mCommerce/mShopping

Pushing Mobile Payments

Sprint Nextel Corp. this week tripled the number of smartphones it offers with a seldom-used technology for tap-and-go payments, as the carrier and its rivals try to convince a reluctant public to make mobile payments mainstream.

Sprint, which announced at the Consumer Electronics Show that it will add LG Electronics Co.’s Viper and Samsung Electronics Co. Galaxy Nexus to its lineup, is among those betting big on the idea that people will want to use their smartphones as credit cards. So far customers and retailers have remained tepid toward the technology, called near-field communication, or NFC, prompting Sprint and others at the Las Vegas show to try a different tack: touting NFC’s “side benefits,” which include mobile coupons and digital-key replacement.

“If you’re really going to get consumer adoption, you have to start talking about the capability in terms they can relate to: touching the phone to something and having something happen,” said Kevin McGinnis, Sprint’s vice president of product.

At its booth at the electronics show, Sprint-rival Verizon Wireless was demonstrating how a Galaxy Nexus could be used to release a deadbolt by waving it in front of the lock. Meanwhile, Research In Motion Ltd. demonstrated how drivers can sync their devices to a car’s software using NFC, which can enable hands-free calling and other preferences such as seat and mirror positioning.

NFC “allows the phone to be your mobile key chain, to replace the various keys you would carry and the identification cards you use to get into your office,” said Karl Weintz, mobile access vice president for HID Global, whose technology Verizon used in its demonstration.

Soon, consumers using NFC may be able to wave their smartphones at arena turnstiles in place of tickets; pair their devices with appliances and mobile accessories; retrieve coupons; or link instantly to websites by waving them in front of a reader, said Kevin Packingham, Samsung Electronics Co. senior vice president of product innovation.

Though NFC isn’t a new technology, carriers and device makers have been beset by a lukewarm response from retailers—which are loath to buy new equipment to enable tap-and-go payments—and by a debate over who controls consumers’ financial data. Consumers have also been reluctant to ditch traditional credit cards, which reward them with airline miles and other incentives.

“The challenge is you’ve got to get the infrastructure built and the people out there to use it before it makes sense,” said Charles Golvin, an analyst with research firm Forrester. “People aren’t going to rush out to buy a device with this capability that they can’t use anywhere.”

There are just 100,000 NFC readers in the U.S., said Yankee Group analyst Nick Holland. That compares with near ubiquity for traditional credit-card readers.

AT&T Inc., Verizon Wireless and T-Mobile USA in 2010 formed a joint venture known as Isis to roll out a mobile-payment network that will one day funnel transaction fees back to the carriers. But Isis will only begin trials this year, and AT&T and T-Mobile, a unit of Deutsche Telekom AG, haven’t begun selling smartphones—other than BlackBerrys—with NFC capability.

Google Inc. said it relented in the face of Verizon Wireless’s demand in December that its Google Wallet mobile-payment software not be embedded in the Galaxy Nexus, just as the device was set to launch. Verizon, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, has said the software was incompatible with the network and the dispute wasn’t about its Isis venture.

Central to the rollout of NFC technology is who will pay for the terminals to enable payment and who—among card companies, banks and the carriers—controls users’ financial data. Marc Freed-Finnegan, senior product manager for Google Wallet, said those issues were slowing adoption and it may be years before they are all settled.

Shadman Zafar, a chief technology officer for Verizon Wireless, said he expected it to be at least three years before NFC use for payment is anything more than a niche.

Mr. Zafar said retailers are concerned their transaction fees may rise, though he said they ultimately would benefit through targeted couponing and speedier checkout. Under one scenario, a venture like Isis could absorb those fees in exchange for profit-sharing through the coupons, he said.

Nonetheless, more device makers will be compelled to offer handsets with NFC chips in them, Nokia Corp. Chief Executive Stephen Elop said during a presentation at CES.

Motorola Mobility Holdings Inc. will also enter the NFC fray this year with several handsets, said Christy Wyatt, its senior vice president of mobile devices for enterprise, in an interview at the show. “Customers are asking for it and we’ve got to deliver for them,” she said. “The ecosystem will follow.”

Write to Greg Bensinger at greg.bensinger@dowjones.com

Retailers Try to Thwart Price Apps

By Dana Mattioli, WSJ, Friday Dec 23, 2011

The smartphone boom is unleashing a new era of pricing transparency to consumers able to use wireless apps and search engines on their mobile devices in stores to check if they are offering the best deal. But retailers are fighting back harder than ever to prevent their stores from becoming mere showrooms.

Read more: http://online.wsj.com/article/SB10001424052970203686204577114901480554444.html#ixzz1hP4Jg8hv

M-Commerce Sales Shoot Up as More Consumers Buy via Mobile

Our two cents:
Always good to see stats on mCommerce. Even though the numbers are impressive, )yet not surprising) the article fails to mention two of the most important factors that contributed to the overall growth of mCommerce this past year. A main factor were tablets. As we all know, these things are really content consumption and shopping devices. In fact, we often see that while the overall percentage of tablets is low, they often make up a large part of sales for our clients. Secondly, this is the year that mobile search become a force to be reckoned with. Bing and Google both have mobiles-specific algorithms designed specifically for mobile devices. One of the main differences between this algorithm and the traditional desktop one is the ranking of local stores. Why? Because they know that if people are searching for nearby stores must be in hard-core “purchase mode”, so those local business tend to get higher priority in the search results, which in turn drives sales for those stores.

