Data And Forecasts

Survey: Nearly 90% Use Smartphones in Retail Stores to Make Buying Decisions

New smartphone user survey data from Thrive Analytics and the Local Search Association (LSA) reinforce the now well-established idea that consumers will share location information in exchange for tangible rewards. We've seen this in our own survey work as well as that of other third parties (e.g., Swirl, OpinionLab). 

The LSA study involved just over 1,000 US smartphone users. It was conducted in January.   

Strinkingly the survey found that 97% of Gen Y, 91% of Gen X and 81% of "young Boomers" (under 53) used their smartphones at least sometimes while shopping in stores. Comparing prices and accessing coupons were the top two reasons.  

Large majorities of each demographic segement (85%+) said that using smartphones in stores makes them smarter shoppers and helps them make buying decisions accordingly. The top four apps used in stores were "mobile search," Amazon, Facebook (among younger users) and a barcode scanner such as RedLaser (eBay).  

The top three motivations (in order) given for being willing to share location with retailers were the following:

  1. To gain loyalty points or rewards
  2. To receive an offer or deal
  3. To receive exclusive or personalized content

 

Mobile-Centric Households Now Outnumber Those with Landlines in US

According to the latest data from the US Center for Disease Control (CDC), roughly 133 million US adults rely exclusively or primarily on their mobile phones at home. That means they either don't have a telephone landline at all or have one but rarely use it. 

The most recent data available are for the first six months of 2013. The CDC reported, "Approximately 38% of all adults (about 90 million adults) lived in households with only wireless telephones; 45.4% of all children (approximately 33 million children) lived in households with only wireless telephones." The CDC explained that younger people, adults with roomates and no kids and those in lower income groups were more likely than others to be wireless only.

The related “wireless-mostly” category is defined as "households with both landline and cellular telephones in which all families receive all or almost all calls on cell phones." According to the report, roughly 43 million US adults (17.7%) live in these wireless-mostly households.

Unlike the wireless-only group, however, wireless-mostly demographics feature better educated and more affulent individuals and families. They can afford to maintain a landline but choose generally not to use it. Most of the people reading this probably fall into that latter group.

Together these two groups represent about 55% of all US adults. This now means that landline users are in the minority.  

Study: Smartphone Users Ready to Buy -- Offline

This morning I received a message in my in-box with the subject line: "Mobile commerce has really arrived." In the associated article a range of data were cited to argue that consumers were doing more and more e-commerce on their smartphones.

While it's true that e-commerce over tablets and smartphones is growing we should be clear about what's really going on out in the real world. Smartphones are widely used by consumers as part of their shopping and purchase research -- between 60% and 80% (or more) use them in stores for product and price lookups.

Marketers routinely undervalue and misunderstand the now critical role of mobile in consumer purchase activity. Part of the reason is tracking/attribution: smartphone owners overwhelmingly convert offline (or on PCs) and much of that behavior is simply not captured. 

New research from comScore, Neustar and 15 Miles reinforces this basic point. The data are based on a December survey and behavioral observation of users. The sample size was just under 5,000 US adults. 

comScore Local Search Study

Source: comScore, Neustar Localeze, 15 Miles

The study found that 78% of local searches conducted on smartphones resulted in a purchase vs. 64% on tablets and 61% on PCs. 

The majority of those purchases (76%) happened the same day and most within "a few hours" of the lookup. This reflects the immediacy of the mobile search user's need. But here's the critical point: Almost 90 percent of those purchases happened offline, in a physical store (73 percent) or on the phone (16 percent). Eleven percent were e-commerce transactions. 

Actual transaction data (as opposed to self-reported survey data) from e-commerce software provider ShopVisible found that 85% of e-commerce transactions in 2013 were PC based, only 4% came from smartphones.

Marketers need to recognize that most smartphone users are going to consult their mobile devices throughout the purchase cycle but largely aren't going to complete a transaction on that device. If they don't understand this behavior and account for it they're going to fundamentally misunderstand the role of mobile and undervalue it significantly.

This is partly why online-to-offline analytics/tracking is such an important development -- and one that we'll be exploring in depth at Place 2014.  

