.
Disclosing costs in the fine print is unlikely to satisfy laws in any state instead, costs should be The FTC is separately considering whether the Childrens presented in the main Online Privacy Protection Act should be updated to deal body of the offer. with mobile issues. Many of the companies COPPA generally requires Web site operators to ob- challenged by Floridas tain verifiable parental consent before they collect, top cop agreed to pay $1 use or disclose personal information from children million or more to settle under 13. the investigations. Although the FTC was due to review its COPPA Rule in 2015, the FTC announced that it would begin its review in 2010 to deal with rapid advancements in technology. Some wireless carriers have also agreed to include provisions in contracts with third parties that dictate how certain disclosures must appear.
Disclosures and consent Make sure you consult these settlements and the carrier In recent years, marketers have gotten in trouble for contracts when making disclosures. failing to get consent before sending text messages to consumers. As technology continues to change, the mobile medium is going to offer marketers more opportunities to interact In a series of lawsuits, courts essentially determined that with consumers. (a) many text message campaigns are subject to the Telephone Consumer Protection Act, even though that But where marketers see exciting opportunities, many law was enacted long before the advent of SMS, and (b) regulators may see red flags. the law requires companies to get consent before sending text messages. New regulations and enforcement actions may be on the horizon, so marketers must remain vigilant and be preThe costs of getting this wrong can be high. pared to adapt to changes in the legal landscape. For example, one company paid $7 million to settle accusations of sending unsolicited text messages. Fortunately, it is relatively easy to avoid these problems. ReGonzalo E. Mon is a Washington-based partner in Kelley Drye & Warrens advertising and marketing law practice. Reach him at gmon@kelleydrye.com.
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LEGAL/PRIVACY
Expect mobile and online behavioral advertising legislation

By Adam Snukal
lthough 2010 did not mark the year in which the mobile industry saw the passing of watershed legislation or game-changing technological innovations, it laid the foundation for what is to come this year and beyond.
While I am a firm believer in self-regulation in the area of online and digital behavioral advertising, current efforts in this area may not be enough to stave off legislation. Geo is targeted Between the two separate consumer privacy-focused bills currently pending in Congress and all of the privacy reports, summaries and studies that seemingly get released in droves these days by one agency after another in Washington that assumes or better said, presumes it has a voice in the privacy debate, this year will inevitably see some form of privacy legislation privacy is low-hanging fruit. being passed. Moreover, with a squabbling Congress and a Republi- Do not be nave and underestimate the effects and concan Party that earnestly needs to prove it can balance sequences that privacy legislation will have on mobile. the welfare of U.S. consumers as well as the economy, Geo-targeting has already been tagged as one of the areas that legislators see the need to protect. Year of inflection That said, mobile will this year finally get the credit it deserves. As an attorney who represents advertisers, agencies and networks, I am now seeing a major increase in the number of mobile-related campaigns, projects and deals that come across my desk. Mobile media-buying terms now seem commonplace in media buying agreements. Mobile site development agreements have replaced the seemingly ancient Web site development agreements, and networks are now pushing mobile to their advertiser clients with vigor.
This, coupled with continued exponential growth in mobile surfing, texting and usage rates, leads me to believe 2011 will be a year of inflection for mobile. New page for privacy Who does not have a Facebook page? By the end of 2010, the number of Facebook members exceeded 500 million, with more than 220 million of them accessing the network via a mobile device. If Facebook were a country, it would be third in size, trailing just China and India. The social network is set to close in on 600 million users this year. The Facebook data banks have more information on us than any other source worldwide, including your local DMV. I expect we will figure out how to monetize both online and mobile social media more effectively this year, while at the same time establish regulatory pa- that require better substantiation, testimonials and enrameters for these platforms in the areas of data privacy dorsements that require more narrowly tailored discloand behavioral marketing. sures, ads about mortgages, credit cards or free checking, bloggers who need to be transparent or anything Maybe that will force Facebook to finally figure out a green-related, make sure you have sound legal advice. privacy policy that works. Mobile profits causes Vet blanket Finally, we saw throughout 2010 the power of causeAlso, this will be a year where the Federal Trade Commis- related marketing. sion and the United States will get back to basics. By that I mean, advertisers and agencies need to be prepared to Between the floods in Pakistan, the earthquake in Haihave advertising reviewed, vetted and even litigated. ti and political campaign contributions, social media and the mobile device took on another dimension a We are seeing a return to consumer protection enforce- channel for giving. ment actions with alacrity on all levels. While we all hope and pray that nothing devastating will This point is especially true if your business touches the occur in 2011, charities and nonprofits will likely harness financial services industry, as you will now have to deal these tools more effectively in the year, though under the with the newest federal agency on the block: the Bureau guise of greater regulatory oversight. of Consumer Financial Protection. Adam Snukal is a senior associate at Reed Smith LLP, a New So, whether your advertising strategy consists of claims York law firm. Reach him at awsnukal@reedsmith.com.
MERCHANDISING
Merchandise SKU and mobile store functionality are winning combo

