Spotlight
Mobile Commerce:
“S
oftware is eating
the world” is a fa-
mous quote from
investor and soft-
ware engineer Marc Andreesen.
Given this thought, it seems to me
that mobile devices, as the focal
point of social software, appear to
be little Pac-Man characters hun-
gry for more, with mobile growth
trends continuing on hockey-
stick trajectories. By 2017, three
billion smartphones and one bil-
lion tablets are expected to be in
the hands of users worldwide.1
Many organizations are thus
trying to understand how best to
leverage the unique combination
of content, data, and functional-
ity provided by mobile devices.
This is especially true in the retail
sector, where significant mobile
commerce growth is predicted.
According to Internet Retailer, of
the 49.6 billion visits to the top
500 e-retailers in 2014, 26.4 bil-
lion (53.2 percent) will stem from
smartphones. 2 Similarly, the
percentage of online retail sales
placed via mobile devices will
grow from 11 percent in 2012 to
25 percent by 2017.3 However,
ecommerce and transaction sta-
tistics are only one part of the
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itpro-16-03-Spot.indd 61
A Broader
Perspective
Seth Earley, Earley & Associates
­ icture when it comes to leverag-
p Engaging the Customer
ing mobile commerce.
A New Perspective
Given that so many people have
smartphones these days, you
might expect the cost of a mobile
ad to be higher than that of an ad
appearing on a desktop or laptop
computer. Surprisingly, this isn’t
the case. Mobile ads are one third
the cost of desktop ads, according
to David Cost, VP of Ecommerce
for Deb Shops, a retailer catering
to 15–24 year-old women who live
on their smartphones. One rea-
son for this, according to Cost, is
that it’s difficult to track activities
from mobile devices and tie them
to subsequent behaviors. Even
though someone might begin to
research a product on his or her
smartphone, in many cases, the
person completes the purchase on
a full-size monitor or in the store.
However, mobile commerce
presents unique opportunities to
engage with consumers. Many
enterprises that deal directly with
consumers are extending their
mobile capabilities to interact in
ways that strengthen the brand
and the consumer relationship
both before and after the sale.
Customers expect certain core
functions that naturally mesh
with mobile device usage, such
as store-locator capabilities (users
often access information about a
specific store they plan to visit4).
Customers use their mobile devic-
es for a range of activities related
to purchases, including
• accessing coupons that they re-
deem at a local store,
• receiving offers that they use to
make a purchase on a laptop or
desktop PC,
• downloading apps that let them
browse their favorite retailers,
• browsing and previewing email
from retailers that prompt them
to make purchases on their
smartphone,
• using apps that make in-store
and at-home shopping more
productive, and
• checking inventory at a local
store.
For some retailers, the key isn’t
so much transactions and com-
merce-focused functionality but
rather consumer engagement—
even when consumers aren’t
shopping. Pre-purchase research
15/05/14 11:34 AM
 Spotlight
is a primary activity supported by
access to detailed product infor-
mation, online reviews, and relat-
ed content (support articles, tips
and tricks, FAQs, and discussion
forums). However, a great deal of
value is also derived from partici-
pating in social media conversa-
tions and developing relationships
with customers.
According to Cost, “everyone in
the commerce world is centered
[on] conversion, but if someone
has income to make a purchase
once per month, do you want [that
person] to just show up on the day
of the purchase?” Cost says no—
he wants that customer to come
every day, even when not making
a purchase:
The daily conversion of visits
is worse, but this is a different
way of thinking. Purchase met-
rics are not always meaningful.
If a person starts [his or her]
journey on a mobile device, but
doesn’t [make a] purchase, how
do you know what is success-
ful on mobile? We are making
the argument that it has to be
around engagement.
Cost refers to this new approach
as the “micro-conversion,” and
he explains how new technolo-
gies are helping his company cre-
ate user-generated content to help
with this process.
Leveraging User-Generated
Content
Cost explains that many of his
younger customers are on Ins-
tagram, where they constantly
share photos, so he wanted to take
a more visual approach. “We use
Olapic [www.olapic.com], which
lets us engage in a unique way.