Wearables: After High Interest, High Abandonment

There's a strong belief among tech insiders that "wearables" are an emerging hardware category that's here to stay and perhaps even a new marketing channel in the making. Nielsen consumer research asserts that 70% of US consumers are aware of “wearables" and roughly 15% currently own some form of the technology: 

  • Fitness wristbands -- 61%
  • Smartwatches -- 45%
  • Health tracking devices -- 17%

Nielsen also found that roughly half of its survey respondents were interested in the category: "Nearly half of Americans surveyed expressed their interest in purchasing wearable tech in the near future." Our survey data similarly found a fairly high level of interest: roughly 40% of smartphone owners said they were interested in smartwatches (generally of the same brand as their smartphones). 

A report by Endeavor Partners, published in January (based on Q3 survey data), throws some cold water on all the excitement. The firm says that an online survey of "thousands of Americans" found that 10% of US adults owned or had used an "activity tracker" (e.g., Fitbit, Fuel Band). It didn't address smartwatches as a stand-alone category. 

 

The study also reported high abandonment rates of activity trackers/fitness wristbands. Roughly a third of owners stopped using them within six months of initial ownership and half were no longer using them: 

Endeavour Partners’ research reveals that more than half of U.S. consumers who have owned a modern activity tracker no longer use it. A third of U.S. consumers who have owned one stopped using the device within six months of receiving it. 

This first Samsung smartwatch reportedly experienced 30% return rates. But that's probably a function of the poor design and usability of that device rather than a broad statement about the prospects for the smartwatch category. The Pebble smartwatch is apparently selling well. 

It's still early in the development of wearables and there will be a range of new products of increasing quality and refinement. Hopefully we'll see some "next generation" watches coming out of the Android Wear effort. Apple is also expected to introduce its rumored "iWatch" at some point.  

Yet the Endeavor data offer a sobering counterpoint to all the hype about the category and widespread perception that wearables are an inevitable boom in waiting.

Surveys Show Growing Demand and Usage of Mobile Payments

Two surveys independently released in the past couple of weeks indicate growing demand for and consumer experience with mobile payments. One survey released by Verifone (n=1,000) found that 55% of respondents were interested in mobile payments, with higher percentages (70%) of "millennials" expressing interest.  

In that survey the motivations or perceived advantages of paying with a smartphone included: 

  1. Mobile deals: 45%
  2. Track spending: 45%
  3. Faster: 34%
  4. No wallet: 28%

A separate survey released by Local Corporation (fielded by the eTailing Group, n=1,294) asked a range of questions about mobile user behavior. Among them were several questions about mobile payments. 

The survey found that 27% of consumers had used their smartphones to pay for an in-store purchase at some point. However the materials and discussion released didn't indicate how "in-store" was defined (did it include Starbucks, for example?). Reasons for not using a "mobile wallet" were security (44%) and privacy (36%).

When asked what brands consumers trusted to manage mobile wallets and mobile payments, consumers said:

  1. Visa: 24%
  2. PayPal: 21%
  3. Apple: 15%
  4. Amazon: 13%
  5. Amex: 7%
  6. Google: 6%

It's not clear whether the findings immediately above are statements about the brand in general or indicate any direct experience of usability. The mobile/offline version of Google Wallet in its current form is essentially a dead product.

Apple and Amazon have not yet fully entered mobile payments but are going to do so. Apple has filed patent applications that indicate its intention to get into mobile payments, with its more than 600 million consumer credit cards on file.

We have argued that mobile payments are entering the mainstream through vertical or specialized apps that contain a commerce elment but with offline fulfillment -- Uber, AirBnB, OpenTable are examples. We should continue to see mobile payments "mainstream" and gain increasing momentum over the next five years.

Apps Killing Mobile Web, Facebook Biggest App, Google Biggest Revenues

According to new data released by Flurry apps have solidified their hold on mobile user behavior, claiming 86% of all time spent on the mobile internet. Early prognosticators believed that mobile apps were a temporary bridge to the mobile web and would eventually give way to the "open internet."

That obviously hasn't happened. Perhaps years from now things will be different. 

Earlier this year, consistent with Flurry's report, Nielsen found that about 89% of all time spent in mobile is with apps; 11% on the mobile web. Yet, despite this massive time-spent imbalance, the mobile web still has greater audience reach than mobile apps.  

apps dominate hires resized 600

Among mobile apps, gaming is still the single largest category with 32% of time spent according to Flurry. However Facebook (including Instagram) is by far the dominant individual app, accounting for 17% of all time spent. By comparison YouTube captures 4% and Twitter 1.5%. Apple's Safari browser grabs 7% of time spent and Google's browsers 5%. 