By Rimma Kats
ith a growing number of retailers using mobile sites and applications as mini-storefronts, it is important to have a mobile-specific merchandising strategy within these destinations to drive sales.
Merchandising on mobile means understanding the mobile user specifically and how this person differs from shoppers on the PC. Tracking consumers once they are on a retail site or mobile application is a good way to serve that person relevant products and up the chances of a sale. Our entire outlook is mobile, said Cyriac Roeding, cofounder/CEO of shopkick, San Francisco. All indications from our first several months in market show that the outlook is positive.
If getting people into the store is so important, then why does nobody reward consumers for walking into the store why only for actual purchases? he said. Giving shoppers an incentive to visit is the first step in converting them to loyal shoppers. Pushing right buttons Personalization on a mobile site could mean many different things. It could mean that a consumer is tracked once she visits a retailers site and is shown products according to the parts of the site clicked on. Many retailers have yet to address the mobile commerce opportunity of implementing personalization as the basis for their optimization. Because mobile shopping sites display little content, it is paramount that all offers and products are relevant to each consumer. A good example is Baby Phat, which launched its mobile commerce-enabled site Oct. 4. New shoppers are assigned a cookie when they land
on http://m.babyphat.com, which begins tracking from the first click. But even before the shopper clicks on an item or category, the Baby Phat site personalizes the homepage based on how that person arrived at the site for example, from a paid search keyword.
checkout, he said. Many large retailers launched mobile beta programs in 2010. Now that data has been collected with these first launches, retailers will now use the information to construct roadmaps building on successful results.
Mobile users are on the go and looking for information quickly. Including a search functionality front and center Mr. Wiscot recommends that retailers make their mobile is important on a mobile site, so that consumers can find merchandising strategy fast and simple and test every what they need with speed and ease. step of the way for the most effective optimization. Online retail firms such as eBay and Buy.com have mo- In 2011, were looking to expand our reach to other bile applications where consumers can search for the mobile devices starting with Android and the iPad, products they need. Mr. Wiscot said. We are projecting 400 percentplus gross merchandise value growth in 2011 from Brands can also use this information down the road to mobile customers. merchandise products and product categories to that particular user. This type of behavioral targeting is ideal to try and drive sales through product recommendations to users who search a mobile site. Top functionality on a mobile site should include tabs such as Search all products, Purchase and Add to wish list. It is key to also incorporate larger images to compensate for small screen size although another school of thought believes this increases page load times and an easily located Back button for navigation to the previous page, as well as a Homepage or Homescreen tab to take the visitor to the opening page. Soft landings When incorporating mobile, marketers should focus on consumer needs. They should study what customers are browsing and searching and make the shopping experience easier. Mobile customers look for speed and simplicity when shopping, said Jeff Wiscot, vice president of marketing at Buy.com, Aliso Viejo, CA. The focal point should be the product the visitor is searching for. Give them fast resources to find a product when theyre on the go, provide the most common desired details on the landing page and, finally, give them a seamless
MULTICHANNEL RETAIL SUPPORT
Thread multichannel assets for engagement with mobile consumer

