This whitepaper understates the importance of incorporating mobile commerce in your multi channel strategy. The authors of this whitepaper are Luis E Rodriguez and Michael Au respectively who are IBM experts.
Incorporating Mobile Commerce in your Multi-Channel strategy
IBM SoftwareWhite PaperIncorporating MobileCommerce in YourMulti-Channel StrategyBy: Luis E Rodriguez and Michael Au
2 Incorporating Mobile Commerce into Your Multi-Channel Strategy Market Drivers Independent reports from the ITU World Telecommunication,“By 2014, more than three billion of the the United Nations and eMarketer show that there are moreworld’s adult population will be able to than 4.6 billion mobile subscribers worldwide (ITU Worldtransact electronically via mobile and Internet Telecommunication). This means more than half the world population has a mobile phone today; and close to a billion oftechnology” these mobile users are accessing the Internet with their smart– Gartner, Gartner’s Top Predictions for IT phones. This represents a 191% growth rate from 2006, with aOrganizations and Users, 2010 and Beyond: Cumulative Average Growth Rate of 24% from 2006 throughA New Balance, December 2009 2011 (IBM Institute for Business Value. 2009). In the USA, the mobile market penetration is higher thanIntroduction 90%; where the average USA household has 1.7 mobile phonesThe number of mobile web sites, mobile applications and per person and this number is higher if there are GenY users atmobile applications stores are growing at a staggering pace. By home. Penetration will near 100% by 2013, assuming a modestthe end of 2010, consumers will have downloaded almost 6 2.7% annual growth rate in the number of mobile usersbillion mobile apps; up from 2.4 billion in 2009 (Mobile through 2013 (“USA Mobile Phone Subscribers andApplications Market Data, ABI Research, April 2010). This Penetration, 2008-2013”, eMarketer, May 2009). Mobile israpid adoption of mobile applications is being fueled by the quickly becoming a ubiquitous platform for messaging, music,increasing selection, brands, capabilities and storage capacity of video, social networking, web access and cross-channelsmart phones, which had a 20% sales growth in 2009. shopping.Consumers are upgrading their ordinary phones to Internet- Worldwide Mobile Internet Users.enabled smart phones to make use of the new capabilitiesoffered by mobile applications. Retailers are trying to meet 1200 011 E to 2customer demands for information and services, and seek 2006 982.4 om 1000 th fropportunities to generate additional sales across all the g row 191% 800 757.1channels; at the same time, they need to also understand the 596.4value and cost among mobile commerce implementation 600 489.6options, and determine how to best link new mobile initiatives 405.5 400 337.3to their overall customer strategy to avoid disjointed mobileefforts. 200 0This white paper discusses the market opportunity in mobile 2006 2007E 2008E 2009E 2010E 2011Ecommerce, the emerging mobile shopping scenarios, differentmobile implementation options to provide a smarter shopping CAGR 2006-2011E: 24%experience across channels and an overview of mobile Source: IBM Institute for Business Value, 2009commerce capabilities in IBM® WebSphere® CommerceVersion 7. The adoption and usage of the mobile Internet has reached a critical mass with the advent of the Apple® iPhone, Research In Motion® Blackberry, and smart phones running on Google® Android, Microsoft® Windows Mobile, or other mobile
IBM Software 3operating systems. These devices are now delivering a phone, such as the Motorola® Razr; or is it a voice-onlycompelling and user friendly mobile Internet experience. phone, such as the TracFone®?According to the Pew Research Center, every day more than57 million Americans are accessing the web with their mobile Since consumers replace their mobile phone on average everyhandsets, and it will grow to 134 million by 2013. This “Mobile 1.5 to 2 years; retailers need to continually monitor the marketMomentum” has been possible thanks to ubiquitous wireless share of mobile platforms in different geographies in order tobroadband coverage, affordable mobile data plans and adjust their mobile implementation plan over time. Manyhundreds of brands embracing the mobile channel. analysts expect consumers will replace their existing phones to newer and feature-richer 3G devices, in the next couple years.In today’s digital, always connected and on-the-go age, An independent research report predicts that by 2014, overconsumers want to shop whenever and wherever they choose, 80% of the mobile phones being manufactured will be 3Gand they expect to experience a consistent, relevant and timely smart phones, 18% will be feature-phones, and only 1% will beinteraction with their brand of choice, regardless of the voice-only phones (“US Mobile Forecasts, 