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Harvest Amsterdam - Mobile strategy


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Harvest Amsterdam - Mobile strategy

  1. 1. Mobile Seizing the mobile opportunityAmsterdam 2011-2012
  2. 2. Harvest is a unique consulting firm with a clear framework andfocus: We help companies make money on the webHarvest online business development framework: three ingredients form the basis of our work Strategy and 1 Make it happen 2 Consumer 3 monetization insights  Thorough analysis and conceptual  Powerful in execution  Consumer centric thinking in value thinking proposition  In-depth specialists in online  Vision development and business  Creative, yet pragmatic solutions modeling  One stop shop including technical based on consumer insights implementation  Overall picture of online in its multi-  Strong commercial gut feel on what channel environment consumers want 2
  3. 3. Harvest expertise is captured in pragmatic packages that optimizeyour existing business…Optimizing existing Advertising Product Definition Harvest Academybusiness:seven pragmatic packages How to optimize your advertising Leveraging product for business Turn your employee into rock stars pixel success  Training by consultants on online  Combine short term revenue  Ensure your business goals are topics: mobile, advertising, increase with a solid long term realized by your product strategy, commerce, etc. plan  Create or improve your product  Cross-learning with other  Get most out of your premium with our immediately actionable companies or tailored for you pixels implementation plan and  Unique training methodology,  Set-up your remnant inventory interaction designs experienced trainers and analytical, lean and mean inspiring atmosphere 1 2 3Monetization quick scan AdSense optimisation Harvest Share & $ave button Business performance dashboardFrom good to great Take your revenues to the Acceleration word-of-mouth Insights from vast data sets Identify optimisation next level  An average Facebook Wall Post  Automate data harvesting from opportunities  To optimize your AdSense, leads to 3.2 new visitors multiple sources Practical projects with testing and tweaking is essential  Low involvement categories  Automate visualisation of the detailed execution directions  Harvest helps to start and need an extra push to share business KPIs Top line growth of current optimize Adsense  Harvest Share & $ave button is  Professionalise overview needed revenue streams  We have a double digit growth an off-the-shelf solution to to optimise international track record reward visitors to share their purchase 4 5 6 7 3
  4. 4. …or help you kick-start a new business opportunityNew businesses: Mobile New business development Social commerceseven pragmatic packages Seizing the mobile opportunity Entering new markets with new Where marketing & commerce  Mobile is rapidly growing, both on concept become one phones as tablets  Most online companies already  Enormous traffic and time spent on  Companies are struggling to have strong cards in several social media provides an opportunity combine successful consumer markets for social commerce activation with solid business  New opportunities in other online  Social commerce is not just opening a models for mobile markets can be found by smart shop on Facebook, it is about driving  Harvest helps to deliver an analysis and creative thinking sales through sharing actionable mobile strategy, with a  Harvest makes a business plan for  Harvest can create a product/service solid business case, ready to be a new concept to develop an social commerce strategy, implemented online footprint in a including a live f-store & 1 new market 2 traction plan 3Market entry strategy M&A support I M&A support II Setting up a direct to consumer (D2C)How to enter the Dutch and Unique opportunity to acquire real Ramp up your start-up How brands can expand their role in theEuropean market gems  Harvest understands the world of value chain High level market scan  General mismatch in culture and start-ups as well as professional  Setting up an online D2C is a way for Map market entry strategy into approach between start-ups and consulting brands to expand their role in the action plan corporates  Harvest professionalizes your value chain Execution action plan and  Harvest is able to bridge the gap newly acquired business for the  However, online and retail are not in document learnings and to select the best targets long term… the DNA of traditional manufacturers  Harvest provides ready-to-  … and helps to execute low  Harvest can help brands to execute investment opportunities hanging fruit to ignite set-up an online D2C channel including investment growth immediately for a manufacturer proposals 4 5 6 7 4
  5. 5. Mobile
  6. 6. Mobile is on track to eclipse desktop Number of global users [mln] Facts  Mobile will beat 2,000 desktop usage in 2013 1,800  In 2014 there is 90% 1,600 penetration of mobile 1,400 internet access 1,200 1,000  Ex-Google CEO Eric Schmidt: current 800 adoption of mobile web 600 is 8x times faster than 400 PC adoption in early days 200 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 Desktop MobileSource: Morgan Stanley (2011), Gartner Research (2011), Eric Schmidt (2011) 6