obile will be key for online and bricks-andmortar retailers to grow overall sales this year. The mobile Web will become the most essential channel for retailers because it offers the best discoverability via search.
It can also drive mobile users to branded applications that offer an even more optimized shopping expertise tailored for specific devices. We also believe that social media integration within the mobile commerce sites will become an essential tool for driving organic traffic to those sites, said Webster Lewin, senior vice president and director of digital innovation and strategy at MSLGroup Digital, New York. Also, mobile-savvy merchants will look for innovative ways to engage mobile shoppers in ongoing mobile communications programs via SMS, which is a fantastic channel for delivering timely, relevant offers that drive in-store and online traffic, he said. Form and function The key to multichannel mobile engagements is to first understand each type of mobile form factor and what these devices can and cannot do for the user, per Steve Timpson, president of mobile commerce platform pro- sets like employees, stores, marketing, call centers to vider Siteminis, Atlanta. thread opportunities for engagement with a consumer using a mobile device? he said. The top activities that consumers use their mobile device in shopping are calling, texting or sending a picture to Anytime, anywhere shopping someone regarding a potential product purchase, com- Mobile commerce is rapidly changing the way that conparing prices, visiting a mobile Web site or application, sumers manage their own shopping time. viewing product reviews, actually making purchases or looking for deals and coupons. Shopping is no longer limited to those times when in a brands store or visiting a Web site on a computer. MoreThe key to a comprehensive strategy in the mobile space over, mobile applications such as Red Laser and more is to evaluate each of these activities and determine threatening to other retailers, Amazon, have made price where the intersection points are with the retailers cur- comparison a snap. rent business attributes, Mr. Timpson said. Mobile shoppers are spontaneous and the opportunity In other words, how does a retailer use their current as- for brand engagement can lead to shopping anywhere.
Because mobile has allowed virtually any time to be shopping time, much of the mobile shopping activity can ultimately lead to a sale in-store or on the desktop Web site, so brands need to monitor their customers activity across all channels, MSLGroups Mr. Lewin said. Many retailers already understand that the mobile consumer is a more engaged consumer. As more brands adapt to that reality this year, there will be more sustained and consistent efforts driving consumers to mobile shopping sites and services. Tactics will build upon those that have proven to be effective including paid mobile search, mobile Web and in-application display banners, as well as SMS-powered coupons and loyalty programs. Channeling platforms Siteminis Mr. Timpson said a high-functioning retailer will incorporate mobile Web, applications, social media, SMS and email into its mobile portfolio.
The mobile Web will offer the most flexibility in creating cross-channel interactions with the largest group of Painting with a broad brush, however, we see the desire consumers and reach plus frequency is more important by retailers to create a user experience on the mobile than device bells and whistles for retailers at this point Web as the most important foundation point to their in the mobile space. mobile strategy, Mr. Timpson said. Apps are definitely in the mix, but with the fragmentaFrom this basic starting point, a retailer has the farthest tion of operating systems and form factors, the deterreach for customers and, frankly, the highest frequency mination for app development and deployment must be of engagement, he said. thought through carefully.
PAYMENTS
End of premium SMS micro-billing?

By Dan Butcher
uch of the groundwork that was accomplished in the mobile payments ecosystem over the course of 2010 will start to pay off this year as transactions via various mobile channels enter the mainstream.
Galaxy S, representing three of the leading mobile operating systems in the world. For the iPhone, Visa accountholders will use a protective case that incorporates a microSD slot. The case was developed by DeviceFidelity and has been tested in trials with financial institutions.
Mobile payments via SMS, the mobile Web and applications are becoming more commonplace, with online retailers such as Amazon and eBay successful driving sales through those channels. In 2011, the biggest leap forward will come from commercial deployment of Near Field Communication technology.
Chips fall where they may In addition, NFC chips will finally be installed in handWe are looking for- sets such as Google and Samsungs Nexus S and contactward to advancing less payments terminals will be installed more broadly at mobile payments in bricks-and-mortar retailers point-of-sale locations. North America through fully integrated NFC That infrastructure will eventually enable the moand microSD technology in 2011, said Dave Wentker, bile wallet to replace cash and plastic, reducing the head of mobile products at payments franchise Visa, friction of everything from impulse buys to wellSan Francisco. researched purchases. Visa has established a Third-party mobile payments companies such as Boku and new compliance testZong have thrived largely ing process for mobile by enabling online gamers contactless payments and social networkers to that includes extensive buy virtual goods and retechnical, security and plenish virtual currencies usability testing of the via premium short messagVisa payment functioning service, or PSMS. ality, he said. However, that model has For the first time in Visas history, a mobile contactcome under scrutiny from less payment solution is now included in the list of Visa the carriers, which want to compliant products. increase the prevalence of direct carrier billing. Smartphone models compatible for use with this tech- There is no dispute that mobile payments are impornology include the BlackBerry Bold 9650, iPhone tant, and in 2011 well see significant growth in the 3GS and 4, and the Android-based Samsung Vibrant number of transactions, the number of players and
not made for microtransactions, because from a merchant perspective, there is not a lot of flexibility. He calls it a fixed tariff product, where the offerings have to fit into one of several buckets $0.99, $1.99, $2.99 and so on. That is another reason premium SMS is not interesting for mass merchants, Mr. Preena said. Premium SMS is dead. In [this] year, well see announcements by the carriers that they will no longer allow micropayments via SMSat least one top-tier carrier in the U.S. has communicated that they will no longer allow micro-billing via SMS, as merchants are losing a significant amount of their conversion ability, which is going to create a significant issue, he said. the amount of time mobile payments companies are getting in front of brands, retailers and publishers, said Poojitha Preena, San Francisco-based consultant for Payfone. In the last 18 months, a significant amount of traction has been achieved to use premium SMS for offdeck content, he said. However, premium SMS, while highly suitable for ringtones and wallpapers, is not well suited for microtransactionsit makes the current model unviable. In 2011 there will be a lot of growth and a lot of infrastructural changes and change in how carriers approach mobile payments, he said.
What you will see in 2011 is a significant amount of change from a transaction standpoint, some mergers-and-acquisitions activity, people putting Premium woes themselves up for sale A certain percentage of premium SMS transactions fail its not going to be a case in 2011 of the strong getfor one reason or another, according to Payfone. ting stronger, it will be a case of the innovators getting strong, those coming up with new ways to meet carrier Mr. Preena said the user experience of premium SMS was needs and merchant needs.
RESEARCH
Top mobile commerce stats to remember in 2011

