Mobile Commerce Guide

Engage Customers and Build Loyalty in Developed and Emerging Markets

Mobile Commerce Guide

Engage Customers and Build Loyalty in Developed and Emerging Markets


Table of Contents
Mobile Commerce Guide Engage Customers And Build Loyalty in Developed and Emerging Markets Published by: SAP AG Dietmar-Hopp-Allee 16 69190 Walldorf Germany Copyright © 2013 SAP AG or an SAP affiliate company. All rights reserved Library of Congress Cataloging-in-Publication Data SAP Mobile Commerce Guide Engage Customers & Build Loyalty in Developed and Emerging Markets Edited by Peggy Anne Salz p. cm. ISBN Number: ISBN 9780988588677 1.Mobile technology. 2. Mobile commerce Library of Congress Control Number: 2013906059 Printed in the United States of America Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

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FOREWORD By Sanjay Poonen, President, Corporate Officer, Technology Solutions and Head of Mobile Division, SAP

Mobile: A License To Thrill A look at how mobile is impacting business, people and society at every level, everywhere on the planet. By Tomi T. Ahonen, best-selling mobile author Who Will Lead The Mobile Commerce Charge? The advance of mobile and the breakneck pace of technology innovation are coming together to provide amazing opportunities for banks to extend financial services to new and existing customers - but banks aren't the only ones taking action. By Pradipto Pal, Executive, Accenture Mobility Money 2020 And The Business Case For Mobile Payments: The Role Of Rewards Compelling reasons why financial institutions need to leverage the consumer data that is locked in their debit and credit card products to better service consumers and better partner with retailers to drive commerce. By Aaron McPherson, Practice Director, Worldwide Payment Strategies, IDC Financial Insights Mobile Commerce And Financial Institutions In Latin America: An Evolving Ecosystem Banks are jockeying for competitive advantage using some rather sophisticated smartphone apps and approaches that deliver utility, drive engagement and stand out from the crowd. By Mary A. Gramaglia, Director of Sales, Latin America, Mobile Commerce, SAP




Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


By Abbas Khan. Shift Thought 82 84 PART 3: BANKING IN DEVELOPING MARKETS: PLOTTING THE COURSE FOR FINANCIAL INCLUSION AND FINANCIAL SUCCESS Advancing New Frontiers For Financial Inclusion Pakistan is one of the fastest growing branchless banking markets in the world.000 customers each month since the commercial launch in 2012. Global Head of Financial Services Industries. personalize service bundles — or make way for companies that will. Strategy and Finance Director. RBS Citizens The Convergence Of Mobile And Online Banking This is the future of electronic banking that requires a common middle layer with business logic and messaging infrastructure. AbacusConsulting Accelerating Mobile Banking Through Collaboration Malaysian Central Bank is on a mission to transition Malaysia to a high value-added. high-income economy by 2020. By Simon Paris. By Wan Razly Abdullah. Practice Lead. PT Bank CIMB Niaga Tbk 50 52 PART 2: BANKING IN DEVELOPED MARKETS: TAKING CHARGE OF CHANGE Banks: Evolve. SAP. Vaughan. MyClear Mapping The Market For Financial Inclusion HBL is harnessing mobile technologies to do more than enable the delivery of innovative banking services. By Jacob Jegher. SVP. access to convenient mobile banking services that put them in control of their financial future. By Taylor J. By Abul Kashem Md Shirin. Head of Product – Delivery Channel. the number five bank in Indonesia. A big part of the plan involves the widespread and rapid migration to electronic payments spearheaded by MyClear. spend and shop. Mobile Commerce. By Davor Ebling. Dutch-Bangla Bank Limited CIMB Niaga. To keep pace First Tennessee Bank delivers financial services that empower executives to act fast and conduct transactions on the move. By Charmaine Oak. Digital Money. Celent Breaking The Mobile Banking Mold Organizations must be agile. and Matthew Talbot. signing up an average of 100. Now the bank is planning additional services using new authentication technologies to grow that number exponentially. Senior Vice President. AbacusConsulting recounts recent developments in mobile banking and the impact on the local landscape. Director. Partner. Treasury Solutions. Deputy Managing Director.43 Digital Money Sweeps Mexico And Brazil As the mobile money phenomenon sweeps across Brazil and Mexico banks aren't the only ones lining up to transform financial services. Innovate And Embrace ‘True Multichannel’. through innovative services and social media outreach is preparing for a day when today's unbanked will be part of the burgeoning middle class. Or Be Left Behind Banks must generate customer-centric insights through advanced analytics that will allow them to enhance products. Retail Payments Division. it is providing all people. Habib Bank Limited Creating New Pathways For The Poorest DBBL launched mobile banking services targeting the unbanked. including the poor and rural populations. Director. By Scott Manley. First Tennessee Bank 6 Ways To Wring More Value Out Of Multi-Channel Banking The pressure is now on banks to help their customers make smarter decisions based on increased visibility into all their accounts as they save. Research Director. Director of Treasury Management Services. Mobile Commerce Solutions. By Siek Kar Teck. Head of Payment Services. By Faiq Sadiq. SAP 92 59 96 64 69 75 101 108 Targeting Tomorrow’s Mass Affluent 4 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 5 . SAP Removing Friction To Build Relationships At RBS Citizens the goal is to get customers in and out fast — and success is all about delivering financial services that respect customers' time.

