Making Leaders Successful Every Day. Mcommerce Summit: State of Mobile Commerce 2013

Making Leaders Successful Every Day Mcommerce Summit: State of Mobile Commerce 2013 Mobile Commerce Opportunity Julie Ask, Vice President May 2, 20...
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Making Leaders Successful Every Day

Mcommerce Summit: State of Mobile Commerce 2013

Mobile Commerce Opportunity Julie Ask, Vice President May 2, 2013

Mobile will be the primary digital connection to your customers.

Key Questions › ›

What are the key trends in mobile?



What steps should Retailers and Marketers take to capitalize?

How will mobile disrupt existing business models?

© 2013 Forrester Research, Inc. Reproduction Prohibited

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Key Questions ›

What are the key trends in mobile? • Impact on consumers

• Impact on enterprises



How will mobile disrupt existing business models?



What steps should Retailers and Marketers take to capitalize?

© 2013 Forrester Research, Inc. Reproduction Prohibited

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A quote from Forrester’s James McQuivey:

› "When consumers adopt technology, they do old things in new ways; when people internalize technology, they find new things to do." For the most part, we are still doing old things in new ways ….

Consumers use phones while shopping “Which of the following have you ever used your cell phone/smartphone for?” 18% 17%

To locate a nearby store or to check store hours To take picture of a product to share with friends

11%

To look up product information while shopping in a store

9% 9% 9% 9% 8% 8%

To compare physical store prices with online prices To find or redeem a coupon/coupon code To scan 2-D barcodes to get additional information To read customer reviews of a product To take picture of myself in a product to share with friends

To check availability of a product in an online store

7% 6% 6% 6% 5% 5%

To check in-store availability of a product To learn about an in-store promotion or event To "check-in" to a store using a location based application To access my loyalty rewards account To store my membership card/loyalty card To look for online self To reserve items at a store for pickup

3%

Base: 3,842 US online adults (18+) who own cell phones

Source: North American Technographics® Retail Online Survey, Q2 2012 (US) © 2012 Forrester Research, Inc. Reproduction Prohibited

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… and they use them in stores “Which of the following have you ever used your cell phone/smartphone for?”

In-store Base: 3,842 US online adults (18+) who own cell phones

Source: North American Technographics® Retail Online Survey, Q2 2012 (US) © 2012 Forrester Research, Inc. Reproduction Prohibited

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They are still doing old things in new ways “Which of the following have you ever used your cell phone/smartphone for?”

New Things

Base: 3,842 US online adults (18+) who own cell phones

Source: North American Technographics® Retail Online Survey, Q2 2012 (US) © 2012 Forrester Research, Inc. Reproduction Prohibited

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Mobile Trends: Consumer Impact 1. Mobile platforms will be the catalyst for the next generation of connected experiences 2. Tablet commerce will outpace mobile commerce, but the comparison is irrelevant 3. Sophisticated analytics wrapped around big data will power next generation, smart apps 4. Mobile will play a leading role in engaging consumers in emerging markets © 2012 Forrester Research, Inc. Reproduction Prohibited

Consumer Platforms

1. Mobile platforms are the catalyst for new, connected experiences

2. Tablet commerce will outpace mobile commerce, but why compare?

Tablets are primarily used at home while smartphones are used everywhere

© 2012 Forrester Research, Inc. Reproduction Prohibited

3. Analytics wrapped around contextual data will power next-gen apps

Context

Analytics

• Situation • Preferences • Emotions

© 2012 Forrester Research, Inc. Reproduction Prohibited

Customer Insights

Action

Contextual use of time will help prioritize home page content Airline example based on user time –2 days

–2 hr

• Change reservation • Reserve seat • View reservations • Check gate

Flight

+2 hr

+ 2 days

• Arrival time

• Customer service

• Food order

• Mileage status

• Movies

• Reward travel

• Wi-Fi

• Upcoming reservations

• Departure time

• Ground transportation

• Lounge access

• Lost luggage

• Upgrade

• Navigation

4. Adoption of mobile phones has exploded globally … and with it, mCommerce €2.7B

$12B

Mobile Trends: Enterprise Impact 5. Mobile will require more formal organizations, process and governance 6. Strategic staffing will increase in importance 7. Spending will increase – especially to enable mobile services 8. The availability of adjacent technologies will limit mobile services

The age of mobile on the cheap is over © 2012 Forrester Research, Inc. Reproduction Prohibited

5. Companies are migrating their approach to supporting mobile Single Mobile Champion

Mobile Group

Organization

“It [mobile great on because we needed a small group “We have agroup] mobilewas center of early excellence. They are tasked with to get attention.the Butmobile then there wasn’tplus enough to make mobile best go. understanding ecosystem key fire trends, developing Mobile need be infused everywhere. We disaggregated mobile.” practices andtoeducating our staff.”