Ad spending in mobile is growing quickly as brands and marketers race to catch up to consumers. According to the chart below Google claims a disproportionate share of ad spend, while Facebook is more or less in balance. By comparision the long tail of apps fail to capture their share of ad spend -- suggesting significant future growth for in-app advertising. 

An app developer and publisher survey conducted this year by App Annie found that only 42% monetized with display advertising.   

ad spend hires v1 resized 600 

Opt-In a Must: Consumer Survey Indicates Retailer Risks with Indoor Location

There have already been several surveys that show consumers are interested in the benefits of indoor location and will share their personal data or opt-in when they're clear on what those benefits are. See, for example: 

A new survey (n=1,024 US adults) from OpinionLab shows that consumers are skeptical about indoor "tracking" and only want to participate in indoor location and marketing programs if they're opt-in. In an article about the survey Fortune sensationalizes the findings "Consumers hate in-store tracking (but retailers, startups and investors love it)."  

That headline overstates the degree to which consumers are hostile to being located in stores. It's very fair to say they're ambivalent and cautious about indoor location, though most haven't had any experience of indoor location at this point and are speaking only in the abstract.

The use of the word "track" is very charged and that's the framing here -- "In your opinion, is it acceptable for retailers to track shoppers’ in-store behavior via smartphone?": 

  • No -- 77%
  • Yes -- 23% 

An alternative question such as "would you be willing to share your location with retailers for benefits X, Y, Z" would have produced a different result. Indeed, how surveys present these issues to consumers really matters (see, e.g., Majority Of Shoppers Want Cross-Channel Personalization.) Accordingly survey results can be manipulated to serve agendas in favor of or against indoor location. 

Another question in the OpinionLab survey similarly predisposes the outcome -- "If one of your favorite retailers were to implement a tracking program in their stores, would you participate?":

  • No -- 63%
  • Yes -- 38% 

This survey found that consumers are open to indoor location if the programs are entirely opt-in (even with the "tracking" framing) -- "In your opinion, what is the best way for retailers to approach in-store tracking?"

  • Opt-in -- 64%
  • Opt-out -- 12%
  • No tracking at all -- 24%

Consistent with earlier surveys, consumers say they would opt-in for discounts and other incentives -- "What incentives would motivate you to participate in a retail tracking program?": 

  • Save money / price discounts 61%  
  • Free products 53% 
  • Chance to win a big prize (vacation, HDTV) 28%  
  • Better shopping experience overall 24% 
  • Unlock new experiences and awards as you shop the aisles 23% 
  • Personalized attention from store associates 12% 

What this survey, like others before it, shows is that consumers have real privacy concerns about indoor location and tracking. However, the word "tracking" is one that triggers an immediate, negative response and associations (i.e., "surveillance," "spying"). By contrast, discussing the benefits of indoor location produces a very different set of findings (see other surveys).

Yet the OpinionLab survey also shows that uncer the right circumstances consumers will share their location where retailers ask for permission (opt-in) and the benefits are sufficiently enticing and clear. 

Despite my criticisms of the framing of the OpinionLab survey I think it does illustrate that there are clear risks for retailers around indoor location if they don't respect consumer privacy and don't get the messaging to consumers right.

At the upcoming Place Conference Jules Polonetsky, Executive Director and Co-chair of the Future of Privacy Forum, will moderate a session on consumer privacy: "Indoor Location & Privacy: Steering Clear of the ‘Creepy Line.'"

Location Analytics without a Consumer Value Angle May Not Fly

An article in HBR today discusses what we've known and been writing about for some time now: location analytics is a major "must-do" opportunity for retailers and others (airports, hospitals, casinos, colleges, mall owners, entertainment venues). See also: Report: "Mapping the Indoor Marketing Opportunity."

The HBR piece discusses various provider-vendors (RetailNext, Placed, Euclid) and retail scenarios (operations, staffing, merchandising) that will benefit from indoor and offline analytics. However one of the major issues in the space is privacy and consumer acceptance. The article neglects to discuss privacy at all, although many of the comments raise the issue.  

Location analytics can be done in such a way to avoid any PII collection while giving customers the ability to opt out of any indoor tracking (save closed circuit TV). The Future of Privacy Forum has introduced an opt-out (a kind of do not track indoors) website SmartStorePrivacy.org. This is a voluntary thing at the moment, though with many analytics firms signing on. But it will likely become mandatory at some point in the near future.  