A successful approach is one that uses mobile apps and the mobile Web in the right combination to make shopping across all channels seamless and personal. By Rambert Namy. timely information. Slow Store: A Mobile Playbook 161 127 Open Solutions Could Help Fulfill The Promise Of Mobile Money 131 166 Mobile Retailing 2. btpnWOW! 140 PART 5: RETAIL. By Sal Karakaplan.114 Branchless Banking Driven By ‘Disruptive Innovation’ Bank BTPN reveals its plans to disrupt the market with a new and cost-effective model aimed at empowering people at the bottom of the pyramid to manage an interest-bearing bank account. Ooredoo is positioning itself to be a leading provider of mobile money services and one of the world's top 20 mobile operators by 2020. Vice President. SAP How retailers can realize the full potential of the greatest marketing tool ever invented to win the battle for the customer and get the edge on online rivals. Mobility Solutions in Retail. By Panagiotis Papadopoulos. utilities and consumer products companies are exploring how they can deliver relevant. only a handful have reached meaningful scale. By Yankee Group Smart marketers in transportation. By Afizulazha Abdullah. SAP 122 PART 4: MOBILE OPERATORS: PAVING THE WAY FOR MOBILE 124 SIM-Based NFC: Enabling A New Level Of Interaction For Latin PAYMENTS AND MORE American Big Events A string of NFC trials are taking place in Brazil just in time for the FIFA 2014 Soccer World Cup and the 2016 Olympic Games. and highlighting new business opportunities. Here are some key examples and learnings revealing what makes services tremendously successful. Ooredoo 148 Opportunity At The Intersection Of Retail And Mobility 153 Fast Shopper. RSR Research 6 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 7 . By Gary Schwartz. Head of Business Development. Celcom Axiata Berhad Showrooming. By Valter Wolf. Retail Mobile Lead. By Donny Prasetya. enabling consumers to make payments and access information. Survival Guide: Evaluating The App Vs. CEO. one of the first mobile wallet services to launch in Malaysia. Web Debate Mobile apps vs. Market Development Director. mobile Web is a topic of heated debate in the industry today. and special offers right to the consumers’ smartphone. Now efforts focus on integrating AirCash into its larger customer loyalty program. Deconstructed A guide to help retailers build the key capabilities that will allow them to clinch the deal and stem showrooming. By Nikki Baird. Mobile Money. Managing Partner. Global Principal. By Mickey Haynes. Impact Mobile. Program Principal. CONSUMER PRODUCTS: MASSIVE 142 Mobile Shopping And Coupons Transform Retail OPPORTUNITIES AT THE INTERSECTION Yankee connects the dots through recent data and surveys to show why — and how — mobile coupons are becoming the way to lure shoppers. By Colin Haig. SAP Retail Actionable insights and valuable advice to connect with the 'new' mobile consumer. MasterCard Preparing To Deliver ‘Advanced’ Services From enabling merchant payments to driving financial inclusion. Chief Digital Services Officer. promotions.0: Connect With The Customer At The Point of Decision 171 136 Expanding Mobile Wallet Capabilities To Encourage Customer Loyalty Celcom has made its mark with AirCash. Head of Mobile Financial Services. GSMA With over 100 mobile money deployments globally.

Becker. and to accelerate revenues and deliver customer value. SAP Retention And Profits Retailers must take proactive action to turn mobile into an asset that delivers revenue and customer engagement. Oglesby. to thank existing customers and attract new ones. SAP Canadian transport authority STM has launched an innovative mobile customer rewards pilot program. Mobile Application Solution Management – Consumer Mobile. and sensor data to delight customers.175 Consumer Focus Key To Closing The Mobile Commerce Loop Innovative retailers are using mobile to equip their stores and empower their staff to deliver an omni-channel experience personalized to each customer. Director Mobile Solutions Management. Mobility Solutions for Retail. 8 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 9 . Senior Director. Société de transport de Montréal Customers are moving to mobile and other channels to solve issues. By Michael J. SAP 214 Utilities Customer Engagement 192 Reaching The Mobile Consumer 220 PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES 222 Starbucks: A Mobile Payments Case Study 232 Weighing The Alternatives To NFC AT RETAIL Exclusive insights to track and analyze the stellar success of Starbucks' mobile based payment system called ‘mobile pay’. By Rakesh Gandhi. Portio Research An evaluation of alternative mobile payment technologies shows the benefits and drawbacks to conclude that the ideal solution may be a combination of 'all of the above'. Vice President. SAP 204 Detect. Global Principal. By Haridas Nair. the purchase funnel and the many moving parts marketers need to understand to encourage commerce. By Sam Gellar. Analyst. Mobile Marketing Association Organizations must be careful not to miss the opportunity to build mobile into a wider strategy. Lopez Research 210 Public Transport Drives Personal Loyalty Technology and analytics are coming together to allow retailers to radically redefine the relationship they have with their customers in real-time. Oglesby. SAP 200 The Engaged Retailer: How Mobile And Big Data Improve Revenue. Cisco Systems and Jason A. mCommerce Products and Solutions. trigger conversions and boost customer engagement. report outages or simply check their bill — and utilities companies need to prepare. Business Development. By Jason A. Founder and Principal Analyst. that is cohesive across all channels. delivered by a smartphone app. They can start by building an information technology and customer-facing strategy that capitalizes on mobile attributes such as location. By Maribel Lopez. Head of Marketing. Director Mobile Solutions Management. By Mark Dahm. Senior Manager. Wireless Networking Group. Managing Director North America. activity. By Pierre Bourbonniere. to enable meaningful — and ongoing — customer engagement. By Mickey Haynes. Connect And Engage 182 PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) 184 Gateway To The Future Of Customer Relationship Management CONNECTION WITH YOUR CUSTOMERS Examining the customer journey.