The fast pace of growth has challenged organizations looking to scale

“Our senior leadership team understands the strategic importance of mobile to our organization.” (72%)

Source: Forrester Research Interviews in 2012; 25 Mobile eBusiness and Marketing executives in North America and Europe

6. Strategic staffing will increase in importance Strategic approach to working with vendors KPI’s and metrics that go beyond engagement

Well organized and staffed − Mobile steering committee with cross-functional representation − Core mobile group chartered with developing and dispersing best practices − Governance model to prioritize initiatives and ensure best customer experiences with the brand − Strategic plan to acquire talent − Close working relationship with their IT team

$$$ Well funded Senior level support

Mobile Employees Per Thousand Employees

The race for talent is on! Combination of inhouse builds to support customer service and outsourced development. Large company. Spends wisely. Outsources most development.

Industry leader by all measures. Build internally.

Small company investing heavily.

Mobile Employees Per Billion Dollars In Revenue Source: Forrester Research Interviews in 2012; 25 Mobile eBusiness and Marketing executives in North America and Europe

7. Spending will increase: the majority of mobile costs are to support the back end

February 2013 “2013 Mobile Trends For eBusiness Professionals”

Investments in mobile are too small with 58% spending less than $1M annually What kind of investment in mobile do you foresee your company making in 2013? (We’re referring here to external spend on services and vendors)

Less than $250K USD Don’t take this as a benchmark – Between $250K and $500K USD 15% this asUSD a data point that 15% Between take $500K and $1M Between $1M and efforts $5M USD are underfunded. mobile Between $5M and $10M USD 4% Industry leaders are Between $10M and $20M USD 3% well into the Between seven$20M and $50M USDeight 1% figures if not More than $50M USD 1% annually. I don't know 13% Base: 160 eBusiness Professionals Source: Global Mobile Maturity Survey (Q4 2012) © 2012 Forrester Research, Inc. Reproduction Prohibited

28%

21%

Key Questions › ›

What are the key trends in mobile?



What steps should Retailers and Marketers take to capitalize?

How will mobile disrupt existing business models?

© 2013 Forrester Research, Inc. Reproduction Prohibited

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Mobile will transform business models many ways. Mobile will: 1. Offer deeper consumer engagement 2. Evolve into real-time interactions that depend heavily on contextual information 3. Alter pricing models 4. Up-end existing cost structures (lower barriers to entry) and disintermediate ecosystem players 5. Facilitate real time access to information and services for the billions

© 2012 Forrester Research, Inc. Reproduction Prohibited

2. Intelligence added to location will dictate consumer experiences on mobile Retail example based on user location In-store

Competitor’s store

Home

• Bar code scanning

• Coupons

• Coupons

• Consumer reviews

• In-store inventory

• How-to videos

• Coupons

• Nearest “store”

• In-store inventory

• In-store navigation

• Pricing

• Research tools

• Lists (e.g., wedding registries)

• Promotions

• Shopping list building

• Loyalty

• Store hours

• Promotions

• Store location

• Shopping lists

• Weekly circular

Image: Julie Ask

3. Pricing can and will vary by location If a retailer knows I am in the store, they may price assuming I need the product now. If a retailer knows I am home, they may offer a price assuming I won’t get in my car and drive.

4. Industries with complex or dated business models …. Call

IVR

Waiting

Dispatch

Taxi Medallion

Insurance

Waiting No Transparency

… will be susceptible to disruption as mobile phones eliminate elements … Call

IVR

Waiting

Dispatch

Taxi Medallion

Insurance

Waiting No Transparency

… and offer value add services • Value-add services include: choice of car, electronic receipts, car tracking, driver ratings/reviews, timely information, etc. • Vehicles are identified quickly without lengthy IVR interactions or “hold” times • Mobile-first company/service

5. Mobile phones offer unprecedented connectivity/computing power to billions ›

Mobile phones will have a profound impact on democratizing access to a wealth of services • People living in rural areas in countries without the physical infrastructure and wealth we know in the US will have access to care • Scientists can track, for example, the outbreak of a simple flu or even malaria • ―Connected cameras‖ in phones will facilitate remote diagnostics



Impact/WIM? • Lower the cost of care • Improve the quality of care based on more accurate information

• Separate ―place‖ from care … patients do not need to be in the same room as care givers as often or for as many reasons © 2013 Forrester Research, Inc. Reproduction Prohibited

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Cellscope turns a cell phone camera into a microscope for diagnostics

© 2013 Forrester Research, Inc. Reproduction Prohibited

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Key Questions › ›

What are the key trends in mobile?