  7. 7. Most phones sold already have mobile internet access Sales of phones in The Netherlands [2002-2013, in 1000s of units] Facts  End of 2010: 3.3 million 7000 smartphone users in The Netherlands. 6000 400 500 400 1000  In 2011 smartphone 5000 200 1600 sales will be higher than 0 3050 GSM sales. 4000 4079 0 5147 3000  Conservative estimation 0 5400 5500 shows that ‘dumb’ 4800 5000 5000 2000 4200 4200 candybar phones will 3700 2880 hardly be sold in 2013. 2600 1000 1970 1022 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 GSM Smartphone EstimationSource: GfK (2010, 2011); Harvest forecast analysis 7
  8. 8. Mobile usage among consumers growing really quickly, at theexpense of other media Average time spent per day with major media [2009-2010 YoY, %] Facts  Time spent per day with 28% mobile increased with 28% YoY.  Internet: 155 minutes per day; mobile: 50 minutes.  Consumption of mobile media (video, music) 6% increased with 600% in the last year. -1% -2% Radio TV and video Internet MobileSource: Emarketer (December 2010); Video and music requests through mobile phones, Limelight Networks (May 2011) 8
  9. 9. M-commerce is growing faster than e-commerce andin a steady tempo… Consumer spending through mobile commerce [USA, billions] Facts  Top products purchased by US mobile buyers (excl. ringtones, apps, music, video, clips): consumer  Forrester estimates electronics (57%), books (42%), clothing (34%), computer hardware (31%), jewelry (16%) mobile spending in 2012 at $10 billion $25 (USA). $19  48% of US consumers are already using their $14 mobile devices to research and browse $10 products and services. $6 $3  PayPal expects the number of m-commerce transactions to grow by 2010 2011 2012 2013 2014 2015 a factor of 10 in 2 years (worldwide). % of eCommerce 1% 2% 3% 4% 5% 6%Source: Forrester Research (2011); Oracle ATG (April 2011); PayPal (2011) 9
  10. 10. …but consumers only slowly adopt (for three clear reasons) User experience on websites not adapted to characteristics of mobile devices and needs of Conclusion consumers  Limited special mobile features (shopping list, QR code usage, etc.)  A better user experience will increase  A mobile template is not a mobile site! m-commerce adoption. No safe and easy payment standard for mobile  Mobile version of Ideal  Currence will launch mobile version of most popular paying method Ideal beginning 2012 will boost commerce  Rabobank will start experimenting sooner with own mobile payment method through mobile. Low awareness among consumers  New apps with added  No specific commerce-related apps value will raise awareness among consumers.Source: Currence (2011) 10
  11. 11. Smartphone and tablet require tailored app or site, as these deviceshave specific usage patterns Smartphone Tablet [6.6% of all browsing traffic] [2.2% of all browsing traffic] Typical user 2010  Very diverse  Male (89%), 25-54 (76%), HBO/WO (73%) Typical user 2011  Very diverse  Male (81%), 25-54 (71%), HBO/WO (67%) Timing:  Mainly in the morning (7.00 – 9.00)  Especially in the evening (18.00 – 22.00) moment of day used  Small peak during lunchtime (12.00-13.00) and end of workday (17.00-18.00) Sessions per day  Multiple times a day, short sessions of a few minutes  Multiple times a day, approx. 1 hour total Usage  Used in ‘downtime’  Used very intense  Used mostly alone  Often shared with other users (kids, friends)  Used especially when no iPad of computer is present  Used at different places: couch, toilet, in bed  More used on the road than home (=3G)  More used at home than on the road (=WiFi) Apps installed  15  25 Users using media apps  55%  70%Source: Sanoma Digital, data (October 2010, June 2011); Trends in Digitaal lezen, IntoMart GfK (2011); expert interviews; Netmarketshare (July 2011) 11
  12. 12. Different types of apps can be made for mobile devices Conclusion User experience  Depending on specific wishes, companies should choose either a Native apps mobile site, native app  Programmed for one or hybrid app. Mobile sites (web apps) platform  Cross-platform  Use all special  HTML5 offers compatible Hybrid apps phone features such opportunities to  Not all phone  Native app with embedded as GPS, address features supported HTML; therefore cross-platform develop low-cost apps: book, phone camera  Hosted on compatible works on all platforms  Distributed through server, distributed  Access all special phone app and is easy to develop through the web features such as GPS, address store/market, downl and debug. book, phone camera oaded and installed  Distributed through app store/market, downloaded and installed Cost and time-to-marketSource: Harvest analyses 12