2009 To 2014,”channel they use. While social and mobile commerce channels Forrester Research, Inc., November 6, 2009). In fact, manyhave been gaining momentum in the past few years, they are studies have shown that users are now using their mobilenot usually well integrated to provide a seamless shopping devices to send/receive text messages in their socialexperience to consumers. Hence, retailers face the challenge to communities, and are accessing the Internet to findoptimize their cross channel processes and deliver a single information much more frequently than talking on theirbrand experience to their customers. mobile phones.Understanding Mobile Users US Mobile Phones By Technology Source: Forrester. US Mobile Forecast, 2009 to 2014. Nov 6, 2009Before selecting mobile platforms for deployment, retailersneed to better understand how consumers are using their 2014 3G 2.5Gmobile phones; as well as the handsets and its capabilities. 2GFinding the answers to the following questions will help 2013 2.5G 3Gformulate your mobile commerce strategy: 2G 2012 3G 2.5G 2G• Do our most valuable consumers use mobile for voice, data, or 3G 2011 web browsing? 2G 2.5G• What percentage of consumers use each of the above? 3G 2010• How frequently do they use text messaging (SMS)? 2G 2.5G• Do they prefer to read their email in their mobile while 3G 2009 on-the-go, or in their desktop at home? 2.5G 2G• How often do they use the mobile web, and what activities do 3G 2008 they do while browsing? 2.5G 2G• Do they visit social networks, such as Facebook or MySpace, 10% 20% 30% 40% 50% 60% 70% 80% from their mobile phone?• What type of built-in mobile features do they use: GPS, 2008 2009 2010 2011 2012 2013 2014 Wi-Fi, built-in camera? 3G 32% 46% 57% 65% 71% 77% 81%• What type of handset they own? Is it a smart-phone, such as 2.5G 65% 52% 42% 34% 28% 23% 18% the Apple iPhone, or the Blackberry® Curve; or is it a feature- 2G 3% 2% 1% 1% 1% 1% 1%
4 Incorporating Mobile Commerce into Your Multi-Channel StrategyDuring last year’s holiday season, more than half of mobile channels, thereby increasing sales opportunities and customerusers around the world used their mobile phone as part of their loyalty. Scenarios supported by emerging mobile technologiesshopping activities. Furthermore, GenY users were ahead of may include (“Mobile in Retail. Getting your retailany other segment in their mobile use for shopping activities. environment ready for mobile,” GS1 MobileCom, 2010):They accessed mobile coupons 6.5 times more than BabyBoomers; and were 3 times more likely to have made a mobile • Location-Based Services – Leverage GPS, Wi-Fi, Bluetooth,purchase. RFID, or other technologies to detect the shopper’s location, with his/her permission, to find the nearest store, receiveMost Common Mobile Shopping Activities promotion information or coupons (via notification services)and Emerging Mobile Technologies when passing by the store. These Geo-Web capabilities canThe mobile channel provides a new venue for consumers to not only be defined around stores, but they can also be definedmake their shopping experience more engaging and easier, and inside a store to promote products within the store.it provides retailers an opportunity to increase sales, customer • Self-Scanning - Uses the camera in the phone to scansatisfaction and loyalty. Today, the most common multi- barcodes in 1D (UPC) or 2D (QR, Datamatrix, or other)channel mobile shopping activities include (“Mobile Shopping formats on the store shelf, in-store signage, or printed catalogTakes Hold Worldwide,” eMarketer, January 20, 2010): to connect directly to the retailer’s web site for product information, promotions, or marketing campaigns.• Call to ask someone about a product I may purchase • Notification – Consumers receive order status, product• Text someone to get advice before purchasing a product availability, marketing and promotion information via SMS,• Send a picture of a product I may purchase MMS, or direct mobile messaging such as the iPhone or• Access the mobile web to read product reviews or other Blackberry push notification services. product information • Digital Wallet – Consumers can manage the following digital• Access the Internet from mobile phone to compare prices content on their mobile phones:• Use mobile phone to access the Internet to get coupons and –– Shopping Lists – Add items by browsing the mobile special offers while shopping website or by scanning 1D or 2D barcodes on the• Check status of an order product label, and possibly share the list with others –– Gift Lists – View and update a gift registry on theShoppers engaging most often in mobile shopping are in mobile phone while shopping in the store or onlineAsia-Pacific, particularly in Japan and South Korea, where 8 –– Coupons – Organize coupons by issuers and expirationout of 10 shoppers have used