10 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 11 . SAP 240 A Serious mPOSition 244 PayPal: Enabling Payments Anytime. PayPal Learn how to leverage this new mobile marketing imperative to drive sales. Business Line Manager. communicating with themselves and with us. General Manager. mobile commerce is becoming a fact of life. Corporate Officer Technology Solutions and Head of Mobile in 1995 was a big phenomenon. worldwide mobile penetration has already been remarkable. boost loyalty. Already the number of people using their mobile phone to access the Internet far exceeds the number using a desktop PC. a surge of innovation in developed and developing markets and a growing consumer requirement for an enhanced. It is also transforming banking and commerce. If we think that the birth of electronic commerce and the advance of eBay and amazon. But mobility is not only enabling rich and always-on interactions. we are arguably on the cusp of a fourth revolution: the age of Trillions. By Mickey McManus. Digital Wallet. Anywhere And Via Any Screen Mobey Forum has seen more than 30 mobile point of sale (mPOS) solutions launch around the world and considers the implications of this trend for banks as they forge customer relationships with merchants. driven by the advance of mobile technologies. President and CEO.2 billion mobile phone users and counting. Mobile DE. Mobile has the power to trigger a seismic shift in commerce because consumers already live their lives on mobile. Maya 266 APPENDIX Company Descriptions With nearly 3. Mobey Forum In Germany PayPal has completed a successful trial of its PayPal QRShopping solution and shares its strategy to change the entire end-to-end shopping experience across all screens. relevant and — hence — more contextual retail experience.FOREWORD FOREWORD Sanjay Poonen. President. The impact on all industries will be profound. Reams of research documents people — everywhere — reach to their mobile devices every step of their daily journey. then the impact of mobile is going to be transformational. Urban Airship 251 How Apple’s Passbook Ushers In The Third Mobile Marketing Wave 258 PART 8: CLOSING THOUGHTS: THE ROAD AHEAD 260 Big(ger) Data Pushes The Boundaries Today. By Sirpa Nordlund. Indeed. creating a new global mobile marketplace that is always accessible and always ready for business. But the real excitement starts when these microprocessors join the conversation. By Tobias Zadow. Executive Director of Mobile Financial Services. and increase customer engagement. By Joe Beninato.

Another driver is the passion Millennials have for personal mobility. In many regions of the world, people under the age of 40, a segment keen to adopt mobility innovations and integrate mobile into every aspect of their lives, will be the majority of the population. This will create new opportunities, and new pressures, for companies across the emerging ecosystem — banks, card issuers, mobile operators, app developers, merchants — to enable commerce experiences that know neither boundaries nor friction. Mobile is also driving financial inclusion, allowing banks such as Dutch-Bangla Bank Limited in Bangladesh to extend their services to the unbanked. The impact is profound as financial institutions — and mobile operators where regulation allows — empower people at the bottom of the pyramid to participate in society and improve their quality of life. Mobile operators are experiencing similar success. Ooredoo, a multi-country mobile operator group has identified mobile money as a key capability and a pillar of its initiative to be one of the top 20 mobile operators worldwide by 2020.

Moreover, mobile is evolving, driven by companies that have succeeded in enabling person-to-person payments and have set a course to transform the entire retail environment. It’s new territory that offers new challenges — and huge benefit to the companies that can master them. To help you navigate this new market and grasp the growth opportunities ahead the second edition of the Mobile Commerce Guide has brought together a wide variety of case studies and success stories, contributed by the executives who helped make them reality, to show how mobile impacts the Retail, Consumer Product, and the Utilities industries. As this Guide shows, precisely how companies can deliver value — and communicate this to their customers — will depend on a variety of factors. Banks may encourage and educate unbanked to see their mobile wallets as instruments that allow them to save money and plan their financial futures; mobile operators may share infrastructure and best practices to reach and educate

customers faster; retailers and consumer product companies may refine their models to enable contextual commerce their customers genuinely welcome and appreciate because it is personally relevant and valuable; and utility companies may harness mobile to provide customers new visibility into the services they use and the payments they make. To wield the transformational power of mobile for your business, you must first fully understand its impact. The examples gathered in this Guide for this purpose are global and diverse. But — more importantly — the insights presented here, drawn from the expertise and experiences of more than 40 leading analysts, professional industry organizations and futurists, are actionable. These are exciting and challenging times. Whether you are eager to start planning your mobile commerce strategy, or seek guidance as you expand your existing offer, think of this Guide as a knowledge resource and companion on the journey ahead.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


PART 1: Mobile Commerce: Mapping The Competitive Landscape



The advance of mobile technologies, a surge of innovation in emerging markets and increased consumer requirements for enhanced retail and commerce experiences present opportunities for the ecosystem. Banks, mobile operators, card issuers, app developers, and retail chains are all jockeying for position to establish competitive offers and grow their footprints. In this section, we explore the current global ecosystem and hone on key regions (Latin America, Asia Pacific) and important offers (mobile payments, mobile wallets, mobile apps) to shed light on a much larger trend. It’s all about enabling transactions (and commerce) that harness mobile to deliver customers real benefit.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


