reactive whitepaper on mcommerce

mCommerce 2012: The Year After the Year of Mobile

mCommerce 2012: The Year After the Year of MobileMove over eCommerce, mCommerce has now stolen the show and is leading the way in terms of remaking the way people shop. With more consumers than ever turning smartphones into shopping aids, mobile technology is encouraging retailers to look for innovative ways to enter into a relationship with potential customers.

This whitepaper, produced by Reactive, aims to help businesses define what benefits they could derive from mobile commerce and how it creates more opportunities for their brand. While we believe mCommerce isn’t here to replace brick and mortar shopping experiences, or even online shopping, its value is to enhance these experiences for the consumer.

ReactivemCommerce 2012: The Year After the Year of Mobile

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While mCommerce has been growing dramatically (a recent eMarketer report predicts that mobile commerce sales in the US are projected at $11.6 billion1), it is the emergence of new payment options and services that has us heralding the new mobile market.

Australians are now leading the smartphone revolution, with smartphone penetration nearing 50% at the end of 20112. Along with a growing rate of owners, recent data from eBay shows that 1.3 million Australians have adopted mCommerce and are shopping on their phones3.

“Retail purchases have been assumed to sit in one of two camps; offline or online, but this distinction no longer exists. With portable shop windows sitting in consumer’s pockets, Australians are more empowered than ever before to research products and get the best possible price before completing their transaction.”

Deborah Sharkey, Vice President, eBay Australia

Australians retailers are now scrambling to get on board in the face of such growth but there are already some brands that are pioneering mCommerce solutions for their digitally conscious consumer.

Sportsgirl

An Australian fashion retailer for young women, Sportsgirl has been experimenting with mobile strategies as their target market are big users of the latest smartphones and are ready to engage with mobile marketing from the brand.

One of their most recent mobile campaigns focused on bringing QR codes to their customer via their window displays, Web site and social networks. The Join Us QR Campaign encouraged their customers to scan a code featured on displays.

Once scanned, the code enables users to stream or download an exclusive style guide video which they could share with their friends via social media links. To support this campaign, Sportsgirl ran instore events where customers were invited to learn from ‘QR experts’ who taught them how to use the technology on iPads and iPhones.

Another recent example is the use of windows in their Chapel Street store to promote mobile shopping, with QR codes again being used to allow passerbys to scan and shop from their phone.

Sportsgirl strategic brand manager Prue Thomas said that “mCommerce is a perfect fit for us”4 and identified their customers as mobile-savvy.

Some savvy marketers have pointed out similarities between Sportsgirl’s QR code campaign and Tesco’s award-wnning campaign earlier in 2011 in which the supermarket giant, known as Tesco Home Plus in Korea, created a virtual store in the subway where commuters can buy their groceries out of a virtual wall. The campaign won three awards at Cannes International in 2011, including the highly coveted Grand Prix, the festival’s highest awards.

Woolworth’s have also launched a similar campaign, using their mobile shopping app to scan product barcodes on bus shelter and outdoor ads.

A look at mCommerce in Australia


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L’Oreal Melbourne Fashion Festival

Australia’s biggest fashion event will launch a mobile app at this year’s L’Oreal Melbourne Fashion Festival called ‘Shop the Runway’. The app will allow attendees to share the show experience with their friends and then buy items straight from the runway via their smart phones.

Pocket Cinema

With over 30,000 downloads monthly, Pocket Cinema, developed by Event Cinema, has been declared a box office success. The iPad/iPhone app allows users to track down what is showing, where to see it, watch a trailer and buy a ticket. The popularity of the app has taken it into the global top 25 apps in the entertainment category.

A look at mCommerce in Australia

Near Field Communications or NFC as it is widely known, is a short-range, wireless technology that make transactions, exchanging digital content, and connecting electronic devices possible with just a touch.5 Some of the benefits of using NFC technology is that it works with contactless smart cards and readers, so it can be used on public transport, it’s easy to use and it has a similar application as a bar code, so you can add more information to any object by integrating a tag.6 It is NFC’s short range wireless technology that makes it appealing for new payment services as the range of about 1.5 inches, makes it a good choice for secure transactions, such as contactless credit card payments.7

What is NFC and why is it so important?