  13. 13. Most companies do not have a clear mobile presence at all;frontrunners are now taking competitive leap Three laggards and explorers Frontrunners Conclusion  Hunkemoller does not have mobile  +200% mobile turnover July  Most large companies presence 2010- Feb 2011 still lagging in mobile developments.  HEMA only has a photo app  in 2010, 3% total turnover mobile and 6% in 2011  An exception are the  MediaMarkt has very simple site without real additional value  5% of total turnover in frontrunners who 2010 already start to gain a competitive advantage  Appie: basket size & traffic to AH stores in mobile.  PayPal: 41% of large Dutch webshops offers a form of m-commerce end 2011.Source:,,, Gartner, PayPal (2011) 13
  14. 14. is a frontrunner in mobile sales of grocery Currently: sells more Expectation: mobile sales will triple in than 3% through mobile 2012  is growing rapidly;  CEO expects 6% total turnover was already >€6 sales through mobile end of 2011 million in 2009  A new mobile site will boost sales  3% of all orders is placed through mobile device (June 2011)  Sales is expected to be 3x higher in 2012 than in 2011  No iPhone/Android/other apps  Mobile site with UE almost comparable to mobile site  Most typical ‘offline’ grocery stores as Kruidvat and Etos do not yet offer apps; DIO Drogist has a simple app for drug informationSource: blog 14
  15. 15. Projected mobile revenues from (in-)app sales and mobileadvertising expected to increase Global app store revenue and mobile ad market revenue [$, billions] Facts  Global revenues for sales of apps and within apps are expected to triple within 3 years. $19  Total app store downloads will reach 17.7 billion in 2011. $11 $6  Mobile ad market H1 $39 2011 NL was €1.2 $3 $27 million, is starting to $20 ramp up, and will grow $1 $13 $5 in a faster pulse. 2010 2011 2012 2013 2014 In-app revenues Ad revenuesSource: Gartner (January 2011); NB: IDC (December 2010) made different estimation; IAB, Ad Spend Report H1 2011 15
  16. 16. Still, the business models are currently not multi-million dollaropportunities for three reasons  Relatively low mobile reach Future expectation - About ±5% of total traffic comes through mobile devices  Mobile usage is increasing; will make  Consumer not willing to pay for services business models more - Exception 1: services that are really premium attractive. - Exception 2: services where users are used to paying for non-mobile alternative (e.g. newspapers)  Consumers learn to pay for mobile services (e.g.  The app store and ad revenues are not cash cows (yet) Spotify, data packages) - App store revenue is limited: average price €0.79 - €1.99 per app minus VAT and revshare app store  Parties as Google have - Low revenue of mobile ads: €0.10 eCPM networks, €3-€5 eCPM direct, but low sell- entered mobile ad trough triggered by smaller screen (less placements) market; eCPMs of - Ad market still small: currently 0.5%-1.0% of total ad market mobile ads are expected to grow.Source: Harvest research 16
  17. 17. So what business model does work? Eight business models formobile with their pros and cons 100% free Advertisement Ads + premium features Driving indirect sales Free app with free content Free app with advertisement Free lite access with ads; then pay Increasing basket size or traction by not pay directly Consumer does for premium features leading consumers to other channels  Large potential reach and usage  Some revenue; enriches sales  Revenue from ads and  Increases customer − No revenues proposition subscriptions satisfaction, loyalty, indirect sales − Sales force needed; too many ads − Paid subscription puts a brake on and allows PoP marketing will harm user experience usage − Direct results sometimes hard to (=less page views) measure Paid app Paid app with ads Paid subscription Direct mobile sales Pay fee in app store to get access to Pay fee in app store to get access to Pay in-app subscription fee for full Select, pay and service through the application, all content is free the application, plus ads around access; app includes 1 time usage mobile channel pays directly Consumers content  Direct money  Direct money  Revenue from pay per usage  Direct revenue increase − Fee puts a brake on adoption of − Fee puts a brake on adoption of − Paid subscription puts a brake on app (and thus reach) app (and thus reach); bad user usage (=less page views) experience; not a logical choice Free Ads around Pay for Pay for content model content model premium content model transaction or productSource: Harvest research; Intentionally left out: 2nd screen monetization and adding mobile experience to offline (retail) channels 17
  18. 18. Most important take-out in current market: mobile is not a directdriver for revenues (yet) Analysis shows: mobile apps business models Mobile apps currently a hygiene factor, driving indirect currently not interesting sales  Business models for a media company where compared; Two possibilities: none of them was highly profitable yet  Mobile as a hygiene factor: dissatisfier when not having an app (e.g.  Smartphone penetration is expected to reach 60% in 2012; a possible tipping point for business models  Mobile as a competitive advantage: driving indirect sales (e.g. Appie) or improving proposition (e.g. ABN Amro internet banking)Source: Harvest analyses 18