PART 1: Mobile Commerce: Mapping The Competitive Landscape

Mobile: A License To Thrill
By Tomi T. Ahonen, best-selling mobile author

You may have noticed that the world’s biggest Internet company, Google, says the future of the Internet is mobile. You probably noticed too that a once hoveringnear-bankruptcy PC maker called Apple Computer dropped ‘computer’ from its name, launched mobile phones, and today calls itself a mobile company.
Oh, and you might recall that Apple was — for a while last year — the most valuable company on the planet, making the biggest profits. But did you also know that the computer-era billionaire Bill Gates is no longer the worlds’ richest man? That title was taken by Mexican Carlos Slim. What could possibly replace computers as the engine to generate such wealth? In a word: mobile. By the way, Carlos Slim Helú runs Mexico-based América Móvil, one of the world’s largest mobile telecoms empires stretching across all of Latin America.

Yes, mobile seems to be an engine to deliver growth, revenues, profits, and wealth for those technology, telecoms, and IT companies. Now let me ask you this: Did you hear what Electronic Arts, the world’s largest game developer says about the future of gaming? They declare it is mobile. What about the BBC, the world’s largest radio and TV broadcaster? It says that all broadcast content will become available on mobile phones. What about Warner Music? It said wireless is the future of music. What of Sony, the world’s largest home electronics company? The CEO there just said that mobile was front and center of Sony’s future. And Samsung? The world’s largest tech company said last year that their mobile unit is the driving force of their profits. Or Facebook, the biggest social media company? It revealed last year that more than half of users now come from mobile - and that the future of social media is... (you guessed it!) mobile. Not to be outdone the Associated Press, the news agency headquartered, in the U.S., announced that it was the mobile phone, not the traditional Internet, which was the future of the news media.

I could go on and on. But let’s forget about the tech and media industries. Take Visa, the world’s largest financial company by number of users and obviously the world’s largest credit card company. They now say that the future of payments... is mobile. The world’s largest lock maker, Assa-Abloy is building locks that are operated by your mobile phone. The world’s largest airline by passenger miles, Delta, is now deploying mobile phone based check-in and boarding passes. In France Carrefour, the country’s largest retailer has deployed mobile solutions so advanced that they will help mobile shoppers find the shortest route in the stores. To assist shoppers the shopping list stored on their mobile phones is even re-arranged by aisle, depending on which store you go to. In Japan McDonald’s the world’s largest restaurant chain, has already convinced one out of every six Japanese consumers to sign up to receive mobile coupons and offers. And speaking of ads, Coca-Cola, the world’s largest soft drinks maker, recently ran an international multi-platform ad campaign with mobile at the heart of it that achieved a whopping 45 percent response rate!

Mobile is massive When I wrote my first book about mobile services and apps over a decade ago, this whole mobile industry was only an experiment that spanned some random countries where they spoke languages nobody else ever bothered to learn, like Finland, Japan, South Korea and Sweden. It was eccentric to believe in mobile back then, and an act of faith to think mobile would ever be big. When I showed off the ‘cool’ ways these mobile phones could play elementary music snippets — known as ‘ringtones’ at the time - most said it was a fad that would never catch on. Today mobile data services are a massive global hit! In fact, they were worth US$436 billion last year. Yes, bigger than the Internet, bigger than global radio, bigger than Hollywood movies, bigger than video gaming. The mobile data industry is the fastest-growing industry of all time. No wonder it turns around companies like Apple, or creates billionaires like Carlos Slim.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


It’s not just saving him time. for example. They cannot qualify for a bank account to put their money away safely because they lack the proper identification and a permanent address. No matter who you are or what you do mobile is your tool to get ahead. the ground is washed away . Was he the first mobilista-Pope? No. and this in only six years. and soon you’ll see that mobile is already a huge part of daily life in countries across the globe. M-Pesa in Kenya launched six years ago. The Hockey News. the ground is dry and is blown away.We are mobile. jewelry store decided to mobile-optimize their Website which 18 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 19 . The World Bank counts nine countries in Africa where already at least 10 percent of the adult population uses mobile money or mobile payments. But once the miracle of mobile payments arrives. a phone. They had a popular Website where they sold tickets. they achieved a three-fold increase in their ticket sales on their mobile sites. President Barak Obama’s re-election campaign masterfully utilized new media in many forms. allows the farmer to control his irrigation from home at a few clicks of his phone. If you irrigate too much. last year the Central Bank of Kenya told us the amount of money that transited mobile phones was equal to 48 percent of the total Kenya GDP. mobile everywhere Vertical industries are also getting in on the action. Pope Benedict XVI. When they mobilized their Website. suddenly anyone can have the basic safety benefits of depositing their money onto something — a also saves with soil erosion! If you irrigate too little. Yes. nearly half already transits mobile phones. Run by the mobile operator or the local bank. they observed a positive knock-on effect on print sales. Literacy is also an issue. It’s a risky business. So what do they do? They try to hide what little cash they have. One of Mobile. In many parts of the developing world people have only managed to save small amounts of money — if any. did it too. Tiffany’s the U. too But what about you and mobile in your life? Let’s look at mobile starting with some very basic services and abilities.S. The Vatican has been sending mobile messages to the faithful since January 2003. and safe. these services empower the poor to save and plan a better future. which increased by 5 percent! What print title reports increases in circulation these days? The moment the decision was official. Mobile money prospers And let’s not forget mobile money. a weekly ice hockey magazine. the previous Pope. Now there is a mobile solution for that. It’s not safe — and burglars. Your life savings are gone. a branchless bank account — that is permanent. Politicians are also harnessing mobile to drive amazing results. thieves. Similar stats come all around the world.000 new paying mobile readers as an the farmer downstream who is only too happy to get your topsoil. Pope Francis sent his first greetings via SMS. Did you know there are now mobile tools and services that help kids study better for their school work? In South Africa. launched a pure mobile version of the magazine and not only found 100. and water. a local mathematics books publisher released a mobile math practice solution that helped South African students using it score 14 percent better in national math exams! Or what about a farmer in India? The time to go turn on and turn off the irrigation at the farm can take hours riding a bicycle from one irrigation valve to another. Was that an innovation for a religious leader to use text messaging to reach masses of followers? No. The solution. trusted. and the costs of electricity and money . An example is Willer Travel. caused their jewelry sales via the mobile channel to more than double. Let’s start with children. a long distance bus company in Japan. which uses SMS. of the total Kenya economy. animals and natural disasters can take the money way.