Customers take pictures of them-
selves wearing something from
Deb Shop, submit [the photos]
to us, tag which items they are
wearing, and we make the picture
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itpro-16-03-Spot.indd 62
shopable.” This lets Deb Shops
feature user-generated photos of
their product in all kinds of dif-
ferent settings.
This engagement strategy has
paid off. “Our desktop traffic de-
clined by 8 percent between 2012
and 2013, but our mobile traf-
fic was up 60 percent and Tablet
traffic was up 130 to 140 percent,”
says Cost. “It’s about your ap-
proach and what are you present-
ing to prospects. When we started
our social media program about
two years ago, we decided we
were going to have an engagement
strategy and not worry about driv-
ing people directly to make a pur-
chase on the website.”
Instead, the goal was to cre-
ate an environment where people
came back once a day or more
through interaction with social
media content. That way, the re-
tailer would be on the custom-
ers’ minds, and the logic was that
conversions would follow, even
if those conversions couldn’t be
directly tracked. “We had 30,000
Facebook fans when we started
this process and added 1 million
the first year [and another million]
the second year. We now have 2.3
million fans.”
Retargeting Ads
Tying social media engagement
directly to sales is one challenge.
Another is tracking behaviors
from device to device and across
channels, which complicates ef-
forts to deploy resources and al-
locate funds appropriately. Mobile
devices don’t use cookies consis-
tently, so organizations are trying
new software and approaches to
monitor and track customer be-
havior and mine that behavior to
segment buyers and create cus-
tomized user experiences.
One company, Tellapart (www.
tellapart.com), uses predictive
analytics and machine learning
techniques to look for patterns
in online behaviors and integrate
with purchase histories and third-
party data feeds. The goal is to
identify high-value customers,
track them across channels and
devices, and model purchase in-
tent. The common identifier is the
user’s email address.
Advertisement “retargeting” de-
pends on the ability to track sites
that users have visited. If a site visi-
tor bounces from that site without
purchasing or registering, the ad-
vertiser can present an ad to them
when he or she visits another site
that’s part of the ad network. This
approach won’t work consistently
with mobile devices. An approach
that one vendor (Drawbridge;
www.drawbrid.ge) is using is based
on “statistical methods that rely on
anonymous data to track people
as they move between their smart-
phones, tablets, and PCs.”5 An
anonymous profile is assembled
using a variety of data sources, and
an aggregate identity of users is
tracked across devices.
Facebook, Google+, and Twitter
all have the ability to track users
across devices and offer various
advertising products that retarget
ads to mobile users. Although the
approaches vary, because users log
in across devices, those networks
can monitor user desktop activi-
ties and enable cookie-based data
to be integrated with consumer
mobile device behavior to serve
content and advertisements that
are appropriately targeted to users.
Exploiting Mobile Trends
Mobile technologies and ap-
proaches are evolving and chang-
ing rapidly, but there are several
trends that analysts have identi-
fied.6 These developments help
to make mobile devices capable
of true one-to-one marketing—an
aspirational goal that marketers
have had for decades.7 By ­targeting,
personalizing, narrow casting, and
communicating through friends
15/05/14 11:34 AM
 and colleagues, marketers will be
able to more closely provide pros-
pects with the things they need,
when they need them. Rich media
and games mean that communi-
cations are more engaging and
entertaining, customers will be
better served, and organizations
that cater to them will reduce the
cost of finding and serving cus-
tomers. Of course, users must be
willing to accept potentially intru-
sive monitoring of their activities
in exchange for a better user expe-
rience with more targeted content.
Personalization
Personalization and customization
of messages and content-based
user context is even more impor-
tant on a mobile device due to
limited screen real estate and user
attention. Mobile devices connect
with consumers on a very intimate
level, and many approaches require
explicit permission and proactive
engagement. Without high-value,
appropriate offers, that permission
and engagement won’t likely take
place. Also, some approaches, such
as mobile messaging, can be seen
as intrusive without the correct
preliminary interactions.
Geotargeting
Sending offers that relate to a
user’s location can be accom-
plished at the macro level (nearby
shops, for example) or the micro
level (noting where the customer
is standing in the store or when
a high-value customer enters the
store). At each level of granular-
ity, the user’s context can inform
messaging and personalization.
