Data And Forecasts

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

In-Store Behavior: EU5 vs. US Smartphone Owners

Yesterday comScore released data about in-store smartphone usage from the EU 5: UK, France, Germany, Spain and Italy. The top in-store shopping activities across the region were:

  1. Take picture of product
  2. Send picture of product to family/friends
  3. Text/call family/friends about product
  4. Scan barcode
  5. Compare prices   

This compares with our survey of US in-store shopping activities: 

  1. Search for coupons or offers
  2. Price comparisons
  3. Make and use shopping lists
  4. Seek/look at product reviews and related information
  5. Send pictures to friends/family re their opinions
  6. Search for nearby stores offering same product
  7. Ask product-related questions or post pictures on social networks
  8. Buy the product through the phone

Source: Opus Research n=1,050 US smartphone owners (9/13)

There are several US surveys regarding showrooming and what consumers do in stores with smartphones. They show slightly different things. Basically, however, the top three activities are: compare prices, get product reviews, find coupons.

We can't assume the comScore data are the final word on European in-store behavior but it's interesting to note that the top activities all involve asking for input or advice regarding what to buy. That behavior is evident among US smartphone owners but further down on the list. There may be a cultural explanation or it may be a function of the framing of survey questions. 

There are roughly 150 million smartphones in the US and between 140 and 150 million in Europe. Penetration rates are comparable. In Europe the leading handsets are Android based, whereas the iPhone is the top smartphone in the US. 

Study: 47% of Mobile Autos Lookups Lead to Purchase

Recently xAd and Telmetrics released more data from their UK "Mobile Path to Purchase" study conducted by Nielsen. This time the focus was on consumer behavior in the automotive vertical (car purchases and servicing). The big takeaway, once again, is how mobile devices now play a critical role in the pre-purchase research process.

The UK study is something of a mirror of the earlier US version, with some differences.

Perhaps the most important finding, the UK study discovered that 30% of UK automotive researchers used mobile devices exclusively. Tablet owners were more likely to be at home when conducting research vs. smartphone users (82% vs. 41%). In addition to price comparisons (popular with with both smartphone and tablet owners), smartphone owners are more often seeking location and contact information for dealers and service locations whereas tablet owners were doing more review checking.

In order of popularity and volume here's what UK auto mobile users are looking for or researching:

  • New or used car purchases (72%)
  • Car servicing (28%)
  • Car parts (19%)

The following are some additional data and details from this slice of the UK study: 

  • UK mobile auto searchers are more price sensitive than US automotive buyers -- 53% of UK auto searchers conduct price comparisons vs. 43% in the US
  • 47% of smartphone lookups ultimately lead to a purchase; 41% of tablet searches 
  • The mobile web has greater reach with UK auto searchers; however "nearly half of smartphone searchers and 29% of tablet searchers have used an auto app"
  • 60% of UK automotive searchers plan to purchase within a month or longer. However 32% plan to purchase within a 24 hour period (the latter is probably service or parts related)

Location was a critical factor for mobile users: 40% sought or expected business locations within 5 miles. Finally only 30% of these automotive researchers knew specifically what they were looking for. Thus there's a significant opportunity for marketers to influence these consumers' purchases though mobile marketing and advertising.

What Is Indoor Location Really Worth?

There are a number of analyst firms in the market that seem to exist to generate forecasts, many (or most) of which turn out to be inaccurate. In that context I'm quite skeptical about ABI's latest forecast regarding indoor location. The firm says the market is going to be worth $4 billion by 2018.

While it's almost certain that over time indoor location will be worth billions, it's too early to say with any precision or accuracy how much the indoor location market will be worth. Ironically ABI's numbers are probably too small (the firm is usually the source of inflated forecasts). As the market evolves there will be a number of revenue streams and indoor location will touch a wide array of of consumer purchases. 

First, there's licensing revenue generated by retailers and venue owners to indoor location vendors. There's also IT-related spending for "infrastructure upgrades" to support indoor location. That includes WiFi, bluetooth low energy and a range other approaches. There's no technology standard and unlikely to be one for some time. These numbers are quite small right now, unless we consider historical spending on WiFi as part of all this. 

Then there are a range of in-store marketing angles: in-store couponing, mobile advertising, apps, digital kiosks that interact with smartphones and so on. Though inevitable indoor marketing is generally speculative at the moment. Over time it will be worth several billion dollars. Currently brands spend billions to secure favorable positioning in stores and market to consumers at or near the point of sale. Some of that will inevitably shift to digital, indoor marketing. The question is how much?