By Rimma Kats
obile commerce sales will this year increase 3. The mobile retail market will continue to grow. Junidrastically as more consumers have Web-en- per Research reported that the mobile retail market will abled smartphones and access to app stores. exceed $12 billion by 2014. This is no surprise, especially when retailers have recognized that consumers will not As mobile commerce grows, so will the amount of data leave home without their mobile device and are includspewed from all the players in the ecosystem. Here ing handsets in the retail cycle. are some stats that indicate what to expect in the 4. Mobile alerts will drive one out of three recipients coming year: in-store and 27 percent of those consumers will make a 1. Seventy percent of smartphone owners use mobile purchase, per Placecast. Consumers are continually optfinancial services, according to Data Innovation. Con- ing in to a retailers mobile application and, according to sumers are open to having their financial information Placecast, one-third of U.S. consumers who are signed up for the alerts say that such services affect their decion mobile. sion to buy products in-store. 2. Mobile app store revenues will exceed $6.2 billion in 2011, according to Gartner. With the success of Apples App 5. Applications will continue to be key drivers of moStore, Googles Android Marketplace, Research In Motions bile commerce and payments, according to Juniper ReBlackBerry AppWorld and Windows Phone 7 App Store, search. The market researcher predicts that by 2012, the the application market will reach new heights this year. value of digital and physical goods that consumers buy
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via mobile will reach $200 billion globally.
cent) and all other (12 percent).
6. Mobile bar code usage grew 1,600 percent in 2010, 13. In 2015, ABI Research predicts that mobile online reflecting increased adoption of smartphones for every- shopping will be responsible for $163 billion in sales day activities such as shopping, product information and worldwide, or 12 percent of global ecommerce turnover. Web usage, according to Scanbuy. 14. Budgets for mobile advertising skyrocketed from 7. Shopatrons analysis of multichannel holiday shop- $1.2 billion in 2009 to around $2.4 billion in 2010, and ping for its 800-plus brand clients from Nov. 17 to Dec. those ads are influencing shoppers, according to a study 6, 2010 found that mobile represented 2 percent of commissioned by Liz Claiborne. sales in this period. Based on initial growth data, the company expects mobile sales to double by the 2011 15. If given the choice between visiting a Web site on a mobile phone or downloading an application to shop or holiday season. browse a retailer, 48 percent of smartphone owners pre8. A study by Sybase found that 32 percent of consumers fer the mobile Web site and 38 percent prefer a mobile would make a purchase via their mobile device if given application, according to InsightExpress. a discount. 9. Eighty percent of businesses have or plan to have a mobile commerce-enabled site, per Adobe Systems. More marketers are leveraging mobile and must deliver consistent, rich experiences across all channels, including mobile, to ensure that usability is never compromised. 10. Although 41 percent of merchants have seen positive return on investment from mobile commerce, 32 percent have not measured their ROI or do not know how to measure it, per FitForCommerce. This year, retailers should look at traffic and figure out how to measure their ROI. 11. ABI Research reported that in 2010, mobile online shopping excluding travel in the United States doubled to total approximately $3.4 billion by years end. Travelrelated purchases such as airline tickets and hotels added another $1.5 billion. 12. In September 2010, ABI Research developed an analysis of the current mobile commerce merchants in the U.S. For 2010, U.S. mobile commerce sales are divided as follows: travel (31 percent), computers/electronics (20 percent), apparel (13 percent), books/music/DVDs (9 percent), office supplies (7 percent), home furnishings/ housewares (6 percent), entertainment tickets (3 perPAGE 33 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
REVENUE
Skys the limit for mobile commerce sales