their mobile phones for at least dates; and redeem them in the store or onlineone of the above activities and are the most avid users of –– Flyers – Receive and manage weekly flyers in the digitalcoupons, barcode scanning and mobile payment; while walletincreasing numbers of shoppers in Europe and America are • Mobile Payment – Pay by direct mobile billing, contactlessusing their mobile phones for social activities, product Near Field Communications, pre-filled credit card or otherresearch, and online and in-store purchases. payment information stored in the user profile.As consumers adopt the emerging mobile technologies for Once retailers decide to embrace the mobile channel, they facecross-channel shopping, retailers can capture the market the challenging decision to select the mobile platforms theyopportunity by providing mobile commerce applications to will support. Should it be the Apple iPhone, or the RIMpromote their brands and products to consumers across all Blackberry, or an Android-based smart phone like the
IBM Software 5T-Mobile® myTouch, Motorola® Backflip or Droid, or the Market Share of Top Smart Phone PlatformsHTC® Hero. 5.4%Although the iPhone is very successful in the USA, “it still 9.0% RIMcurrently represents less than 5% of the European mobile 42.1% Apple 15.1%population” (“Mobile Strategy: Frequently Asked Questions,” MicroSoftForrester Research, Inc., October, 2009) and the Blackberry Googlemarket share in the USA has remained unchanged in spite of Palmthe impressive 23% growth rate the iPhone had in 2009. In the 25.4%USA, at the end of 2009, the Blackberry had almost doublemarket share than iPhone; 42.1% vs. 25.4%, respectively(ComScore MobiLens. February 2010). Source: comScore MobiLens, Feb. 2010.However, the number of ad requests coming from Apple mobile consumers retailers will be able to reach will depend ondevices (iPhone, iTouch, and now iPad) are almost 6 times the mobile platform selected; so choosing the right mobilewhat they are from Blackberry devices (“Mobile Internet: platforms is critical.Where is Your Audience,” Forrester Research, Inc., May 6,2009) and this is in spite of Blackberry having more thandouble as many handsets in the market. The type and breath of Characteristics Mobile Web Mobile Hybrid Mobile Native Mobile Transcoder Application Application Application ServicesDistribution Model Internet, App store download App store download Internet, Mobile browser Mobile browserProgramming model & skills Web Web + Native Native N/AApplication Portability High Medium None N/AMaintenance Low Medium High LowAbility to Leverage Device features:• Geo-location HTML5 HTML5, API mapping Native API No• Offline storage HTML5 HTML5, API mapping Native API No• Address Book No API mapping Native API No• Camera No API mapping Native API No• Calendar No API mapping Native API No• Accelerometer No API mapping Native API NoUI layout & Navigation Common, or device unique Device unique via CSS Native to mobile device Common across all mobile via device recognition control + Native UI shell devicesApplication Review by third party No Depends on provider Depends on provider NovendorApplication awareness Internet search, Advertising App Store search, Advertising App Store search, Advertising Internet searchApplication icon No. Access via bookmark Yes, after download Yes, after download No. Access via bookmarkApplication update Transparent to users Download by users Download by users Transparent to users (less frequent than Native applications)
IBM Software 7from not having to access Internet resources frequently. capabilities; these are commonly called feature phones. ThisHowever, mobile commerce should be supported by mobile solution is typically employed by the retailers as a tacticalweb or hybrid applications as the majority of the application quick-to-market implementation.content, such as product information and order status, arerelatively dynamic and should be delivered as web content Because the regular web content is not written specifically forrendered by the eCommerce server. mobile phones, it might not display properly on the mobile phones. Hence, the third party managed services help solve theThe following diagram illustrates a sample hybrid application problem by converting selected areas of desktop web storefor WebSphere Commerce: content to a mobile-ready format for the selected mobile devices, including feature phones with limited browser capabilities and other protocol support such as WAP orCustomizable i-mode. Some other third party managed services may simplybranding, color,theme re-direct all mobile requests to a separate system, and thereforeScrolling feature require the retailer to provide the web service interface for the Smart phoneproducts. UI shell third party managed mobile server to access the productUsers tap productimage to view catalog information and