is the power of mobile. this industry is even letting mobile be the way we connect with the memory of our loved ones long after they are gone. so our memories of our dear departed can be cherished and shared by friends. as well as a regular blog that has gained him the number one spot in the Forbes Top 10 Power Influencers in Mobile1. From car manufacturers to funeral homes. and one of the most published authors in the mobile industry.Coca-Cola. It doesn’t matter if you’re living in the most advanced digital nirvana or a person carving out an existence in the developing world. But Obama actually won by 4 percent. It also helps you reach better and bigger audiences that will 1. become more loyal to you. more profitably and more reliably. This never-before-used tactic of sending a text message to call voters to action (make a phone call to someone to convince them to vote for Obama) probably accounted for the lion’s share of that surprisingly large winning margin. Yes. Yes. I said funeral homes. No matter who you are or what you do mobile is your tool to get ahead. Yes. educate the students. mobile is a wonderful technology that is completely changing every aspect of our world. FOOTNOTE Tomi T. This one SMS text message was estimated to have achieved 1. mobile can help you heal the sick.9 million bonus volunteer phone calls on Election Day because of the acts of volunteers who agreed to donate one phone call to Obama. If you are a business you can harness mobile to get more customers and make more money — more quickly. In 2013 there is no industry that is not being impacted and revolutionized by mobile technology. The impact was profound. Ahonen is an ex-Nokia executive.5 million such SMS text messages were sent to all those who had given Team Obama their mobile phone number. It’s the first thing we see when we wake up and the last thing we look at before we fall asleep. my friends. get the votes to be elected and improve your life. And now. if you get the value exchange right. www. recently ran an international multi-platform ad campaign with mobile at the heart of it that achieved a whopping 45 percent response rate! the highlights was on Election Day. That. All the polls in the last days before the election measured the vote to be very close. asking them to make one phone call on behalf of the President. relatives and ‘significant others’ who scan the codes and access the things the deceased did and held dear. That difference was about 3 million votes. If you’re not a business. It doesn’t matter if you are a highly educated MBA or an illiterate fisherman. after receiving that message that morning of Election Day. These institutions are now deploying QR codes to gravestones. Mobile is with us every day everywhere. In total 9. He counts over a dozen books. Mobile to the end It doesn’t matter if you are a giant company or a tiny family-run business. when Team Obama sent out a text message to his followers and 20 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 21 . mobile is becoming part of their corporate DNA. about 1 percent advantage to Obama. the world’s largest soft drinks maker.forbes.

and mobile enabled consumer services (mEnabled Consumer Services). and discount cards for mobile transactions and commerce. Services can range from basic product information and transaction histories. card issuers. However. Accenture describes the current ecosystem and defines the capabilities mix that will be needed to serve the market of ‘less cash’ consumers of the future. 22 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 23 . mobile payment services (mPayment Services). Most banks are in the business of making money — and they have a huge learning curve to travel before they can serve the poorest of the poor. banks have the opportunity to venture into new businesses and further embed their brand in consumers’ daily lives. As a result. Mobile money transfers and purchases. But banks are not the only ones taking note. many banks find themselves in an unfamiliar position. The movement toward this new phase of mobility — which Accenture calls Mobile Life — is pushing mobile money offers in three distinct directions: traditional mobile banking services (mBanking Services). creating a new mobile marketplace that is always accessible and always ready for business. or mPayments. the recent advance of mobile technologies and emergence of new consumer behaviors has leveled the playing field.PART 1: Mobile Commerce: Mapping The Competitive Landscape Who Will Lead The Mobile Commerce Charge? By Pradipto Pal. and retail chains are also jockeying to establish competitive offers and grow their footprints. With nearly 6 billion connections and counting. app developers. and retail chains that are also jockeying for position in a value chain that spans activities from banking to commerce to CRM. new partnerships and new operating models are flooding the space and transforming the competitive landscape. new entrants. While the banking industry has dominated banking and payment services for many years. from SMS-based money transfers. struggling to keep up — or join up — with mobile operators. It is also transforming banking and commerce. app developers. Accenture Mobility The advance of mobile technologies. Least understood and not yet widely adopted. mBanking links customers’ bank accounts to their mobile devices and provides customers with a new way to manage their finances. Mobile operators. With mEnabled Consumer Services. worldwide mobile penetration has already been remarkable. These types of services can vary significantly in their sophistication. Often the initial point of entry for banks into the mobility arena. to Near Field Communication (NFC) payments. to a full “digital wallet” capable of storing multiple credit cards. open the door to previously unbanked markets. Executive. to more advanced operations such as loan applications and inter-bank fund transfers. Asia’s affluent Thus. banks should be aware that they are not the only ones with this ambition. a surge of innovation in emerging markets and increased consumer requirements for enhanced retail experiences present opportunities for banks to expand into new service areas and extend their existing services to the unbanked. mEnabled Consumer Services encompass a broad range of mobility offerings catering to specific consumer lifestyle needs within and outside the traditional banking realm. But mobility is not only enabling rich and always-on interactions. Banks may choose to extend existing offerings to new customers. Services can range from simple SMS-based promotion alerts to location-based targeted marketing. card issuers. branch out into new value segments or increase the sophistication of their services in a particular area. prepaid cards.

