Mobile commerce is taking off in Europe. Retail and travel spend via a mobile phone increased by 70% in 2011. Impulse-buying categories that require little intensive research — such as books, computer software and video games, music, videos and DVDs, and event tickets — are driving a large part of these mobile retail sales. Understanding mobile buying behaviors, the evolution of mobile buyers, and relative mobile spend across Germany, the UK, France, Spain, Italy, the Netherlands, and Sweden are the focus of the Forrester Research Mobile Commerce Forecast, 2012 To 2017 (EU-7), >, and report which has just been published.
The forecast combines insights from the Forrester Research Online Retail Forecast, 2011 To 2016 (Western Europe) with an understanding of smartphone adoption rates and how online buyer sophistication differs from mobile buyer sophistication for each EU-7 country. Smartphone owners are more predisposed to become mobile retail buyers if they have already bought online or if they have already bought mobile apps and digital content. By 2017, mobile retail, travel, and daily deal spend in the EU-7 will rise to €19.2 billion, which will represent 6.8% of online spend. Mobile’s share of total travel spend will be much higher than that seen in retail, as more than 35% of travel bookings for leisure and unmanaged business travel were made online in the EU-7 in 2011.
Over the last three months I’ve presented at 4 different European events on the subject of Mobile Commerce in retail, and in every other speech I’m called on to do, mobile is increasingly at the heart of what I talk about when I discuss the key trends impacting European eCommerce. Its unavoidable.
The growth assumptions are based on the existing Forrester Research Online Retail Forecast, 2011 To 2016 (Western Europe), with simplified category groupings to reflect mobile characteristics. Mobile purchasing behavior and mobile Technographics sophistication are overlaid onto the country-by-country eCommerce growth forecasts to reflect the way in which mobile commerce will grow differently from online commerce across Europe. What this gives us is a picture of how we believe that mobile commerce will evolve for some of the key European markets.
So what are we forecasting?
· Mobile Growth Will Be Rapid, But Adoption Will Be Niche For Some Time Yet. Mobile commerce will represent 6.8% of all online eCommerce sales across Europe by 2017 (mobile only – we exclude Tablets from this figure). This is a significant portion of online sales, with the most rapid growth in the south of Europe.
Even with the increased use of instant messaging, SMS remains the workhorse of mobile — with a 14% increase in the number of SMS messages sent in 2011 compared with 2010. More than 2 trillion SMS messages were sent in the US in 2011, which equates to more than 6 billion SMS messages sent per day. Text messaging users send or receive an average of 35 messages per day. Although by 2017 SMS will dominate mobile content spend less than it does today, it will still remain significant.
More than 80% of worldwide app downloads in 2011 were for Apple and Android devices; these accounted for more than 16 billion downloads. Gaming apps dominate mobile app spending; this is driven by both an increase in the number of users playing games on their phones and the amount of in-game spend, which accounted for more than 60% of mobile gaming revenues. In the US, about 76 million mobile and tablet owners regularly play games on their devices; with only a third of these regularly downloading games, there’s a great opportunity for growth in both mobile advertising and mobile gaming revenues.
Infosys announced last week that Bharti Airtel, India’s leading mobile service provider, has selected its WalletEdge platform to operate Airtel Money, the first mobile wallet service in India. This announcement is interesting from a few different perspectives. First, it will provide a new source of revenues for the Indian telecom industry, which has been struggling with low ARPUs for several years. Second, it’s a boon for the banking industry, which will find a way to accelerate financial inclusion initiatives in line with the recommendations from the Reserve Bank of India. Obviously, the urban Indian consumer will also benefit from the “pay anytime, anywhere” convenience of such a service.
I also look at this deal from an IT services industry perspective, and I believe that it embeds a set of very interesting attributes that will become increasingly prevalent in the way IT services vendors engage with their clients moving forward:
A few days ago at Oracle OpenWorld 2011, I attended a presentation from one of the major consulting companies. The topic: banking in 2020. I heard about big data, the need for real-time analysis of information (in particular from the Internet), and a few other trends. While many of these trends were not new, I could only agree that they would be important in the future, as they align with Forrester’s 2008 research on what banking will look like in the future. (If you are interested in details regarding Forrester’s research on this topic, please see “Financial Services Of The Future: Collaborative Competition Will Be The Norm” and “Banking IT In 2023 Updated,” keeping in mind that 2023 is a metaphor for a longer-term perspective.) However, there was one statement within the presentation that I seriously disagree with.