By Dan Butcher
dvances this year in mobile payments for physical products, services and digital and virtual goods, as well as increased consumer confidence in mobile commerce transactions will lead to a boom in revenue. The rise of Near Field Communication-enabled handsets such as Google and Samsungs Nexus S and better contactless point-of-sale infrastructure will lead to the growth of the mobile wallet to pay for physical goods and services. On the mobile commerce side, EBay generated close to $2 billion in global mobile sales in 2010 and expects even more in 2011.
It does not surprise me and it showcases the rapid transition of shoppers to the mobile channel, said Sucharita Mulpuru, vice president and principal analyst of ebusiness and retail at Forrester Research, Cambridge, MA. This means that maybe about 5 percent of their [total] gross merchandise value is through mobile now? I suspect they still have significant headroom for increasing that figure even higher, she said. Hail sales Another example is 1800flowers, whose mobile commerce sales comprised just 1 percent of the companys total revenue in 2010. Although the percentage is a small
PAGE 34
one, the retailer has experienced huge mobile growth since 2009. Food delivery site GrubHub has steadily expanded its mobile footprint, and its total revenue from mobile orders increased to approximately $7 million in 2010. Bango projects digital mobile commerce for 2011 to surpass $4 billion in North America, which is equivalent to approximately a 150 percent increase in value compared to 2010. In the mobile commerce space, one area of real potential is in micro-billing. This is the idea of enabling charges We forecast an easing-back of carrier on-deck revenues well under a dollar, down to just a few cents. and traditional off-deck content revenues, said Anil Malhotra, senior vice president of marketing and alli- The opportunities that this opens up include pay-perances at Bango, Cambridge, England. view, pay-per-track for streamed music and pay-perpage for publications. We forecast growth in application store-billed revenues, with newer stores from Research In Motion and Instead of customers having to pay larger amounts and Microsofts Windows Phone 7 growing most quickly, but perhaps commit to subscriptions to access phone and Apple continuing to generate the lions share through tablet content, they can pay for videos viewed, tracks the iTunes store, he said. listened to and number of pages downloaded, Mr. Malhotra said. If all other things remained constant, application store revenue volumes would cause a 2.5 times growth in rev- The choice is 100,000 readers paying $9 a month, enue, but the reduced revenues from carrier-provisioned versus 10 million readers paying anything from just a content compared with 2009 and 2010 takes down the few cents a month to a few dollars, depending on their total growth figure averaged across all mobile digital consumption, he said. commerce channels. According to Gartner analyst Sandy Shen, the outlook for While the mobile payments revenue in some mar- mobile payments is continued growth. kets in Asia are quite difficult to assess, Bangos North American estimates should be welcome news to digital The number of mobile payment users is expected to merchants worldwide. reach 340 million in 2014, representing 5 percent of the worldwide mobile user base, according to Gartner. ToPenny pinching and pulling tal transaction value is projected to reach $245 billion In terms of opportunities, the big picture is that the in 2014. whole Internet usage model is becoming dominated by mobile devices. Shop till you top ABI Research reported that in 2010, mobile online shopThe opportunities for regular, frequent, see-do style ping excluding travel in the United States doubled to apof transactions means that the volume of mobile-ini- proximately $3.4 billion by years end. tiated payments will dwarf, within three years, anything we have seen in PC-based ecommerce so far, Mr. Travel-related purchases such as airline tickets and hoMalhotra said. tels added another $1.5 billion.
SEARCH
Properly executed mobile search marketing will drive sales