Read full article from EMarketer

Behavior and insight on this holiday season’s mobile shopper

Our two cents:
It’s certainly no surprise to learn of the compound growth rate of research and purchases for mobile shoppers. While some retailers made early bets in mobile that have in some cases yielded 20% increase in online sales, most are still trying to define an overall mobile strategy. So when the IBM says things like “Retailers are going to have to do a really good job in targeting their messages and promotions for mobile users” we can’t help but shed some light on what exactly that means for most retailers. Below are a few key points to “getting it right” for any retailer:

  1. Remember that mobile shoppers are surgical shoppers. And just as importnat, remember that shopping on a retailer’s mobile site means visual shopping, especially for ESL shoppers. Therefore, keeping copy to a minimum and getting multiple (and easily downloadable) images on the site is key. With the average mobile device shopper spending about 4 minutes on a site, it becomes imperative for retailers to quickly serve up ONLY the most relevant content. Furthermore, mobile shoppers also tend to do less browsing and look at fewer products when they shop, making it more imperative for retailers to personalize messages and content. Simply put, shoppers go to websites to get ideas, but they go to mobile sites to get what they want.
  2. Use social networks to drive engagement and sales online. Social networks are an important factor in retail. According to IBM Coremetrics data, 9.2% of consumers in October that came to a retailer’s web site from a social media site made a purchase, compared to 5.5% who visited the store site directly. Retailers should not walk away from this fact thinking that adding a social networking step to the shopper journey is the right way to go. “Liking” or “following” a brand on a social network is a non-linear action for shoppers and not part of the traditional sales funnel. Therefore, retailers would be ill-advised to treat it like any other media channel.
  3. Invest in mobile search. This is one of the few silver bullets retailers have in mobile and not nearly enough of them use it. The simple fact is that everyone uses mobile search and with google now running a mobile-specific algorithm, retailers must respond with mobile-specific SEO and SEM strategies.

Read WSJ article

There’s something to this Square thing

This past weekend, we took a trip out to a local farm to buy a bunch of pumpkins. It’s a working farm, nothing fancy and certainly nothing you’d ever see in Wired Magazine. There was a small fold out table which served as the check-out counter that offered two payment methods: old-fashioned cash and credit cards. The latter was a bit surprising because it was being enabled through Square, the mobile payment service. The woman managing the checkout process effortlessly switched back and forth between taking calls and taking credit cards, all form her iPhone. This prompted me to ask what she thought of using Square. Her response, an enthusiastic “2.7%”, referring to the low rate she was being charged. The second thing she mentioned was the “convenience”. Later that day I received a receipt, (which could not have been easier to read) for the pumpkin shopping spree. There was even a small map at the top of the receipt reminding me of where the transaction had occurred. And I couldn’t stop thinking about how effortless the transaction was for EVERYONE involved and about how everyone benefited in some way.

I’m telling you, there’s something about this Square thing.

Tablets: Ultimate Buying Machines

Our two cents:
The big takeaway here is that while phones still hold potential for low-involvement purchases, it’s the tablet, which is the device that ultimately  leads to sales. But retailers need to take this information with a grain of salt, as tablet owners naturally appeal to shoppers with a higher household income (HHI), which means they simply have more money to spend to beging with. Furthermore, until the market has low to mid-priced tablets, we won’t truly know if the tablet makes people buy more or not. Within a year, we should be able to compare conversino rates of high-end tablets, e.g, iPads vs. the conversion rates of lower-priced tablets, e.g., Amazon Fire. Still, some of the tablet shopper attributes mentioned are quite alluring:

  1. Tablet shoppers tend to have a 25%-50% higher conversion rate
  2. They buy more, i.e., larger shopping carts
  3. Retailer Abercrombie, Macy’s and Gap all say they are seeing the highest percentage of conversions from shoppers using tablets

Some other interesting tidbits:

  1. Cosmetics chain Sephora uses the same website for tablets as it does for PC
  2. Many retailers are revamping both their traditional websites, rethinking the traditional point and click web models of the 90′s
  3. Mobile sites for many of these retailers are still seeing more traffic, but may account for less overall sales than tablets

Read full story

Google Wallet

Our two cents:
Everyone, and I mean everyone, in the mobile industry talks about the year of mobile. It has become an inside joke among us geeks that have been in mobile before the industry was called mobile. Back when people called it cellular communications. But with Google’s introduction of the mobile wallet, this may well in fact be the year of mobile after all. Granted there are only 150,000 companies (mostly retailers) that have invested in the store infrastructure, i.e., the phone readers, that can even accept the mobile wallet, but that’s okay. Because there’s more to the wallet than just a paying for things. As astutely points out,

…it is actually Single Tap, the next generation of merchant participation. In SingleTap establishments, Wallet is more than a credit card stunt double. It also stores digital coupons, loyalty points cards and Groupon-style special deals. (Already, Google’s shameless Groupon imitator, called Google Offers, is automatically linked to Google Wallet.

Even fewer brands offer SingleTap than the wallet itself. But that is likely to change quickly, especially with the vast majority of the U.S. carry NFC-enabled smartphone chips within two years.

Read full article

The composition of the Social Media Shopper

From Nieslen’s “State of the Media: The Social Media Report”

  • Social networks and blogs continue to dominate Americans’ time online, now accounting for nearly a quarter of total time spent on the Internet
  • At over 53 billion total minutes during May 2011, Americans spend more time on Facebook than they do on any other website
  • Tumblr is an emerging player in social media, nearly tripling its audience from a year ago
  • Nearly 40 percent of social media users access social media content from their mobile phone
  • Internet users over the age of 55 are driving the growth of social networking through the Mobile Internet
  • 70 percent of active online adult social networkers shop online, 12 percent more likely than the average adult Internet user
  • Across a sample of 10 global markets, social networks and blogs are the top online destination in each country, accounting for the majority of time spent online and reaching at least 60 percent of active Internet users