Despite ominous portrayals of indoor location by some journalists, it's not a very scary thing when you actually see it in action. Surveys conducted by Opus Research and others have found that most consumers will happily opt-in to location tracking when there's a value exchange that they understand.

Affirming this again, Swirl released some new consumer survey data (n=1,000 US adults) that found: 

  • 77% of consumer respondents would opt-in to location tracking/awareness as long as they received enough value in return 
  • Consumers are most interested in in-store push notifications (80%) around promotions, but also in price comparison tools, relevant content and loyalty program integration 
  • 72% are more likely to buy off an in-store promotion vs. an online offer or email promotion  
  • 62% said they would use apps in-store more often if their content that was relevant/personalized to the shopper’s interests and in-store location

Whether or not these specific findings are replicated at the same levels by other surveys, their general sentiment is: consumers are receptive to in store promotions and content and happy to share location information with a clear value exchange. 

Where indoor location and privacy become potential issues is when there is no consumer experience: if retailers or others are simply collecting data without offering value in return to consumers. Under such circumstances (where opt-out is offered or later required) we might see substantial numbers of consumers opting out of indoor location/tracking. 

My belief is that ultimately the FTC will compel explicit disclosures and signage where location analytics and tracking are present giving consumers the ability to opt out. Burying a notification such as "by using our WiFi you agree to let us track you" in terms and conditions isn't going to fly for much longer. 

Mobile Devices Generating 30% Of Global, US Internet Traffic

Data from e-commerce platform ShopVisible's 2013 year in review report argues that mobile devices (smartphones + tablets) were responsible for 30% of all traffic to its e-commerce clients' last year. Mobile devices, however, drove far fewer e-commerce sales (15%) compared with their traffic percentage. 

To determine how representative of the broader market these ShopVisible figures were I consulted StatCounter. That site confirmed that 30% of traffic in the US market is now coming from smartphones and tablets. The percentage is nearly identical globablly. For retailers and those in the "local" segment, the percentages are 10 or more points higher. 

Statcounter mobile traffic

Source: StatCounter US platform traffic comparison

Europe's mobile share of traffic is lower, probably because of slower Eastern European smartphone adoption. According to StatCounter below are the relative percentages of internet traffic by platform (rounded): 

US market

  • Desktop: 70%
  • Smartphones/mobile: 21%
  • Tablets: 9%

Europe 

  • Desktop: 80%
  • Smartphones/mobile: 13%
  • Tablets: 7%

Globally

  • Desktop: 72%
  • Smartphones/mobile: 22%
  • Tablets: 6%

Yesterday the Pew Research Center put out a survey based report (1,000 US adults) that reflected on the 25 years of the internet since Tim Berners-Lee wrote his seminal paper about a distributed network of computers and documents linked together by “hypertext.”

Here are the high-level US data from that report: 

  • Computer use: 81%
  • Mobile phones (all types): 90%
  • Internet use: 87%
  • Smartphone ownership: 64% (others say 65%) 

We can anticipate that smartphone ownership will eventually approach 100% of the mobile population. That may take three to five years however. In the near term we'll see 70% smartphone ownership (at least) by the end of 2014.

An increasing number of smartphone and tablet owners prefer or use those devices first vs. PCs. However the majority of e-commerce transactions (not counting things like restaurant reservations and Uber payments) are likely to continue to take place on desktop computers. 

The conversation about the role of mobile vs. PCs shouldn't be an "or conversation" it's an "and conversation." 

Webinar Today: Join Aisle411 and iInside for Indoor Case Studies

At 1pm Eastern/10 Pacific today we'll be hosting a new webinar: Indoor Location - Early Adopter Case Studies and Lessons Learned. It will feature Aisle411 co-founder Matthew Kulig and iInside EVP Jon Rosen. The emphasis is not on theoretical information but on what's actually occurring in the market -- today.  