Indeed. demand in the region far outstrips supply of both services and bandwidth. that will drive more mobile app downloads and usage of the mobile Internet. Enterprise focus mEnabled enterprise mBanking services Mobile as a new interactive channel to increase customer loyalty and cross-sell opportunites Mobile Life mPayment services Mobile as a payment tool to target unbanked sections of society and expand mCommerce opportunities Customer focus mEnabled consumer services Augmented reality. this shift is happening much faster in Asia Pacific than in Europe or North America. This segment. a trend we already observe. In fact. while the ’ultra wealthy’ segment will swell by 37 percent (nearly double the global rate). NFC will likely gain serious traction. In addition. it is also becoming more passionate about mobile technologies and which includes the region’s upper middle class and high-net-worth individuals. the rapid growth of the middle class across Asia Pacific presents players with additional opportunities. has a huge appetite for mobile/digital services. which I describe as digital natives’. Notably. the number of millionaires in the Asia Pacific region is forecast to increase by 25 percent (compared to 17 percent worldwide). it also has a much greater desire to lead a Mobile Life. 21 percent of respondents would prefer to switch completely to direct banking. Driven by the advance of a tech-savvy consumer base and a ‘change of the guard’ that sees Generation X making way for Generation Y to take the helm. the demand for services — including banking. payments and commerce — will skyrocket. and this impressive income growth extends all the way up the social ladder. are interested in using digital channels in conjunction with bank branch visits. In fact. Accenture research found that 60 percent of mass affluent customers. particularly in Asia Pacific where a digital wave is creating a market hungry for mobile money services. Significantly. The outcome will be an increase in smartphone penetration. the youth segment in Asia Pacific is not only far greater in sheer numbers. Between 2010 and 2015. for e. real-time property guide Mobile as a conduit to build brand presence and integration into consumer’s daily lives Mobile wallet (Stored value account) mCommerce White space represents the untapped opportunities as a result of new business and/or operating models Figure 1: Based on data from www. As more people embrace a Mobile Life.Four mobility value segments for banks m-Salary m-Allowances m-Claims Mobile as a platform to improve bank’s operational efficiency Mobility transformed banking processes m-salesforce Competition is Another 70 million households are expected to join this burgeoning class by 2015. with an estimated 450 million NFC-capable devices expected to hit the market over the next three years.g. The region is not only growing richer.aspx 24 .

In this scenario I have the option to open up a family wallet. or perhaps separate wallets for my wife and daughter. Let’s say I use my mobile wallet. this is a new retail experience that only mobile can deliver. The additional mobile wallets allow us all to conduct commerce without cash or cards. a space where banks and merchants have an important role to play. This segment carries a mobile phone and is already well accustomed to using mobile banking services to check balances. However. What’s more. A few days later I walk into a shopping mall in a different city. clever banks are also taking advantage of the opportunity to provide me additional wallets for family members. Together they must build on the mobile wallet. for which I also receive some loyalty points as part of the transaction. for example. I am still the account holder. The result is a virtuous cycle benefitting the bank. but I do receive a push notification directly to my mobile phone that says “Hi Pradip. provided by my bank. In practice I can transfer money from my account to a mobile wallet. I don’t know this. a product banks first provided to make P2P payments. if you are nearby and walk into our store. For the merchant it’s a win-win all around. the merchant now has a deeper relationship with the consumer. pay bills and make P2P transactions. the merchant and the ‘less cash’ consumer. First. They get their money up front and without having to pay the fee to the credit card company. From the perspective of the bank the mobile wallet currently sits outside the core banking system. where the same chain just happens to have an outlet. one that allows them to grant loyalty points and thereby encourage a return visit or purchase. But banks are not alone. The beauty of this is that this channel allows the consumer to pay from a mobile wallet and not a credit card. The next step is full mobile commerce. to do some shopping and buy some clothes at Store X. let’s examine how mobile banking services have evolved across the region. Dramatic economic growth and rising household incomes across the region have created a market of mass affluent. so we are happy. It can’t be done with any other channel because there is no other channel I have on my person at all times. 26 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 27 . The merchant also benefits for the reasons I mentioned. even during shopping and — more importantly — no other channel can deliver location-based services coupled with deep customer insight. which means the merchant does not have to pay the 2-3 percent charge to the credit card company. but the bank has now gained two ‘new’ customers — my wife and daughter — and sees a two-fold increase in transactions and revenues. and extend that functionality to enable and enhance new retail experiences.Mobile commerce touch points Now that I have described the key market demographics and data points across the Asia Pacific region. we will give you a 10 percent discount on your next pair of jeans and you can use your loyalty points”. Now let’s look at this from the perspective of the store merchant.