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mCommerce > New Payment Services

We’re getting closer to the point where wallets become obsolete. New payment services have emerged that enable people to buy, sell and pay purely from their smart phones and are stepping up the mobile payment push.

A record number of U.S consumers turned to their smartphone during ‘Black Friday’ in November 2011. Digital retail services provider GSI Commerce reported a 254% increase in mobile-based sales compared to 20108 while PayPal also experienced a 516% year-on-year increase in global mobile payment volume, with the number of consumers shopping via PayPal mobile services growing 371% and 148% compared with the average Friday.9

While PayPal mobile services can record big numbers during holiday sales, payments services like Square and Google Wallet are doing this for new customers every day.

Square

Unlike the fledgling Google Wallet and other Near Field Communications (NFC) mobile payment services that promise to replace traditional point-of-sale technologies, Square isn’t replacing anything—which is why it’s gotten so big, so fast.

Jason Ankeny, Writer, Marketing Zeus.

Square is a mobile payment system that allows retailers to accept credit-card payments through a mobile phone.

Created by Twitter cofounder Jack Dorsey, Square is growing at rapid speed. In December 2011, they announced that over one million merchants are now using Square10 to accept credit cards.

The value of Square for small business owners was obvious from inception. Square offers flat pricing, regardless of the type of transaction or size. Unlike merchant accounts, Square does not have a per-transaction fee, making it ideal for businesses like coffee shops, cab drivers and market vendors.

But now, big businesses like US phone carrier T Mobile and Walmart are getting on board. Even US President Barack Obama is using Square to accept fundraising donations. While the service hasn’t appeared in Australia yet, we’re eagerly awaiting its presence.

Google Wallet

While tech sites like to proclaim a war between Square and Google Wallet11, the easiest way to define both services is that Square has always been for small businesses and adds a new feature to old technology. Google Wallet is targeting already established retail giants and promoting new technology to the consumer. And unlike Square, Google Wallet hasn’t set the world on fire…yet.

Google Wallet is an app that lets you pay for things using your phone, either by typing your credit card numbers or loading up gift/pre-paid cards.

Using an NFC enabled mobile phone (such as the Samsung Galaxy Nexus), you tap a PayPass terminal to pay. Google claims there’s a lot of security built into the NFC chip, which stores and transmits credit card information.

The NFC antenna is turned off when the screen off, so it can’t be ‘scraped’, and the secure element is only turned on when the wallet is unlocked and enabled for payment12. However, in February 2012, a bug was discovered in the NFC chip which enabled anyone who held your phone to access your money13. Google suspended the sale of new prepaid cards for a couple of days while the bug was being fixed.

While this has been a PR problem that Google Wallet didn’t want, it has enough high profile partners like Citi Bank, MasterCard and merchants like Subway and American Eagle to weather this small storm.


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“Using responsive design, brands can deliver experiences that are dynamically formatted to work on the widest range of screen sizes from the largest desktop displays through to the smallest web-enabled mobile handsets.”

The Technical Fight: Mobile Apps vs Mobile Web Sites

As the buzz around the merits of native applications versus mobile Web sites gets even louder, what is even more important to realise is that the two platforms should evolve alongside each other.

Rather than place mobile apps and mobile Web sites in the ring against each other, for a fully-integrated digital strategy it is best to combine both in complimentary roles to provide the best contextual user experience in any environment. So what is best for your brand?

Mobile Apps

Simple to download, often free, and with greater control over the user-experience, Mobile apps enable brands to go beyond what they could deliver in a mobile Web site, are fast and reliable.

However, with the potential for downloading a mobile app for every product, company or service you use, it can be difficult to organise, annoying to update frequently and many apps are exclusive to one mobile operating system (e.g. iPhone, Android or Windows).

Mobile Web site

Some of the advantages mobile Web sites have over native apps are that they are often quicker to develop, more cost effective and can be optimised to run on a wide range of handsets.

But unlike an app, the user must always be connected to the Internet, and the increased flexibility has a trade-off in the level of integration possible with the mobile phone hardware (such as the camera and GPS).

Cross Platform Design

Brands need to understand how to effectively communicate with customers across each platform in a meaningful and high quality way. This becomes even more challenging given the unique considerations, not mention costs, of implementing a multi-platform approach to customer engagement.