Rosen will be talking about B2B case studies from current in-market deployments. He's going to cover:

  • Retailer KPIs
  • Measuring the impact of operations, merchandising and marketing on customer behavior in a specialty retail context 
  • Using indoor analytics to benchmark online marketing campaigns
  • Optimizing checkout selling in a grocery context
  • Using indoor analytics to measure and address showrooming 

Kulig will be discussing B2C cases, including the following:

  • Indoor app-based search and ad CTRs
  • Retailer monetization through branded in-app advertising
  • Location and intent based recommendations in store apps  

I'll be offering a general overview of the state of the market and offering attendees a free copy of our recent "Mapping the Indoor Marketing Opportunity" report (only available to real-time attendees). 

The webinar will be eye-opening and instructive to indoor neophytes and those with even considerable knowledge of this emerging market. Register now and show up later today.  

Twitter, Yelp and Pandora Are All Now Mobile Companies

Yesterday Twitter, Yelp, AOL and Pandora released quarterly earnings. AOL said that mobile was one of several drivers of 50% ad revenue growth. Yet it didn't break out any mobile numbers. The other three did, illustrating the degree to which each is or has become a mobile-centric company. 

Below are the mobile highlights . . .  

Twitter:

Twitter beat financial analysts’ expectations with $243 million in Q4 2013 revenue ($220 million in ad revenue). However that strong revenue growth was undermined by weak user growth. The company said it had 241 million monthly active users and nearly as many (184 million) mobile users.

Amazingly, 75% of the company's ad revenue for Q4 came from mobile. In real dollar terms that represented $165 million for the quarter. 

Yelp: 

Yelp reported just under $71 million in Q4 revenue. There were 53 million mobile users (120 million total users). Yelp also reported that 30% of new reviews were coming from mobile devices, since it started allowing reviews to be written via mobile. 

Yelp added during the earnings call that 59% of search queries were from mobile: 46% from its app vs. 13% from the mobile web. In addition, 47% of ad impressions were served on mobile devices in Q4. 

Pandora:  

Revenues for the full year were roughly $638 million. Pandora brought in just over $200 million in Q4. Of that, $162 million was ad revenue. Mobile was responsible for 72% of that ad revenue or just under $117 million. The company also said that 80% of Pandora listening happens via mobile devices

All three companies started on the PC and have evolved into mobile-centric entities in response to user behavior. Indeed, Pandora's iPhone app is largely responsible for the company surviving and going public. Overall for these companies most of the ad growth, revenue and usage is now in mobile.   

Starbucks: 5M Mobile Payments Transactions Weekly

Last week Starbucks announced its quarterly earnings. Most interesting to us about the announcement and related conference call was the company's discussion of mobile and specifically mobile payments. 

CEO Howard Schultz said on the earnings call that, "together mobile and Starbucks card payments represent over 30% of total U.S. payment." He added that roughly 10 million customers are using the company's in-app payments capability. Schultz also reported that nearly "5 million mobile transactions [are] taking place in our stores each week." 

There are several things interesting about this. First the volume and scale are considerable. These are Starbuck's best customers generally speaking -- Schultz said that 50%+ of the mobile payments customers are "gold status" members -- but the convenience of mobile payments is also helping reinforce their loyalty to the chain.  

Unlike "horiztonal" mobile wallets (e.g., ISIS, Google Wallet) this is the kind of scenario driving mobile payments in the market today: a very specific use case with clear benefits to consumers. On the strength of these data and general recognition of the opportunity we'll see more and more QSR and similarly situated restaurant chains adopt an app-based mobile payments model this year. 

Study: Push Notifications Significantly Boost App Engagement, Retention

Push notifications and mobile marketing platform Urban Airship released data last week that shows how push messaging can boost engagement and app-user retention. The company, which provides notifications functionality for publishers and app developers, compared how opted-in push messaging users behaved vs. those who had not elected to receive notifications in six verticals.

Those verticals were: retail, media, entertainment, gambling, sports and games. The study covered 2,400 apps and more than 500 million push messages during a six month period. At a high level Urban Airship found:

  • Users who receive push notifications open apps more frequently and are much better retained
  • Push messaging drives higher average monthly app opens per user

The company also reported that on average just under half of app users opted-in to receive push notifications. Though this is logical and may be intuitive, this is the first time the impact of push notifications has been documented empirically to my knowledge. 

The engagement and retention differences among those who received notifications vs. app users who did not varied by industry. But in all cases engagement and retention were boosted, sometimes dramatically. 

It may be that those opting-in were more favorably inclined toward the publisher or app and thus were predisposed to be more engaged with the content. However I think it's beyond dispute that push notifications, if used judiciously and correctly, can boost app engagement.  