ith an increasing number of retailers and brands building smartphone-optimized Web sites, mobile search will this year be an important aspect of driving consumers to these destinations. Mobile search advertising will make it possible for advertisers to translate consumer searches into immediate action. By leveraging mobile offers and loyalty programs, advertisers will drive measurable foot traffic to retailers. Mobile search will continue to play an increasingly important role in 2011, said Andrew Koven, president of ecommerce and customer experience at footwear retailer Steve Madden, New York. To me it means many things. Clearly more and more consumers have been in 2010, and will be in 2011, utilizing search, including the browser, social media sites and price comparison tools and asking questions of their peers on the fly via text at points of purchase, he said. With the increasing numbers of smartphones and growing number of tablet devices, the consumer will more than ever have the freedom, flexibility and confidence
to search, research and validate both their preferences and purchases. Clicks for retailers In 2010, most consumers were able to leverage mobile optimized and paid search to find a product or locate a store nearby. This year, consumers will use mobile search to support more advanced retail scenarios such as comparing prices, finding special offers and discounts, and even sourcing the best local price.
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action, he said. Both types of advertisers will likely integrate offers and promotions into their paid mobile search to drive foot traffic to local merchants as a way to differentiate their products and services in the marketplace. Optimize opportunity The major difference from 2010 is comfort level, awareness, mobile device migration to smartphones and basic know-how. The sheer amount of media attention focused on consumer mobile shopping behavior during the holiday season was on par with the press garnered by ecommerce a decade ago. From a business standpoint, this is all positive because a big part is making sure that retailers display the most important information for consumers on the pages within context of the desired mobile experience, Steve Maddens Mr. Koven said. For example, if a consumer is searching for a particular type of shoe, we need to provide them the most efficient way to find it, understand it and buy it, Mr. Koven said. This intelligence is becoming far more prevalent as mobile-optimized search evolves into the mainstream and we apply it as business leaders. Dennis Glavin, group product manager of mobile search advertising at Microsoft, Redmond, WA, said retailers will need to figure out how to make the products for sale in their local outlets more discoverable to the mobile consumers, overcome potential issues related to mobile coupons and, most importantly, figure out a way to track ROI. Having an optimized mobile commerce site with proper deep links to ensure relevancy of results is key. To drive sales, consumers have to be able to quickly get to what it is they want. That said, the rules have not changed for mobile.
The larger advertisers will likely continue to make improvements in their Web sites that are optimized for Inventory visibility is key, Mr. Koven said. advanced mobile devices and mobile commerce, Mr. We look at mobile as a multichannel shopping enabler, Glavin said. he said. Having the ability to identify where a particular Small-to-medium advertisers will likely leverage click- style can be found based on the consumers current locato-call for their mobile ad campaigns and on their Web tion and, excuse this pun, will give the savvy retailers a sites to drive consumer engagement and immediate leg-up in sales.
SOCIAL NETWORKS
Consumers will respond to location-based social promotions

By Rimma Kats
rands are increasingly turning to mobile as another revenue driver and using social media applications such as Facebook, Foursquare, Scvngr and Gowalla to get consumers in-store. Marketers and retailers such as McCormick & Schmicks, Saks Fifth Avenue, Crumbs and American Eagle Outfitters are complementing their mobile strategy via mobile social network outreach. Consumers are now enticed to shop on a personal level, via the same social networks they use to keep in touch with friends. More customers interact with retailers before, during and after their shopping experiences than ever before, said Eric Friedman, director of client services at Four-
square, New York. Retailers are now much more in tune with providing an end-to-end experience that starts online and results in an offline sale. We are experiencing a perfect storm of sorts in the mobile space that allows apps like Foursquare to thrive and this leads to more people to have powerful pocket computers, as well as enriched interactions with everything around them, he said. The effect of this, combined with more new entrants into the mobile operating system arena than ever before, mean consumers win. Companies are energized to gain the growing smartphone users attention, which means the best user experience will win.
Mocial On Foursquare users are competing for a chance to be mayor of a specific location to win a prize by checking in.
Only 18 percent of check-ins come from Foursquare and 12 percent are via Google Latitude. About 31 percent of consumers check-in at least once a day and 21 percent do so a few times per day.
On Facebook, brands are keeping consumers up-to-date on deals and contests and using their pages to distribute The most popular places to check in are home (52 perbranded content such as videos. Facebook Mobile is also cent), at a restaurant (50 percent), at a store (40 percent) driving traffic to brands mobile Web sites. or at work (39 percent). Indeed, marketers are starting to notice the benefits of Facebook Places is likely to turn into a valuable tool for mobile social media. brands in 2011. It has to. Of Facebooks 550 million users, 220 million were mobile in 2010, indicating the massive Saks Fifth Avenue recently offered consumers a free Nars opportunity for brands to monetize using the platform. lipstick if they checked-in to any of its participating locations via the Foursquare application. Hunt begins A whole new wave of startups this year will pop up to Consumers were encouraged to go to four different de- take advantage of the Near Field Communication techpartments and unlock shopping tips to get their prize. nology deployed by Googles new Nexus S mobile phone from Samsung. According to Lightspeed Research, Facebook Places is the most popular check-in mechanism, with 52 percent of Also, social networks such as Foursquare will centralize respondents using it. even more transactions around the mobile device. Expect to see more social media applications and mobile Web sites incorporate social functionality. Last year, marketers realized the value and virality of including a Facebook Like feature to a mobile site. Were just at the beginning of mobile commerce, said Seth Priebatsch, CEO of Scvngr, Boston. Mobile is now location-aware, social and fun. As an ecosystem, were just now experimenting with tying the mobilesocial entity to transactions, he said. All of this experimentation will converge in fascinating ways. Youll have players like Scvngr experimenting with ways to tie our gameplayer more and more directly to commerce at local businesses.
SOFTWARE AND TECHNOLOGY
Its all about Near Field Communication