Social Network Channel
Integration
Conversations are taking place
on social media about products
and services on a continual basis.
Successful marketers are inte-
grating their messages into social
media and mining social media
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for ­
sentiment and trends. This
requires a deft touch and is less
about technology and more about
the nuances and needs of the au-
dience and channel.
Narrow Casting Content
This can take place via attributes
in Facebook or Linkedin. Rather
than broadly disseminating a
message across a wide range of
users, narrow casting is about
more carefully targeting the con-
tent and message. Mobile target-
ing platforms build this capability
through data monitoring, collec-
tion, and integration techniques,
but they might begin to encroach
on privacy issues.
Rich Media Messaging
Rich media messaging (RMM) is
another mechanism for ­interacting
Users must be willing to accept potentially
intrusive monitoring of their activities in exchange
for a better user experience with more targeted
content.
with users on their mobile de-
vices using over-the-top appli-
cations that let users bypass the
carrier’s text messaging service
and avoid additional fees. The
messages contain video and in-
teractive content that’s optimized
for the user’s smartphone. Mul-
timedia messaging (MMS) can
­include ­attachments that the user
can open, but in RMM, the entire
message can contain graphics and
functionality. Engagement rates
through RMM applications are
significantly higher than through
character-based SMS, MMS, or
email messaging.
Gamification of Mobile Ads
This technology lets users score
points or achieve ranking ­(badges
or through competing with
friends) that increases mobile
engagement.
Developing Mobile
Location Strategies
The great power of mobile tech-
nology is the ability to leverage
location and multiple levels of
granularity to specifically target
users given the context of their ac-
tivities. Phil Hendrix, of research
based consultancy IMMR (www.
immr.org), considers location
from a temporal and contextual
(as well as geospatial perspective):
Location is not merely a posi-
tion as reflected by latitude and
longitude. Consumers are situ-
ated in time and space. Mobile
enables marketers to deliver
marketing at the intersection
of both, thus targeting the mo-
ment in time and the location
context around it. As a result,
marketers can deliver market­­
ing that is appreciated and valu-
able because it is inextricably
linked to the world around us
and related to our lives at pre-
cisely that point in time.8
According to Hendrix, location
is a continuum that ranges from
the macro level—the span of com-
munication at the city level, typi-
cally served by local newspapers,
TV, and radio—down to the micro
level of an individual product on a
shelf.8 The eight layers as defined
by Hendrix are city, area, vicinity,
center, store, aisle, package, and prod-
uct. In some cases, these leverage
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15/05/14 11:34 AM
 Spotlight
the same applications, approaches,
and technologies and lead to the
same outcomes, but the scale var-
ies. In other cases, the tools and
approaches are fundamentally
different. They all point to the
complexity and power of mobile
tracking, analysis, and targeting.
In theory, marketers could tar-
get the geographic and spatial
context of a consumer with vary-
ing levels of granularity, depend-
ing on the message, reach, activity,
and specific call to action.
City Level
At the city level, marketers can link
newspaper or magazine ads to QR
codes, which mobile users scan
using an app on their smartphone
to bring them to a website with
the next step in the engagement
process. Radio ads can now use
Shazam, the music fingerprinting
application typically used to iden-
tify and purchase music, to tag ads
and bring users to a website where
they can access content and ap-
plications. (By “shazam-ing” the
broadcast advertisement for an
automotive manufacturer, users
can access a variety of features and
functions, including a user-con-
trolled, gyroscopic view of a “car’s
interior from the driver’s seat, a
virtual pedal to rev the engine, and
the full mobile website.”7)
Area, Vicinity, and
Center Levels
These are loosely defined geo-
graphic scales at increasing levels
of granularity and smaller location
boundaries. “Area” is defined as a
neighborhood, zip code, school
district, or other section of a city
or town. “Vicinity” is defined as
a one-mile radius of a location
for businesses targeting “nearby”
customers, and “center” refers to
a commercial zone or cluster of
businesses such as a mall. Com-
panies like Placemeter (http://
placemeter.com) are attempting
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itpro-16-03-Spot.indd 64
to locate ­ sensors in these areas
to directly measure the impact of
campaigns and determine levels
of activity and pedestrian traffic
patterns.