The problem is that most requests to allow notifications come immediately upon download and often before someone has had an opportunity to see the value of an app or of notifications. I routinely opt out because I fear they'll be abused by publishers and I don't want to be constantly interrupted. 

Publishers, retailers and marketers should do a better job of explaining the benefits of turning on push messages for the end and perhaps not request an opt-in immediately upon download. It would also be interesting to know, for the 50%+ who did not opt-in, what were their thoughts and rationales.

Pizza Hut: Half of 'Online' Orders Now Come from Mobile

It's amazing to think that Pizza Hut has been doing online ordering for 20 years. That would mean Pizza Hut took its first online order in 1994 -- way ahead of the curve. And when it comes to mobile Pizza Hut again appears to be ahead of the market.

Today, according to Pizza-industry publication Pizza Marketplace, roughly 30% of all Pizza Hut orders come from the internet. But half of those are now coming from mobile devices, with momentum favoring mobile (smartphones + tablets) over the PC. 

The Pizza Marketplace interview is with Pizza Hut's Kevin Fish, senior e-commerce manager. He sums up the company's attitude toward mobile as follows: 

It's important that we're where our customers are and that our experience meets and exceeds their needs. The app offers us the opportunity for a highly engaging and personalized experience. Meeting our consumers at their point of need is become more and more important as technology continues to advance. Our opportunity now was to provide the best experience in the industry with enhancements that meet those consumer demands.

Pizza Hut is using its app to not only deliver services but to engage and cement the loyalty of its users. The company also uses location to deliver specific local promotions and offers that aren't necessarily available in all markets nationally.

I'm not a fan of Pizza Hut pizza but the company really has the right attitude toward multi-channel marketing and engagement -- with its mobile app (and all the personalization it allows) now at the center of its "online ordering" strategy. 

The Case Against "Shipments" and in Favor of Actual "Usage"

Many analyst firms that estimate mobile device market share rely on "shipments" data. Those include IDC, Gartner, NPD and Strategy Analytics, among others. Few of these firms rely on internet traffic and actual usage or sales data to fuel their estimates and forecasts.

The reason for this is simple: shipments data are easier to get than sales and usage data. While these estimates can be "directionally" correct they're often wildly inaccurate as a practical matter. Indeed, they often misrepresent what's really happening "on the ground." Even actual sales data often don't present an accurate picture of the marketplace. 

Consumer survey data, such as used by comScore, Nielsen and Kantar for market-share projections, are in most cases better and more reliable than shipments data (and in some cases sales data). Best of all is actual usage or traffic data. A very clear case-in-point is the tablet market.

IDC released an updated tablet-forecast earlier this month. It shows Android tablets with a global market share of 61% and the iPad with a 35% share. 

IDCtabletforecast

Looking only at these estimates, one gets the clear sense that the iPad has lost momentum and its preeminent place in the tablet market -- in the way that the iPhone ceded market share to Android handsets. The only problem with this shipments-centric forecast is that it bears almost no relationship to the reality "on the ground."

Checking actual tablet-generated traffic on a global basis we see that the iPad has a 74% share vs. 23% for Android. In Europe the story is much the same. In the US the iPad has a 79% share of tablet traffic. Other traffic-data sources show a comparable if slightly lower figure.

The aforementioned numbers are from StatCounter. Net Marketshare data similarly show the Safari browser as the dominant browser (56%) among mobile devices (smartphones + tablets) vs. 25% for Android (or 33% if Chrome is included; however Chrome is used on iOS devices too). Data from ad network Chitika also show that the iPad's share of tablet-based web traffic in North America is around 80%. 

What are we to make of the massive discrepancy between the IDC 2013 estimates and these three traffic sources? Perhaps it's not important to try and reconcile these figures. Rather we should be asking which data "matter"? The answer is: usage is what matters.

Usage matters to developers, publishers and marketers trying to allocate budget and resources. What if millions of Kindles were given as gifts but later sat on bedside tablets, used only occasionally or in very limited ways? The simple notion that they're "out there" is irrelevant if they're not being used. 

Collectively we should reject device "shipments" (and even sales) as a definitive market-share metric. Instead the industry should look at more concrete metrics such as traffic and other usage-based data that show what's actually happening in the world.

In the end this is what really matters to everyone, including investors. Even reliable consumer survey data about device possession and usage are better than shipments figures. Actual traffic data are less susceptible to misinterpretation (or manipulation). 