By Dan Butcher
obile software and technology will make big strides this year, and those advancements will have a huge effect on commerce, payments, retail, banking and financial services. There will be continued growth in mobile banking, the main reason for this being the growing adoption of smartphones that will increase consumer discovery of their banks mobile services and drive more mobile transactions. While that is significant, the biggest news of 2011 will center on the commercial introduction of Near Field Communication-enabled handsets and contactless mobile payments. In terms of mobile payments, the big development will be the long-awaited commercial shipments of NFC-enabled devices by mobile phone manufacturers, said Red Gillen, senior analyst at Celent, San Francisco.
banks, retailers, mobile wallet vendors, couponing services, location-based applications, he said. Platform shoo-ins At times, innovation happens in the blink of an eye, while other times it progresses slower than many would like. In mobile the slower progression is largely due to the continued fragmentation of the ecosystem. The rise of the HTML5 standard has enabled richer mobile Web experiences, as well as more sophisticated richmedia mobile advertisingboth across the mobile Web and within applicationsthat can directly drive transactions and will do so throughout the year. Savvy retailers and merchants will be quick to launch commerce-enabled mobile Web sites, with many launching applications this year.
Although a critical mass of such phones and contactless terminals at merchants will take years to achieve, The question was and is, which platforms to support? shipments of such phones will spur development of NFCrelated shopping applications by hundreds of players Most marketers chose to first support Apples iPhone, but in North America, Googles Android and Research In Motions BlackBerry closed out 2010 neck-in-neck for the lead in operating system market share, per Nielsen Co.
Android has arrived in terms of what devices consumers are buying, said Paul Kultgen, director of mobile media and advertising at Nielsen Online, Chicago. Apple remains a leader. The battle for dominance will be fueled by innovation in the features and services a particular operating system offers over another and market factors, including if Apple will be available on more carriers in 2011 [the iPhone and iPad will sell through Verizon Wireless and AT&T], Android solving some of the challenges of purchasing apps and others, like who delivers on the promise of mobile commerce, he said. Ultimately, 2011 will be a banner year to see if a particPAGE 40 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011
and merchants on a limited scale. However, to the extent that it is available and leveraged appropriately, consumers will be able to tap their phones at a merchants contactless POS terminal to accrue and redeem loyalty points. In addition, mobile coupon redemption will increasingly take place, per Celent. This will be a fantastic opportunity for merchants, as it will allow them to track redemption down to the user level, setting the stage for more targeted, effective couponing thereafter, Mr. Gillen said. The challenge to merchants will be to invest in new contactless hardware and to properly implement campaign management systems, which enable loyalty and coupon issuance and redemption, he said. ular platform can create a new offering that fundamen- If merchants hope to adopt the mass-market-of-one tally shifts the market, which will be required to deliver mentality of personalized marketing, there is a mindfair share plus market growth. boggling array of campaigns that could be devised via the mobile channel. See more NFC While many marketers and merchants have waited years for NFC-enabled handsets and point-of-sale contactless readers to achieve scale, real progress will actually be made this year. NFC will move from something only being talked about to being something real and tangible, although still nascent, Celents Mr. Gillen said. While challenges such as fragmentation and lack of a revenue-sharing consensus will persist, this year will be a breath of fresh air for many stakeholders in the mobile commerce ecosystem. Point-of-sale integration with mobile software and technology will offer retailers and merchants the opportunity to drive commerce and payments, as well as customer relationship marketing and loyalty. NFC technology will also be available for both consumers
WEB SITE AND DEVELOPMENT
Mobile Web underpins mobile commerces growth