Have you been sitting on the mobile commerce fence? Ready to make the jump? Good for you, but you may not be prepared for the maze of solutions and vendors at hand to help you implement your mCommerce strategy. The number of vendors and diversity of solutions in the market is quite staggering, and the search for the right solution may feel like shopping in a busy Moroccan market, with an overwhelming choice of wares and vendors bargaining hard for your dollars. Leaving with the right purchase is a daunting task.
However, before you rush into evaluating solutions and signing contracts, eBusiness professionals must take a step back and look at the different implementation paths open to them for mobile commerce. These are:
Using technology from your existing eCommerce platform vendor.
Outsourcing to your interactive agency or systems integration firm.
Building it all in-house.
Leveraging a mobile commerce point solution.
In my latest report, a market overview of mobile commerce solutions for retail, I look at 14 established mobile commerce point solutions that have particular strengths and a proven record of accomplishment in the retail sector. These vendors between them empower the mobile commerce sites and apps for an exhaustive list of who’s who in US and European retail. The report focuses on the respective strengths of the solutions with respect to the needs of retailers. The vendors we looked at were:
While all eyes in the online retail space seem to be on social networks and smartphones these days, we’re seeing an emerging trend with tablets that could be the most interesting of all. Only 9% of web shoppers now have tablet devices, but here’s the big deal — most of those people already own smartphones (as well as PCs, of course), and they are saying that they actually prefer to use their tablets for shopping. Not only that, but the ownership of the tablet device itself actually increases the amount of time that people spend online. And we’re anticipating a hockey stick in tablet adoption in the next five years on top of all that. You can read more about these findings in the report my colleague Sarah Rotman Epps and I just wrote titled, “Why Tablet Commerce May Trump Mobile Commerce,” which is based on findings from our joint research on online shoppers with Bizrate Insights. Some of the most compelling aspects that are helping to drive the shopping experience on the device:
The larger screen. Not surprising, given the choice between a smartphone and a tablet, consumers find it a lot easier to use the latter to surf the net, click on links, and type in the critical biodata to purchase something online, especially since PayPal Express doesn’t seem to be integrated onto most mobile commerce sites yet.
The portability. Consumers love taking their tablets around the house and on the go. The living room is the most common room where the tablet is used, but out of the home is also popular, particularly at restaurants and in airports.
For the past couple of months, we have been working on identifying best practices for application development and delivery teams executing on multichannel strategy. The related report will get published soon. We found that application development and delivery teams need to be successful in the magic triangle of delivering a multichannel solution: 1) tactically; 2) in a strategic way; and 3) fast.
Mobile apps are undoubtedly cool, and executives at leading online retailers have been mandating a presence of their brand in the Apple and Android app stores, but eBusiness professionals must focus on building a cohesive mobile strategy that clearly identifies the case and role for apps within their organizations. Apps are great ways to engage with your customers, but will they deliver incremental revenue above and beyond what the mobile Web is already doing? In her recent mobile commerce forecast, Sucharita Mulpuru explains that mobile commerce is set to transform retail, despite only accounting for 2% of online web sales today. In my new report The State Of Mobile Commerce Apps, I peel back the covers on the hype and take a serious look at why, when, and how eBusiness professionals should approach their mobile app strategy. Some of the issues I explore include:
The mobile web versus app debate. The debate is irrelevant, consumers are using both in equal measures; however, developing an app for apps' sake is missing the point and will only disappoint your customers. eBusiness professionals must develop unique app experiences that deliver multichannel innovations and raise the engagement of the consumer with your brand.
Keeping up with the explosion of consumer touchpoints. Having an iPhone app was the priority back in 2010, but in 2011 many eBusinesses are adding Android, iPad, and Windows Phone 7 apps. The opportunity for apps also extends beyond the consumer. Retailers are investing in apps for store associates empowered with mobile devices, in-store kiosks, and interactive TV.