  19. 19. Albert Heijn and developed apps to increase customerloyalty and drive sales indirectly Appie: large investments, leading to more loyal customers mobile app can be seen as dissatisfier  Millions euros investment in continuous product  5% of bookings now through mobile platforms and development increasing; major part of mobile sales would be otherwise bought through web platform  Customers are extremely positive about Appie (4**** in App Store and 4,5**** in Android Market)  Finally, mobile presence can be come a ‘dissatisfier’. When a retailer does not offer mobile, some customer  In a very competitive environment, Albert Heijn as segments will buy somewhere else. market leader succeeded to gain growth in market shareSource: Harvest analyses, Distrifood (2011), (2011) 19
  20. 20. The future of mobile: Tesco introduced a shopping concept based onQR codes Tesco’s Home Plus  Tesco in South Korea created the Home plus virtual store that allows customers to shop at their leisure  The user purchases the groceries by scanning QR codes with a smart phone and they are delivered for when they arrive home  Online turnover increased by 110%; Home plus now number #1 in online grocery sales in South-KoreaSource:; RetailDetail 20
  21. 21. The mobile landscape is quickly changing, growing to a more maturemarket Today € ! t From: Experimental phase To: Mature phase Consumer  Online at one place (home/office)…  … and now online any time, everywhere Market  Low reach (5-8% of total online)…  … but growing fast Technology  Low-tech and inside-out driven  … but now high-tech and driven by consumer development… needs Business  … to professionalizing and growing advertising  Business models in baby shoes… and app market 21
  22. 22. Harvest brings together consumer perspective and businessperspective in a pragmatic mobile action strategy Business perspective Consumer perspective Find the right Sweetspot business models Offer the best and monetize experience for step-wise consumers  Companies see chances;  Consumers willing to experiment harvesting increasingly using and learn m-commerce as it as fast, easy, and 24/7  Challenge is to transform opportunities to  Experience is concrete plans and currently under par business model Mobile action strategy  Trust is too low 22
  23. 23. Harvest takes into account internal strengths, and opportunities inthe market to create an actionable mobile strategyInternal 1 External analysis 2 Action plan 3strengths mappingActions Actions Actions Strengths and capability overview  Consumer behaviour: mobile  Choice of most suitable business usage and needs per target group model Evaluation of current traffic and traffic flows  Inspiration: (inter)national best  Business case practices and examples  Strategic choices and building  Competitive analysis: mobile blocks for product activities of competitors  Sketches of product based on  Trends: relevant trends translated building blocks to insights & actions  Action plan with timeline  Technique: choice for native/hybrid/web app 23
  24. 24. Harvest cooperates with clients to create an actionable strategy usinginterviews, analyses and desk researchInternal strengths mapping: External analysis: expert interviews Action planinterviews and data analysis and desk research Interviews with stakeholders and  Interviews with experts on mobile  Define possible mobile business management app development & mobile trends models Analysis of current (mobile) traffic  Analysis of mobile market, trends  Calculate business case to site and app and technical developments  Create planning for app Evaluation of current initiatives  Analysis of mobile consumer development behaviour  Sketch preview of mobile app  Review of competitors and best practices 24
  25. 25. We take it all the way: sketches based on the concept are input for thethird party that will actually build the platform 25
  26. 26. Harvest serves an international portfolio of pure online playersand click-and-brick companies "Harvest is without any doubt one of the very best e-consultancy companies in the world. Excellent knowledge and expertise strategically, tactically, and operationally, always with clear focus on top line results” Francine van Dierendonck, Sr. Director and Head Global Philips Flagship Store "The monetization quick scan that Harvest carried out for Compare Group highlighted tactical improvements with direct upside and a strategic opportunity. The Harvest team is very professional and has great knowledge of e-retail and online in general.” Ben Kerkhof, CEO Compare Group "Harvest supported Experteer in their go-to-market in the Netherlands. The professionalism, drive and in-depth knowledge of the Dutch online were key to the success of the project and the launch of” Nina Zimmerman, Head of Europe Experteer "Harvest combines a strategic view on creating online success with the power to execute. Passion for the online business, dedicated to deliver results. And above all, a pleasure to work with.” Marc de Vries, CEO Hyves 26
  27. 27. Feel free to reach out to us for more information Harvest – Online Business Development
 Herengracht 262-266
 The Netherlands E:
 T: +31 (0) 20 4277796
 I: 27