he mobile Web will be the gateway for mobile commerce transactions this year as more retailers and brands realize the importance of having a mobile Internet presence to be relevant to a new age of connected customers. Mobile Web sites will rapidly evolve, providing more personal experiences based on consumer behavior, past purchases and preferences. But the key to mobile shopping this year and beyond is convenience consumers want to quickly find what they are looking for and easily make a purchase. We are exceptionally positive about the opportunity for mobile commerce in 2011, said Bob Cell, CEO of MyBuys, New York. Consumers have stat-
ed emphatically that they want to shop using their mobile phone, as evidenced by the surge in mobile shopping over Black Friday and Cyber Monday this past year. Many of our retail clients have seen significant traffic to their mobile sites and, more importantly, increased online sales, he said. In 2010, retailers rushed to get a basic mobile Web site up-and-running as quickly as possible, but we believe there is an even greater opportunity for retailers to connect with their shoppers. Weve heard from online shoppers that they want brands and retailers to provide a consistent shopping experience across channels, whether theyre shopping in-store, online or via their mobile phone. They want a personalized experience, one that recognizes who they are and what they have browsed and purchased in the past. Make it personal Retailers focused on creating mobile commerce-enabled
sites in 2010.
The mobile Web quickly became a major new channel for retailers with significant revenue and an opportunity to Were investing heavily in personalized mobile combuild a strong relationship with mobile customers. merce and are excited to be able to offer new media capabilities and mobile coupons to retailers and consumers Retailers understand the importance of offering a alike in 2011, he said. unique mobile-optimized Web site that looks elegant across all popular smartphone platforms and cre- Key site features ates a mobile shopping experience for the broadest set Digbys Mr. Lowden said that consumers now expect the of customers. following features when they visit the mobile sites of their favorite retail brands: The mobile-optimized Web site needs to be unique and not a cut-and-paste of the same content from the ecom- Unique offers merce site, so that retailers can create a rich and engag- Rich product images ing mobile experience, said Dan Lowden, vice president Detailed product description of marketing at Digby, Austin, TX. Ratings and reviews Store locator Retailers will this year concentrate on revamping their Order status mobile sites to create a personalized shopping experi- Customer support ence for every consumer by displaying relevant products Email and discounts that are optimized based on preferences Shop by category and past online activity. Shop by brand Deals of the week The mobile experience can be 100 percent customized to Secure checkout any individual, starting with the homepage all the way An ever-present search bar through checkout. Facebook and Twitter integration Weve seen that by providing a personalized experience, Unique mobile experiences on a mobile-optimized Web
consumers are more receptive to making a purchase using their mobile phone, MyBuys Mr. Cell said.
site make consumers feel that they are connecting with the retail brand on a personal level, Mr. Lowden said. It sends the message to loyal customers that the brand knows their shopping preferences and has tailored an experience to meet their needs.
ences for their mobile Web site rather than cut and paste the same content from their ecommerce Web site. Smartphones and tablets such as the Apple iPad are becoming commonplace, which will only accelerate the adoption curve of mobile shopping, MyBuys Mr. Cell said.
Loyal customers who feel a personal connection to a retail brand tend to buy more frequently and in higher More importantly, consumers expect their favorite brands and retailers to offer a personalized mobile expequantities, he said. rience, he said, so for those willing to make the investRetailers will also realize that in order to provide value to ment, they will benefit from increasing consumer traffic their customers, they will need to create unique experi- and sales from their mobile site.
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CONTENTS

Mickey Alam Khan Editor in Chief mickey@ napean.com

Dan Butcher Associate Editor dan@ mobilemarketer.com

Jodie Solomon Director, Ad Sales ads@ mobilemarketer.com

Giselle Tsirulnik Senior Editor giselle@ mobilemarketer.com

Rimma Kats Editorial Assistant rimma@ mobilemarketer.com

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Mobile set to influence retail, on-device shopping

Mickey Alam Khan mickey@napean.com

Mobile advertising to drive mobile commerce sales

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Analytics key to multi-platform mobile commerce

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Retail apps will be next-generation loyalty cards

Anticipate strong consumer adoption of mobile banking

Carrier networks laying the groundwork for huge Isis launch

Content integration pivotal to mobile utility

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Mobile database essential for driving direct commerce

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Mobile-optimized email can be effective commerce-driver

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Mobile games as traffic driver? Worth a second look

Greater focus on privacy is inevitable

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Expect mobile and online behavioral advertising legislation

Merchandise SKU and mobile store functionality are winning combo

MULTICHANNEL RETAIL SUPPORT

Thread multichannel assets for engagement with mobile consumer

End of premium SMS micro-billing?

Top mobile commerce stats to remember in 2011

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

via mobile will reach $200 billion globally.

cent) and all other (12 percent).

Skys the limit for mobile commerce sales

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Properly executed mobile search marketing will drive sales

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

Consumers will respond to location-based social promotions

SOFTWARE AND TECHNOLOGY

Its all about Near Field Communication

WEB SITE AND DEVELOPMENT

Mobile Web underpins mobile commerces growth

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2011

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