What steps should Retailers and Marketers take to capitalize?

How will mobile disrupt existing business models?

• Optimize service design for mobile • Organize to support broad use of mobile

© 2013 Forrester Research, Inc. Reproduction Prohibited

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Retailers and Marketers must shift their entire approach.

1. How to approach mobile services design:

A. B. C. D.

Think mobile first

E.

Plan mobile services evolution

Define mobile use cases Focus on convenience Begin to do things in new ways throughout the entire customer journey

A. Future retail will be “Mobile First” with context:

› Delivering relevancy › Simplifying tasks › Creating a personalized services layered on top of the physical world © 2013 Forrester Research, Inc. Reproduction Prohibited

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Think of this less as “Big Brother” watching

http://www.flickr.com/photos

. . . and more like “Big Mother” helping

The line between creepy and helpful is thin, gray, and curvy.

Creepy or helpful? What your phone/Amex knows: • You have traveled to Mexico. • You have rented a car. • You are staying at the Westin. • The weather there is 92oF.

―We suspect you are driving to Chichen Itza today. Our travel partner is offering a special price on tours if booked with your Amex.‖

Creepy or helpful? What your phone/AMEX knows: • You have traveled to Mexico. • You have rented a car. • You are staying at the Westin. • The weather there is 92oF.

―We see your card was just used to purchase tickets to Chichen Itza. Please enter your 4-digit passcode to confirm you have possession of your card.‖

Commerce … in real time Going forward, the physical world — my shoes, a purse I see, a movie poster at the bus stop — will be catalysts for spontaneous commerce.

Advertising … in real time Mobile tactics such as augmented reality on phones or Google Glass can be used to help travelers find restaurants that fit their tastes, budgets, attire, etc. while on the go.

150 Cal

›Starbuck’s

400 Cal

300 Cal 280 Cal

Personalize Decisions … in real time Mobile will help consumers make the best decisions for them whether they are dieting, gluten-free or have a child with a nut allergy.

D. Near-term opportunities can focus on “old things in new ways” •• Coupons Guided selling Games Location-based offers Promotions Discovery Sweepstakes

Retention

• • • •

• Complementary products • Loyalty programs • Replenishment

Influence

$12B

$1.5B

2012

Ownership

$549M

• Connected social experiences • Customer service • Warranty / product registration

• • • • • •

In-store associate help Price comparisons Product information Product reviews/ratings Shopping lists Way-finding • • • •

mCommerce Mobile POS Payments Wallets

Longer term, retailers must do new things Dynamic offers/content based on context Personalized merchandising in stores Real-time marketing in Google Glass ? Discovery

Retention

• • • •

• Anticipate needs • Suggest replenishment based on product usage / body measures •?

Influence

• Assisted product choice based on needs • Elastic pricing • Image recognition • Product trials • Social shopping •?

$27B

$2.7+B

2016

$28B

• Biometric authentication • Pop-up walls • Virtual stores •?

Ownership • Customer service when/where needed • Value-added services layered on top of products •?

E. Services must evolve in sophistication

Level of mobile sophistication

High

• New products, processes, and services

Simplicity Breakthrough Mobileunique

Enhancement Crosschannel

Consistency Multichannel Nothing

Advanced contextual

• Mobile doesn’t have to be a holistic replacement for other channels or touchpoints. • Migrate services that are frequently used online and are mobile.

Low Evolution of services over time

2. Create the right organization, processes and infrastructure for mobile A. Create a strategy for mobile services overall B. Obtain appropriate senior buy-in, budget, and governance

C.

Engage your IT department to tap backend systems/data

D.

Put a plan in place to handle big data/analytics

E.

Increase the frequency of your release cycles = agile development

Questions?

Thank you.

Julie Ask +1 415 355 6002 [email protected] www.forrester.com