it is important to stress that banks have a limited time to master the capabilities to deliver a full mobile commerce experience. Arab States High Income OECD Total 136 67 60 8 2.00pm > Adults who do not use formal financial services1 Millions of adults Percent of total adult population that is financially unserved > 7.aspx 28 FOOTNOTE 1.455 53 Figure 3: Based on data from Honohan. While it is beyond the scope of this article to discuss the Index and the factors. Asia and Latin America Millions of adults 9.30am > 9. Banks must adjust to this reality. that have important implications on a bank’s mobile commerce and wider mobility strategy.00am > 10.30pm > 7. 2008: Human Development Index: World Bank FOOTNOTE 1. Regional groupings based on UN Human Development Index Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 29 .00pm > Top up transport card/ mobile Pay for train ticket Gain access to office Transfer money to sister Pay for lunch Pay for Pay for coffee and groceries magazines Pay for taxi East Asia 876 59 South Asia Sub-Saharan Africa 612 58 The cycle continues Incoming transaction Outgoing transaction Transfer Security transaction 326 80 Latin America Central Asia and Eastern Europe 250 193 65 Figure 2: Based on data from Accenture Analysis 49 They are confronted by new entrants and competition from companies across the merging mobility value one that allows people — especially those ‘born digital’ — to do much more with the mobile phone they already reach for on every step of the consumer journey.A day in the life of a 'less-cash’ consumer society of the future Nearly all of the world’s financially unserved adults live in Africa. which is why Accenture has recently surveyed the Asia Pacific landscape and developed the Accenture APAC Banking Mobility Maturity Index1.30am > 12.30pm 3. such as banking access and mobile subscriptions. www.

Mobile operators that want to target the unbanked will not want to do it as single operators. as well as access financial products. The unbanked are not unbanked because they don’t work or earn money. or fail to earn a salary that covers the fee structure offered by most banks.40671/25. However. In many cases. it is possible to glimpse that future today. have a huge opportunity because their footprint allows them to facilitate remittances on a large scale. the unbanked have a particularly strong demand for mobile banking services that allows mobile money transfers within and across national borders.5 billion adults. it is a herculean task that not every bank can master. Malaysia and the Philippines. There is also a knock-on benefit for NGOs — and banks that choose to grasp the opportunity — to provide microfinance. as the balance shifts from cash to contactless payment. which first-mover banks such as Dutch-Bangla Bank in Bangladesh are meeting with mobile banking services that include airtime top-up. this progress also raises a question mark over the future role of banks in enabling commerce in unbanked markets. While many banks are no doubt defining the course of mobile commerce.9. utility payment and remittance — to name a few. cash-out. one that allows people — especially those ‘born digital’ — to do much more with the mobile phone. However. Clearly. and discourages small deposits. banks operating in Asia Pacific have a unique but fleeting opportunity to extend their reach across the entire socio-economic spectrum and position themselves at the heart of these ‘less cash’ consumer societies and retail value chains of the future. acting as the ambassadors of mobile commerce. the unbanked lack a residential address. meaning they do not use formal financial services to save or borrow. However. Interestingly. mobile allows economy of scale. where there is a large population of migrant workers. the role of mobile in these markets is to facilitate payments. In the view of Accenture. However. They prefer to focus on serving Unbanked opportunities While economic growth across Asia Pacific has been dramatic.pdf 30 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 31 . However. banks have the capabilities mix — and the corporate DNA. such as Bangladesh. Loans and credit extended to the poor will not only help improve their lives. These unbanked populations have quite basic needs. many banks are not able — or willing — to offer additional services to encourage commerce at the bottom of the pyramid. such as insurance. not all have the proper mindset for the task. Which value segments and audiences each bank pursues will depend on the opportunities available in their markets and their own ability to compete.Banks have a limited time to master the capabilities to deliver a full mobile commerce experience. are unbanked. Indonesia. that is the catch. increasing reach and lowering costs and allowing banks to generate revenues by serving a large volume of low income customers. Financial inclusion will also make it much easier for governments and NGOs (nongovernmental organizations) in developing markets to disperse aid and so push money to the mobile wallets of the poor. the GSMA reports1 that 2. www. such as Ooredoo. that will allow them to plan a secure and stable future. New mindset Significantly. just over half of world’s adult population. it has the powerful potential to transform entire economies. In markets such as China. Here the expectation is that the mobile wallet will evolve to drive financial inclusion by creating a mobile marketplace where the unbanked can buy goods and services. to extend their services to the world’s unbanked. Besides. They will want to do it as part of a kind of ecosystem so they can benefit from sharing infrastructure and best practices. the wealth created will increase overall GDP and inject new dynamism into local economies. In some regions. FOOTNOTE 1. this is also a space where mobile operators.