other transactional data, such as orderdetails status, from the retailer’s main website. CommonUsers tap to view business logicproducts by category & JSP templates The major limitation with this approach is that the transcoder across multiple smart phones services would not leverage the advanced capabilities and userTap bar to accesscommon functions experience offered by the latest generation of smart phones. In(Home, Store Locator,Wish List, Shopping Cart) addition, the marketing and merchandising managers would not be able to use integrated business tools to manage Smart phone UI shell marketing campaigns and sales catalog across channels, but instead rely on the third party services to manage the business rules for their mobile users which may result in disjointed“More” to accessadditional functions views of the same cross channel customers.(Search, ProductComparison, MyAccount, etc.) Another consideration is the Service Level of Agreement for the third party managed services provider. As the mobileHybrid applications take advantage of both web and native applications. It Internet traffic increases exponentially, the third party systemleverages common logic in web views, while also leveraging smart phone infrastructure system must be able to handle the mobilehardware and software capabilities browsing and transaction volume experienced by the retailers. WebSphere Commerce Mobile SolutionMobile Transcoding Services Foreseeing the growth in mobile Internet users and theAlternatively, retailers may engage third party managed importance of mobile commerce, IBM introduced anservices to extend (‘transcode’) the output of their main Web integrated mobile commerce solution as part of WebSpheresite to other display formats to cover a broader set of non Commerce Version 7. The mobile commerce solution extendssmart phones with limited browser or native device WebSphere Commerce vision of being the customer
8 Incorporating Mobile Commerce into Your Multi-Channel Strategy The mobile starter store provided in WebSphere Commerce Version 7 is a mobile web application which is optimized for common mobile HTML Web browsers with a minimum display resolution of 240 x 320 pixels, which are typically supported by the latest mobile platforms, such as smart phones from RIM, Apple, Motorola, HTC, and Nokia. The mobile web store model also leverages some of the emerging HTML5 features, such as Geo-location API to provide GPS-based store locator capability. The mobile starter store can also be used as the common base to develop WebSphere Commerce mobile hybrid applications for the popular mobile platforms, such as iPhone, Android and others. The mobile commerce solution provides a rich set of features, which include:WebSphere Commerce – Customer Interaction Platform • Sales catalog, marketing & promotion targeted to mobile users • Persistent shopping cart which follows the shopper, regardlessinteraction platform to provide a single view of customers of touch point being usedacross all channels and touch points. So shoppers can buy, • Mobile Store homepage with eMarketing Spots with ability tofulfill and service anytime and anywhere, online, in-the-store display content targeted to mobile usersor call center, and now on their mobile phones. • Side-by-side product comparison • Wish list and email to contacts in the mobile address bookThe mobile commerce solution in WebSphere Commerce • Buy on mobile / pickup in store with inventory visibilityextends the customer profile, purchase history, order across channels; available through integration to a Distributedinformation, catalog, business user tooling and Precision Order Management systemMarketing available to the web channel; thus, creating a tight • Store locator via ZIP code, city, or current GPS coordinates;relationship between mCommerce and eCommerce. This as well as map with directions from current location toallows retailers to deliver consistent product and pricing selected store location; available through a common API toinformation, as well as inventory visibility across channels. integrate with Google Maps, MapQuest, Blackberry Map, andFurthermore, marketers can target catalog content, marketing otherscampaigns, and promotions specifically to mobile consumers. • User Registration with opt-in feature for marketing and coupons via SMS or emailThe mobile solution leverages the power of WebSphere • SMS text messaging to deliver personalized marketing andCommerce mobile application framework with intelligent coupon promotions, order confirmation and status, alerts,device and browser detection and routing capability; i.e., a store events and moreshopper will enter the same web store address in his mobile • Digital Wallet and Coupons to redeem online or at the storephone as she would do in her desktop computer and it willcorrectly access and render the store in the device.
