Reactive whitepaper on mcommerce

1. mCommerce 2012:
The Year After the
Year of Mobile

2. Reactive
mCommerce 2012: The Year After the Year of Mobile
mCommerce 2012:
The Year After the
Year of Mobile
Move 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.
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3. Reactive
mCommerce 2012: The Year After the Year of Mobile
A look at 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
mCommerce options and services that has us heralding the new mobile market.
in Australia
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.
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mCommerce 2012: The Year After the Year of Mobile
A look at L’Oreal Melbourne Fashion Festival
mCommerce
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
in Australia
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.
What is NFC 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
and why is it 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
so important? 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
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mCommerce 2012: The Year After the Year of Mobile
mCommerce > 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
New Payment up the mobile payment push.
Services
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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6. “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.”

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mCommerce 2012: The Year After the Year of Mobile
The Technical 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.
Fight: Mobile Rather than place mobile apps and mobile Web sites in the ring against each other, for a fully-
Apps vs Mobile
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?
Web Sites 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 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,
Platform not mention costs, of implementing a multi-platform approach to customer engagement.
Design 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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mCommerce 2012: The Year After the Year of Mobile
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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9. Reactive
mCommerce 2012: The Year After the Year of Mobile
About Reactive
Reactive 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.
Melbourne
Ph +61 (0)3 9415 2333
Fax +61 (0)3 9415 2399
Email melbourne.enquiries@reactive.com
Sydney
Ph +61 (0)2 9339 1001
Fax +61 (0)2 9380 4787
Email sydney.enquiries@reactive.com
New York
Ph +1 (917) 655 8790
Email us.enquiries@reactive.com
London
Ph +44 (0)20 7550 8200
Fax +44 (0)20 7550 8254
Email uk.enquiries@reactive.com
Auckland
Ph +64 (0)9 309 5696
Email: nz.enquiries@reactive.com
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mCommerce 2012: The Year After the Year of Mobile
References 1. eMarketer, 2011, ‘Mobile Access of Retail Sites Skyrockets in 2011’ http://www.emarketer.com/
Article.aspx?R=1008714
2. Moses, A, 2011 ‘Australia’s white hot smartphone revolution, http://www.smh.com.au/digital-
life/mobiles/australias-white-hot-smartphone-revolution-20110908-1jz3k.html
3. eCommerce Report, 2011, More than 1.3million Australians now M-commerce shoppers http://
www.ecommercereport.com.au/more-than-1-3million-australians-now-m-commerce-shoppers/
4. Kent, Melissa, 2012, Mobile shoppers put on an appy face, http://www.borderwatch.com.au/
news/lifestyle/style/fashion/mobile-shoppers-put-on-an-appy-face/2443904.aspx
5. NFC, 2012, ‘What is NFC’ http://www.nfc-forum.org/aboutnfc
6. Kessler, S, 2011, ‘Near Field Communication: A Quick Guide to the Future of Mobile’ http://
mashable.com/2011/08/11/near-field-communication-guide/
7. Kessler, S, 2011, ‘Near Field Communication: A Quick Guide to the Future of Mobile’ http://
mashable.com/2011/08/11/near-field-communication-guide/
8. eBay press release, 2011, ‘Mobile Shopping Surge: Black Friday Shoppers Find Deals Anywhere,
Anytime Using Smartphones and Tablets, http://www.fiercemobilecontent.com/press-
releases/mobile-shopping-surge-black-friday-shoppers-find-deals-anywhere-anytime-
usi#ixzz1mW3pAmLB
9. eBay press release, 2011, ‘Mobile Shopping Surge: Black Friday Shoppers Find Deals Anywhere,
Anytime Using Smartphones and Tablets, http://www.fiercemobilecontent.com/press-
releases/mobile-shopping-surge-black-friday-shoppers-find-deals-anywhere-anytime-
usi#ixzz1mW3pAmLB
10. Rao, L, Over 1M Merchants Now Use Mobile Payments Platform Square To Accept Credit Cards
http://techcrunch.com/2011/12/13/over-1m-merchants-now-use-mobile-payments-platform-
square-to-accept-credit-cards/
11. Murray, J, 2011, Square vs. Google Wallet: Who will win the mobile payment war? http://
anthillonline.com/square-vs-google-wallet-who-will-win-the-mobile-payment-war/
12. Buchanan, M, 2011, Google Wallet: How Google’s To Swallow Your Real Wallet, http://www.
gizmodo.com.au/2011/05/google-wallet-how-googles-to-swallow-your-real-wallet/
13. Kovach, S, 2012, Google Just Fixed The Bug That Let Anyone Hack Into Your Google Wallet,
http://www.businessinsider.com/google-just-fixed-the-bug-that-let-anyone-hack-into-your-
google-wallet-2012-2#ixzz1mWQoni3a
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