Responsive Design

‘Responsive design’ can be a useful approach for brands wanting to achieve a consistent result across several platforms.

Using responsive design, brands can deliver experiences that are dynamically formatted to work on the widest range of screen sizes from the largest desktop displays through to the smallest web-enabled mobile handsets. It is a guarantee for brands that their site is responsive to the type of device from which it is being accessed.

A still emerging technology, Responsive design will have a large part to play in mCommerce in 2012 – with online retailers building cross-platform online stores that display equally well on a mobile, tablet or desktop computer.


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Conclusion mCommerce is not about the channel, but about the customer. The technological advances mentioned in this whitepaper are reflective of how control of shopping has shifted from the retailer into the hands of the customer, literally.

Retailers need to ensure they turn up the volume of their mobile strategies and be in a position to offer their customer a great shopping experience whether they are at home, in-store, or on-the-go.

The time to move on mCommerce is now.


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About ReactiveReactive is an award-winning digital agency specialising in strategy, creative, technology and marketing with over 95 staff across our five offices in Melbourne, Sydney, New York, London and Auckland.

Please contact us to discuss your online communication requirements.

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Ph +61 (0)3 9415 2333 Fax +61 (0)3 9415 2399 Email [email protected]

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eMarketer, 2011, ‘Mobile Access of Retail Sites Skyrockets in 2011’ http://www.emarketer.com/1. Article.aspx?R=1008714

Moses, A, 2011 ‘Australia’s white hot smartphone revolution, http://www.smh.com.au/digital-2. life/mobiles/australias-white-hot-smartphone-revolution-20110908-1jz3k.html

eCommerce Report, 2011, More than 1.3million Australians now M-commerce shoppers http://3. www.ecommercereport.com.au/more-than-1-3million-australians-now-m-commerce-shoppers/

Kent, Melissa, 2012, Mobile shoppers put on an appy face, http://www.borderwatch.com.au/4. news/lifestyle/style/fashion/mobile-shoppers-put-on-an-appy-face/2443904.aspx

NFC, 2012, ‘What is NFC’ http://www.nfc-forum.org/aboutnfc5.

Kessler, S, 2011, ‘Near Field Communication: A Quick Guide to the Future of Mobile’ http://6. mashable.com/2011/08/11/near-field-communication-guide/

Kessler, S, 2011, ‘Near Field Communication: A Quick Guide to the Future of Mobile’ http://7. mashable.com/2011/08/11/near-field-communication-guide/

eBay press release, 2011, ‘Mobile Shopping Surge: Black Friday Shoppers Find Deals Anywhere, 8. Anytime Using Smartphones and Tablets, http://www.fiercemobilecontent.com/press-releases/mobile-shopping-surge-black-friday-shoppers-find-deals-anywhere-anytime-usi#ixzz1mW3pAmLB

eBay press release, 2011, ‘Mobile Shopping Surge: Black Friday Shoppers Find Deals Anywhere, 9. Anytime Using Smartphones and Tablets, http://www.fiercemobilecontent.com/press-releases/mobile-shopping-surge-black-friday-shoppers-find-deals-anywhere-anytime-usi#ixzz1mW3pAmLB

Rao, L, Over 1M Merchants Now Use Mobile Payments Platform Square To Accept Credit Cards 10. http://techcrunch.com/2011/12/13/over-1m-merchants-now-use-mobile-payments-platform-square-to-accept-credit-cards/

Murray, J, 2011, Square vs. Google Wallet: Who will win the mobile payment war? http://11. anthillonline.com/square-vs-google-wallet-who-will-win-the-mobile-payment-war/

Buchanan, M, 2011, Google Wallet: How Google’s To Swallow Your Real Wallet, http://www.12. gizmodo.com.au/2011/05/google-wallet-how-googles-to-swallow-your-real-wallet/

Kovach, S, 2012, Google Just Fixed The Bug That Let Anyone Hack Into Your Google Wallet, 13. http://www.businessinsider.com/google-just-fixed-the-bug-that-let-anyone-hack-into-your-google-wallet-2012-2#ixzz1mWQoni3a

References


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reactive whitepaper on mcommerce

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