Then there's the value of digital influence over offline purchases. A majority of US smartphone owners (and increasingly European smartphone owners) use their devices in stores to help make purchase decisions. There's a direct impact on purchases (deciding to buy or not buy) from this indoor smartphone research or "showrooming." 

I've estimated in the past that the Internet's influence over offline shopping is approaching $2 trillion. Using this type of lens, smartphone "showrooming" is impacting (positively and negatively) offline buying probably to the tune of billions already. Should this be part of an indoor location forecast? Not necessarily but it should be included in the discussion to show how much is at stake for retailers and others in the ecosystem. 

ABI is directionally correct that the market is worth billions -- it's already there if you consider smartphone influence over offline transactions -- but precisely how much and where the money will come from is still to speculative to predict reliably. 

Offering PayPal Provides Modest Conversion Lift to E-Commerce

Digital marketing platform Monetate recently tested whether a site offering the option to buy through PayPal saw any conversion lift vs. not offering PayPal. Using A/B testing and data from a single client the company said there was a modest roughly 1% sales lift by offering PayPal: 

Adding this simple reassurance to product detail pages not only lifted average order value by 1.03%, but it also reduced cart abandonment by 1.21%. Not a huge lift, but not shabby either . . .

We recently asked 1,250 US adults which entities they trusted most to handle mobile payments. The following was the order of results:

  1. My credit card company
  2. PayPal (eBay)
  3. Amazon
  4. Google
  5. Apple
  6. Other (included "my bank") 

Square and Facebook were not on the list of choices. However Facebook is testing its own mobile payments service with some consumers and retailers (stored credit card and details).  

As the survey data above indicate PayPal is in a very strong position to become the dominant mobile payments company (especially after its Braintree acquisition) if it can establish and reinforce its brand and user experience as being the simplest and most secure. 

Apple could quickly enter the mobile payments arena; however so far it has held back. And while Amazon has a presence in mobile payments it's not particularly strong or developed.

Google, for its part, has failed to establish Wallet among consumers. Square is in a decent position but it doesn't have the reach that PayPal currently has. Facebook has massive reach but is not going to be trusted with payments by most consumers without a Herculean education and marketing effort. 

So currently it's PayPal's market to lose really, as mobile payments take hold.  

Report: 103 Million People in US Have Tablets or eReaders

One still gets the sense that there are marketers who treat the rise of mobile devices as something of a novelty. The idea that mobile devices have supplanted PCs in many use cases hasn't quite sunk in for many.

There are nearly 150 million smartphones in the US today, with many of them being used as primary internet devices. Now, according to Pew Research Center data released this morning, there are nearly 103 million people in the US (over 16) who who tablets or e-readers. Eventually tablets will replace e-readers for most. 

A survey of more than 6,000 people in the US (over 16) conducted between July and September found that 35% of Americans own tablets and 24% own e-book readers. Combined, a total of 43% of Americans own one or the other or both. After Q4 the tablet number will be at or above 40%. 

Tablets and ereaders

Source: Pew Research Center 

Here's the breakdown in terms of real population numbers by category -- if the Pew data are reliable: 

  • Tablet owners: 84 million
  • E-Reader owners: 57.6 million

Apple is scheduled to announce new iPad models next Tuesday at an event in San Francisco. While Android tablet shipments (and presumably sales) have been growing the great majority of tablet traffic in North American is still from the iPad.  

Ad network Chitika reported in late June that the iPad was responsible for 84% of all tablet traffic in North America. The company is currently updating its numbers and will release new data next week. 

However this is what the tablet landscape looks like (until further notice) in terms of actual tablet-based traffic to websites:  

June iPad traffic

Source: Chitika 

Report: 33% of Google's Paid-Search CTRs Now Coming from Mobile

Paid search marketing firm The Search Agency released its Q3 "State of Paid Search Report" for the US market. The report is based on a large volume of client data and discusses paid search trends by search engine and several industry segments. The headline is that a third of Google's paid search clicks in the US are now coming from smartphones and tablets. 

The following are some of top-level data released in the report:

  • Google average CPC was up across all 3 device types, with the largest growth occurring in tablets, which grew 14.2% YoY.
  • Google’s distribution of clicks continued to shift away from desktops toward smartphones and tablets, which now make up more than 1/3 of the search engine’s clicks in Q3.
  • While clicks on desktops were flat YoY, search clicks on tablets increased 63.4% and clicks on smartphones more than doubled.

The following charts show the percentage of paid-search clicks by device category.

In the aggregate, Google saw 33% of paid clicks in Q3 coming from smartphones and tablets, with the greatest growth coming from tablets. Bing saw about 18% from mobile devices, since it has a much smaller and less visible mobile presence.