Part Two: Mobile Is Transforming Retail & Money


Read Part One: The Mobile Industry on the Move
Read Part Three: The Connected Car & Eight More Mobile Trends


More than 67,000 visitors from 205 countries attended the Mobile World Congress (MWC) this year. MWC attracted executives from the worlds largest and most influential mobile operators, software companies, equipment providers, Internet companies and media and entertainment organizations, as well as government delegations from across the globe. More than 50 percent of this year's MWC attendees hold C-level positions, including 3,500 CEOs. The race is on to transform the global economy, connect people and fundamentally change the ways we interact in business and in society. This is second of three parts that reviews the highlights and trends highlighted from Mobile World Congress.

There were ten areas that came up throughout the week on different days and in various panels.

· Speed at which the market in moving

· Mobile Money

· Connected car*

· Mobile Health

· Capital investment to build out infrastructure.

· The need to re-write the regulations that govern the industry

· Big data/ The Cloud

· Education/ Agriculture

· Machine to Machine Communications

· Security

1) Speed (At Which The Market is Moving)

Overview: John Donahue, CEO of eBay says that we are at a commerce & payments inflection point. There will be more change in the next 3 to 5 years than in the last 20 years. E-commerce is already a $500 billion dollar business. Retail, by contrast, is an $8 trillion dollar business. Ebay reports that 1 out of every 10 of its deals was done on a mobile phone. Ebay reports that 50% of all products purchased are researched online. Ebay's 70 million customers generated $5 billion of revenue in mobile purchases last year and in 2012 they are expected to generate $8 billion in revenue. The eBay motors division sells 3,500 cars each day via mobile phone. Ebay's PayPal had $4 billion in transactions last year with 17 million customers.

Best Buy reports that 77% of orders online or on mobile phone are picked up in 24 hours and 63% are picked up in less than 12 hours.

Shopping via mobile phone is growing 100% monthly.

2) The Mobile Money War

Episode One- The Clash of the Titans

Overview: Coalitions of retailers, telecom operators, handset manufactures, banks, credit cards, Google, Facebook, along with known and unknown start-ups are in competition for the projected $600 billion in global transactions over the mobile phone by 2016. According to ABI Research, 20% of Tokyo's digital shopping is done via smartphone. In the U.S. market, The Wall Street Journal reports that 17% of retail sales for the 2011 season were done on iPads.

The stakes are great and big questions such as "who owns the customer" and their data raises and how consumer privacy is protected are just a few of the issues to be resolved. Intellectual property rights, government taxation and regulation are just beginning to emerge as players in this battle for the mobile wallet. The market is ripe for a disruptive innovator and one is sure to emerge. One only has to think back to 1995 when start-ups such as Amazon and eBay emerged as products of the Internet to see what happens to companies well positioned at an inflection point. Unlike the Internet boom, this innovation cycle has already begun and unlike past cycles it is playing out over the next five years

The Consumer Value Proposition: The consumer is offered simplicity with no need for credit cards or cash and loyalty point automatically calculate and tabulate purchases into the loyalty programs of your choice.

The Players:

Retailers: Wal-Mart, Target and other big box retailers along with drug stores, quick service restaurants and vending machine companies representing $1.38 trillion in revenue are in one camp.

Google: Google wallet is working with MasterCard, Citigroup, Sprint, American Eagle Outfitters, Macy's, Walgreens and 150,000 merchants.

Telecom: AT&T, Verizon and T-Mobile have combined efforts with Isis, which is their mobile wallet solution.

Banks: JP Morgan, Capital One, Barclays are working with Isis.

Credit Card Networks: Merchants are unhappy with the current system and credit card companies are trying to find their own solutions and partnerships.

Facebook: Facebook is participating in "a number of industry wide initiatives" intended to support the development of the mobile web, focusing on technology standards and payment enabling. Operators working with Facebook on streamlined billing are AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI and SoftBank.

Banking in Emerging Markets.

· 40% to 50% of foreign remittances are done person to person and those payments will move to mobile in the next five years.

· Mobile money is moving from operator control to banking control.

· Royal Dutch Shell reward drivers with free airtime based on their driving safety rating

· There is a big opportunity for value-added services. A good example is when you pay the parking meter in Austria you get an SMS message when you have ten minutes left on your parking meter.

· Mobile Banking is growing rapidly in the developing world. In Bangladesh, they are adding 2,500 to 3,000 new accounts each day and in one year there will be more people banking on their mobile phones than at banks.

Implications for Marketers: Marketers will be able to make offers directly to consumer eliminating the need to FSI's, direct mail, email marketing. The marketers with the best loyalty and CRM database will have a competitive advantage in both mature and emerging marketing. A new industry of mobile shopper loyalty is already emerging.


Part One: The Mobile Industry on the Move
Part Three: The Connected Car & Eight More Mobile Trends


Dan Hodges is Chief Revenue Officer of Verve Wireless, Dan works directly with agencies and brands providing solutions and partnerships across Verve’s national footprint of premium local media properties. Dan can be reached at daniel@vervewireless.com.

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