IBM Software 9 The Management Center catalog tool allows merchandisers to use a common product catalog across all customer touch points, or optionally create a sales catalog specifically for the mobile channel to promote products targeted to mobile users. The Management Center marketing tool allows marketers to create rules for the mobile store to promote products targeted to mobile shoppers on predefined screen areas, called e-Marketing Spots. The Cross-Channel Precision Marketing engine allows marketers to build and follow a dialog with a customer segment, or individual shoppers, by delivering contextual, Mobile Web Store Mobile Web Store targeted marketing messages to keep consumers loyal to the brand as they cross multiple channels. It can sense triggerMobile Catalog, Marketing and events like abandoned cart, order placement, social mediaPromotions participation, and take actions to target shoppers with offersBusiness users manage their catalog, Precision Marketing and such as mobile SMS text messages or targeted product cross-promotions for diverse touch points (including web, mobile, sells and up-sells.contact center, kiosk and POS) via a common business usertooling; namely, the IBM Management Center for WebSphereCommerce. This greatly reduces the overhead, learning curve, SMSand deployment time, while also creating a consistent brand Messageimage across multiple touch points and channels. WebSphere Commerce Marketing & Marketing Tool Promotions WebSphere Commerce Marketing Tool
IBM Software 11integration between the Mobile channel and other channels For the technical details on developing WebSphere Commercesupported by retailers; such as the Web, Contact Center, Kiosk, mobile applications, please refer to “Building mobileor Point-of-Sale. The versatility and power of the IBM mobile applications for WebSphere Commerce using the hybridcommerce solution stems from its ability to leverage the application programming model” in the IBM DeveloperWorks.customer profile, purchase history, order information, catalog,business user tooling and precision marketing available to the About the Authorsweb channel; thus, creating a tight relationship betweenmCommerce and eCommerce without having to replicatecatalogs, promotions, or marketing campaigns. This allows Luis E Rodriguez Michael Auretailers to deliver consistent brand experience with uniform Luis is a Product Manager for Michael is a developmentproduct and pricing information, as well as inventory visibility IBM WebSphere Commerce. He manager for WebSphereacross channels. Furthermore, retailers have the flexibility to is responsible for understanding Commerce at IBM Torontotarget catalog content, campaigns or promotions only to market trends and customer Laboratory. He is responsible for needs in the areas of mobile the design and development ofconsumers using the mobile channel. commerce, Precision Marketing, the foundation components, business user tooling, and including mobile and crossThe impressive growth and adoption rate experienced by emerging Latin American channel solutions, in WebSphere markets; and for translating this Commerce. Michael holds anmobile commerce will continue for the next five years. This knowledge into requirements to MBA from University of Toronto,growth is being fueled by the ubiquitous wireless broadband guide product direction. Luis has and Bachelors Degree incoverage and affordable “all you can eat” wireless data plans; as over twelve years of Product Mathematics, with a major inwell as by the success of the Apple iPhone, the Android-based Management experience. Prior Computer Science, from to joining IBM, Luis managed University of Waterloo insmart phones, and the availability of application stores being mobile handsets at Ericsson; Canada. He can be reached at:deployed by smart phone vendors, wireless carriers and and earlier in his career, he was a firstname.lastname@example.org system providers. software engineer at AT&T Bell Laboratories. Luis holds an MBA from Cornell University, anThe power of mobile commerce lies in its ability to influence MSEE from the University ofmultichannel transactions with a device that is always on and Connecticut, and a BSEE fromalways with us, and the IBM WebSphere Commerce mobile the University of the Americas in Mexico. He can be reached at:commerce solution allows retailers to develop relevant and email@example.com relationships with its customers as they seamlesslytraverse channels.Further ReadingFor more information on IBM WebSphere Commerce, pleasevisit www.ibm.com/websphere/commerce/ or contact yourIBM sales representative.For additional details on developing a cross-channel solutionwith WebSphere Commerce, please refer to the redbook:“Building Multichannel Applications with WebSphereCommerce”