Traditional advertising (such as
billboards and direct mail) reach
this level of granularity in geo-
graphic targeting. Data vendors,
such as PlaceIQ, collect data from
mobile devices and integrate with
multiple public and proprietary
information sources to allow col-
lation and triangulation down to
as fine a detail as geographic tiles
of 100 × 100 meters. This data is
temporal in nature—different mo-
bile usage patterns will emerge in
the same grid throughout the day.
Based on device tracking and histo-
ry, combined with other data sourc-
es, the company says that audiences
can be identified across numerous
categories, brands, and personas,
­ monitor movements within depart-
such as “avid golfer, luxury shop-
per, and chief household officer”
(see www.placeiq.com/products/
piq-aud i ences). Vendors with
similar location and audience tar-
geting (mostly advertisement) plat-
forms include ThinkNear (www.
thinknear.com) and xAd (www.xad.
com).
Store Level
At the store level of detail, market-
ers are attempting to deal with the
phenomenon of “show rooming,”
where customers come to the store
to look at items, check for compar-
ative offers and pricing online, and
then (potentially) purchase from a
competitor. A number of strategies
are being tested in which retailers
attempt to engage with custom-
ers through apps and offers by
leveraging geofencing and beacon
technologies. Geofencing lets a re-
tailer determine when a customer
enters the store and, depending on
a host of factors and permission-
ing, might let the retailer identify
that customer, make a specific of-
fer, and even see the ­ customer’s
­urchase history to determine if
p
VIP treatment is warranted.
Another approach at the store
level is that of “conquesting”—that
is, advertising and promoting your
brand or product next to content
about a competitor. Originating
in the print world, it now has new
meaning using mobile technology
as businesses geofence around
their competitors and promote of-
ferings to customers while they’re
in the competitor’s location.
Aisle Level
At the aisle level, retailers can in-
teract with customers in a ­number
of ways using QR codes, near field
communications, and B ­luetooth
to engage with customers as they
browse merchandise. Beacon
technology is another tool that
can determine traffic patterns and
ments. This technology is valuable
in determining effectiveness of
store layouts and signage. Accord-
ing to the Mobile Marketing As-
sociation, “Real-time ‘footstream’
traffic is analogous to clickstreams
on digital properties.”8
Package and Product Levels
Package- and product-level gran-
ularity leverage many of the same
technologies but are different ap-
plications—packaging can have
a QR code or sensor, as can the
product itself.
Omnichannel Marketing
In-store mobile applications sound
appealing in theory, but in practice,
they’re challenging to get right.
It’s difficult to synchronize across
channels, and data on effectiveness
isn’t yet widely available. However,
retailers will continue to explore
the possibilities that mobile de-
vices offer, finding ways to address
integration and privacy issues. Re-
tailers want to synchronize across
channels—having the same offers
whether online, in the store, on a
15/05/14 11:34 AM
 mobile device, or through tradi-
tional advertising and media. The
experience on smartphones and
tablets should be consistent with
that on a Web browser on desktop.
“We have chosen an omnichannel
approach. We keep the marketing
messages the same between online
and brick and mortar,” says Cost.
“Google is trying to focus on how
to quantify Adword impact on in-
store sales. They want to increase
their advertising base by working
with retailers to try to quantify the
benefit of Adwords to brick and
mortar stores.”
Cost also says a company called
Euclid Analytics (http://euclidanalytics.
com) is trying to be “the Google
Analytics of the physical world.”
With their technology, if you of-
fer Wi-Fi to a customer who has
Wi-Fi enabled on his or her smart-
phone, the phone will then trans-
mit a unique media access control
(MAC) address. Euclid Analytics’
Wi-Fi device can then identify cer-
tain MAC addresses that were in
the store on any particular day. If
the customer later opens an email
from the retailer, the company can
associate the device MAC address
with the customer’s email. Cost ex-
plains that this type of technology
“can be used to test store signage,
allowing A-B testing, because the
company can see who walks by the
store versus who comes in.”