Usage doesn't work as a forecasting tool for obvious reasons. Here projections will need to be based on some mix of assumptions and sales trends and other data. But the degree that the media and tech industry simply pick up and run with these regular shipments numbers without comparing them to actual traffic or other usage data -- I've been guilty myself -- is sloppy and misleading.

Xmas Numbers Roundup: 48% of Traffic Mobile, Chromebook's 20% Enterprise Surprise

Much like US retailers relentlessly pumping out marketing emails before, during and immediately after Xmas, marketing companies and data vendors didn't rest either. Below I've rounded up some of the recent data they released immediately before and after Xmas.

Chromebooks saw impressive sales gains in 2013 according to NPD Group. The Google OS laptops took a surprising 21% of all US enterprise notebook sales in 2013. NPD reported that overall Windows and Mac sales were down, while Chromebooks and Android tablets were up. 

 

It remains to be seen if these numbers are accurate, based on actual usage data. Regardless, the low cost and nearly disposable nature of Chromebooks is starting to put pressure on Windows at the low end of the market. I wrote about Microsoft getting squeezed from both ends earlier this month on Screenwerk. However I would not have predicted the apparent enterprise success of Chromebooks. 

When the smoke clears after January 1 we'll hear that millions of tablet devices were purchased and delivered as gifts in Q4, with iPads being the overall winner despite the higher price tag. StatCounter data show 79% of tablet-based US internet traffic coming from iPads vs. 14% from Android tablets. 

Continuing an established pattern, tablets were responsible for more than twice the volume of online sales vs. smartphones. That's according to IBM which also reported that on Xmas day e-commerce sales from "iOS [devices were] more than five times higher than Android."

The company also said that on Xmas mobile devices generated 48% of all US online traffic. That's a massive number and probably where the entire internet is headed by 2015. Currently StatCounter reports that 26% of North American traffic is coming from mobile devices. We should see that number grow to 40% or more a year from now. 

Finally, as indicated above, many people were deluged by promotional email on Xmas itself (e.g., "buy something for yourself"). Holiday e-commerce overall was up roughly 10% over last year with a few $1+ billion days. However e-commerce growth and spending were less than anticipated this season and something of a disappointment. 

Happy New Year.  

Apple iBeacon Deployment Lends Further Cred to Indoor Location

Earlier this year Opus Research held the first conference dedicated to indoor location and its marketing implications: The Place Conference. The theme of that event was how indoor location technology and mapping would change online and mobile marketing across the board, bringing the digital and offline worlds closer together. 

At the event we explored the technology, marketing scenarios, privacy considerations, analytics and customer experience improvements that flowed from use of indoor location technology. Three months later we're starting to see increasing momentum in the segment, with new deployments, announcements and some acquisitions (which will increase next year).

Indoor analytics provider RetailNext, one of the speakers at the Place Conference, recently announced the acquisition of Nearbuy Systems. And earlier today AP reported that Apple was now rolling out Bluetooth Low Energy (BLE) beacons to all of its 254 retail stores. That will pressure and/or embolden other retailers to follow Apple's lead. 

Under the radar, most US retailers (and others) have to varying degrees been experimenting with indoor analytics and location. However they've been hush-hush about it, for fear of being criticized as Nordstrom was when it disclosed it was using indoor analytics. But greater public discussion and education around indoor location will change the tone of coverage from "spying" to focus on consumer and B2B benefits. 

Apple's March 2013 acquisition of WiFiSlam helped raise the profile of indoor location. The company's new rollout of iBeacons across its retail network will further legitimize the segment.

Indoor location is one element of a larger "ecosystem" of proximity marketing that includes geotargeted mobile advertising, notifications, analytics and online to offline ROI tracking. Mobile payments are also in this mix (see PayPal Beacon). Next year will be an eventful and exciting one for indoor location and place-based marketing. 

Place 2014 is coming soon. 

Report: the iPad Drove Nearly $500 Million in E-Commerce This Weekend

It makes sense that traditional retailers would handily beat their online only counterparts (save Amazon) this past weekend. That's according to data from Adobe.

We now live in a multi-platform, multi-device world. People move between PCs, tablets and smartphones just as they move from online to stores and back. They also generally prefer the tactile and social experience of shopping offline. Roughly 95% of retail spending happens in physical stores according to the US Census Bureau. 