Motorola is also offering a Wi-Fi
device for brick and mortar stores
to tie in email addresses, and
Google has similar plans. How-
ever, these are new approaches for
leveraging store-level geotarget-
ing, so there’s not a lot of related
data yet.
There’s also a good deal of de-
bate on apps versus responsive
design versus mobile optimized
approaches. Although there are
numerous vendors approaching
retailers with apps, in Cost’s expe-
rience, customers haven’t shown
much interest. In p ­ articular, Shop
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itpro-16-03-Spot.indd 65
Debs created an app that let us-
ers scan a tag and see the clothes
on a model, along with a prod-
uct description and social media
tie-ins. However, although signs
promoted the app and staff dem-
onstrated its use, customer reac-
tion was disappointing. “They
said it was cool but never touched
it. The feedback was that they had
seen it on the website and traveled
to the brick and mortar to experi-
ence the store.”
Responsive design is an ap-
proach that allows a single design
and content to be viewable on a
full-size monitor, on tablets of
varying sizes, or on a smartphone.
However, “designing for the
smallest design (smartphone) and
then adapting that to larger de-
vices is catering to the least com-
mon denominator” says Cost. His
preference is to develop a separate
design that is mobile optimized
while maintaining a single plat-
form to manages content across
mobile and desktop devices.
M
obile commerce and
omnichannel market-
ing present tremendous
opportunities for all industries,
so organizations will want to have
mechanisms for serving customers
on their smartphones and tablets.
Omnichannel approaches present
new challenges and require new
solutions to data integration, pre-
dictive analytics, content modeling,
and user attribute development. IT
professionals will be well served by
tracking these fascinating technol-
ogy developments and understand-
ing the changing face of commerce
and customer interaction strategies.
These fields are rapidly evolving
and will require IT professionals to
continually update their knowledge
and skillsets to serve their business
stakeholders as they attempt to le-
verage mobile commerce to gain a
competitive advantage.
References
1. B. Evans, “Mobile is Eating the
World,” Slideshare, Nov. 2013; www.
slideshare.net/bge20/2013-11-mobile-
eating-the-world.
2. B. Siwicki, “Will Smartphones
Account for Most Visits to
E-Commerce Sites by 2014?” In-
ternet Retailer, 23 Apr. 2012, www.
internetretailer.com/2012/04/23/
will-smartphones-account-most-
visits-e-commerce-sites.
3. “Smartphones, Tablets Drive Faster
Growth in Ecommerce Sales,” eMar-
keter, 24 Apr. 2013; www.emarketer.
com/Article/Smartphones-Tablets-
Drive-Faster-Growth-Ecommerce-
Sales/1009835.
4. “Merchants Seek Mobile Mastery:
A Task-Oriented Review of the
Mobile Experience,” The E-Tailing
Group, Oct. 3013; www.e-tailing.
com/content/?p=3720.
5. J. Leber, “Get Ready for Ads that
Follow You from One Device to the
Next,” MIT Technology Rev., 5 Dec.
2012; www.technologyreview.com/
news/508176/get-ready-for-ads-
that-follow-you-from-one-device-
to-the-next.
6. J.L. Schiff, “6 Mobile Marketing
Trends to Leverage in 2014,” CIO,
30 Dec. 2013; www.cio.com/article/
745152/6_Mobile_Marketing_Trends_
to_Leverage_in_2014?page=1&taxo
nomyId=600003.
7. L. Arthur, “The Next Big Thing for
Marketing,” Forbes, 14 Sept. 2011; www.
forbes.com/sites/lisaarthur/2011/09/14/
the-next-big-thing-for-marketing.
8. Mobile: the Great Connector, white
paper, Mobile Marketing Assoc.,
2013; www.mmaglobal.com/bridging-
digital.
Seth Earley is CEO of Earley & Associ-
ates (www.earley.com). He’s an expert in
knowledge processes and customer experi-
ence management strategies. His interests
include customer analytics, knowledge
management, content management sys-
tems and strategy, and taxonomy and
metadata development. Contact him at
seth@earley.com.
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