According to Adobe's data, "Traditional brick-and-click retailers are outselling their online-only competitors so far this year at nearly a 3-to-1 ratio." That's because they offer more trusted brands, and online shopping experience and a way to physically examine and immediately buy products and gifts offline. 

Location analytics company Placed offered the following data on the most-visited offline stores on Black Friday:

Screen Shot 2013-12-01 at 7.43.02 AM

Consistent with others, Adobe reported that 24% of online sales this past weekend took place on mobile devices. The iPad was the preferred "shopping companion device, representing nearly half a billion dollars ($417 million) in sales during these past two days, followed by the iPhone and Android phones at $126 million and $106 million, respectively." 

Adobe estimated that Thanksgiving and Black Friday saw just under $3 billion in online spending, which was an increase of 30% over last year. The company projects that e-commerce sales today, "Cyber Monday," will exceed $2 billion ($2.27 billion). 

Mobile Devices Drove Nearly 40% of Online Traffic Black Friday Weekend

Consistent with pre-Thanksgiving weekend surveys, mobile devices (at home and in the store) played a big role on "Black Friday" and will continue to do so throughout the holiday season. Among others, IBM released a trove of US e-commerce and traffic data for Thanksgiving and Black Friday weekend shopping.

Here's a snapshot of some of the IBM data: 

  • Mobile devices drove more than 39% of online traffic (smartphones 24.9%, tablets 14.2%)
  • Mobile e-commerce was 21.8 percent of total US online sales on Black Friday (tablets: 14.4%, smartphones: 7.2%)
  • iOS devices generated 28.2% of mobile traffic; Android 11.4%
  • iOS was responsible for 18.1% of overall e-commerce sales vs. 3.5% for Android

Separately, e-commerce analytics provider Custora reported that "almost 40%" of online buying on Black Friday came through mobile devices. I'm quite skeptical about the accuracy of this figure; it seems inflated or drawn from too small a sample. IBM's mobile commerce figure is 22%, which is more plausible.

Below is the Custora breakdown of overall US Black Friday e-commerce sales by device category:

  • PC: 63%
  • Smartphones: 23%
  • Tablets: 14% 

While comScore has argued in the past that smartphones are outpacing tablets in terms of mobile commerce -- which makes logical sense because there are many more smartphones -- I'm doubtful of such claims. IBM's figures seem more (directionally) accurate: tablets: 14.4%, smartphones: 7.2%.

Custora said the following about the distribution of mobile commerce by platform:

  • iOS: 84%
  • Android: 16%
  • Other: 1%

We could look at a bunch of other reports and try to determine a consensus about how much e-commerce actually took place via smartphones and tablets. What's more important is the recognition that mobile devices are being widely used by US consumers for shopping and product research, and that serious "m-commerce" is now starting to happen (especially on tablets).

Another interesting fact from the IBM data: "on average, retailers sent 37% more push notifications . . . during the two day period over Thanksgiving Day and Black Friday when compared to daily averages over the past two months." The company also said that retail app installs grew by 23% compared with daily averages over the preceding months.

Apple Makes Incremental US Share Gains Against Android

Earlier this afternoon comScore reported its September US smartphone market share numbers. Nielsen has said that 64% of US adults now carry smartphones; however comScore asserts the number is 62%.

Android continues to be the dominant operating system, followed by the iPhone. However Android lost some ground this month though Samsung gained share. All the other Android OEMs are basically a diminishing sideshow to Samsung. 

 comscore Sept smartphone share

Microsoft also saw a small bump for Windows Phones. It has had considerable success in Europe because of the continuing strength of the Nokia brand but little success to date in the US market. Perhaps that will improve as BlackBerry users are forced to change platforms as they upgrade.   

The numbers above probably still do not reflect sales of the iPhone 5s and 5c, which went on sale on September 20 in the US. The October figures should better reflect the iPhone 5s/c impact on the market. 

comscore Sept smartphone share

Perhaps most interesting is the data about leading mobile apps and web properties. Overall Google has the greatest mobile reach, although Facebook continues to have the single most popular app. This is very analogous to the iPhone and Android, where Facebook is like the iPhone in this example.

Google Maps saw some unexpected loss of usage and reach vs. last month, dropping from the fifth most popular app to eighth position.  

. top mobile properties September 2013