enabled by new technologies. will likely not be among the legends in the business. this rechargeable stored-value card can be used to pay for parking and fares on all modes of transport. launched by a local transit company joint venture to facilitate fare payment on the city’s mass transit system. Hong Kong’s Octopus card. and some are teaming up with card issuers. Although cash is unlikely to be eradicated completely in the foreseeable future. And we should not rule out the potential of new entrants to stake their turf in the And there other scenarios. are capitalizing on their strong presence in certain local markets. governments. such as Visa and MasterCard to offer NFC and mobile wallet services. Finally. Mobile operators are joining together. Put simply.the customers at the high-end with large deposits and high-end devices. At the other end of the spectrum e-money providers such as PayPal and Singapore-based NTS and Korea Smart Card Company. He charters new Mobility solution offerings and builds assets by cultivating an ecosystem of leading software vendors. The Octopus card has since spread its tentacles to capitalize on growing demand for contact-less payments in other areas of consumer life. including fast food restaurants and supermarkets. and is accepted by many retailers. challenges Driving mobile commerce requires the grit and the power to roll services out to a customer base of 100 million customers and more. it is quite probable that large organizations — such as mobile operators. Therefore. we begin to see a path that takes them from one ‘machine’ to another. 32 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 33 . Certainly. It also demands that the company undertaking this is not measured by the same KPIs applied to financial institutions. the banks. the gradual movement toward electronic currencies and virtual transactions is edging us ever closer to a ‘less-cash’ society for both consumers and industry. which provides T Money. but many will soon find themselves struggling to keep up. that are poised to move commerce to the realm of machines. For that transaction there doesn’t really have to be a full-fledged digital wallet. most banks are in the business of making money — and they have a huge learning curve to travel before they can serve the poorest of the poor. with the exception of those institutions dedicated to driving financial inclusion. Pradipto Pal is responsible for driving Accenture’s Mobility footprint in Asia across different industry groups and business functions. using the app from the relevant app store to purchase the item they see on TV using their mobile phone. New entrants. All indicators suggest Asia Pacific may be first to fully embrace Mobile Life. If we consider the interactions that lead those ‘born digital’ to an actual purchase. Today. is a good example. transport companies are also taking advantage of easy access to customers at the point of sale to offer mobile payment services. A typical scenario could look something like this: The digital native watches Smart TV. there only needs to be technology in the background that can ‘see’ the machineto-machine operation between the TV and the mobile phone and relate this to the customer and CRM. Now it is up to companies across this emerging ecosystem to adapt to the fast-paced nature of mobile technology and secure their position in this increasingly competitive mobility landscape. Banks may have dominated with banking and payment services. global mobile commerce space. NGOs or even large petroleum companies — will have the resolve to accept this challenge and drive the transformation of commerce.

little targeting Targeted offers based on spending history Targeted offers based on consumer behavior Multiple merchants Standard discounts. Practice Director. not just their spending with that merchant. with a hybrid system of cardlinked offers in the middle. Therefore. Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 35 Merchant-centric At the Money2020 Conference. The value of these incentives far exceeds what payment card issuers have traditionally been able to offer based on merchant payment card fees (typically 1 percent or less of the value of a purchase). As it happens. and even those minimal rewards have provoked a class-action lawsuit and major legislation. but are restricted in the same way that a direct merchant offer is. In our opinion.funded Multiple merchants Multiple merchants Mostly merchantfunded Merchantfunded Merchantfunded Merchant and manufacturer -funded Figure 1: Base on data from IDC Financial Insights. a merchant can offer a substantial discount in confidence that it will result in additional sales. 2013 From the merchant perspective. Therefore. and that it can track the return on its marketing investment. Standard exchange rates. there is a learning curve and switching costs that inhibit adoption. While mobile payments do have advantages over payment cards and cash. the simple replacement of a payment card with a phone does not provide enough value to persuade the average consumer to switch to mobile payments. “daily deals” programs such as Groupon and Living Social have already provided an example of the sort of incentive that merchants are willing to finance: a coupon worth 50 percent of the value of a purchase of a certain size.PART 1: Mobile Commerce: Mapping The Competitive Landscape Money 2020 And The Business Case For Mobile Payments: The Role Of Rewards by Aaron McPherson. consumers must have a powerful incentive to try the new technology. IDC Financial Insights The spectrum of rewards programs Bank-centric It soon became clear that most of these mobile payment schemes were dependent to one degree or another on merchantfunded offers to finance their operation.’ or (more generally) direct merchant offers and payment card usage rewards (also known as ‘earn and burn’ programs) is in the restrictions: direct offers are restricted both in which consumers receive them as well as how they can be used. living social) No issuer involvement . little targeting Variable exchange rates. Worldwide Payment Strategies. from person-to -person fund transfers to digital wallets that allow a mobile phone to be used in place of a payment card or cash. much of the discussion centered on various types of mobile payment schemes. 34 Figure 1 shows payment card usage rewards and direct merchant offers as two poles of a spectrum. “Earn and burn” “Offer malls” Card-linked offers “Daily deals” Loyalty programs Single issuer Single issuer Multiple card issuers. Limited merchant involvement issuer and merchant . little targeting Single merchant The crucial difference between ‘daily deals. with cosmetic customization Consumer portal (groupon. Card-linked offers are like traditional “earn and burn” programs in that they are associated with a particular payment card. financial institutions have data about overall spending patterns by their customers.

not just their spending with that merchant. so the programs have to be clearly documented and presented on an ‘opt-in’ basis. Reproduction is forbidden unless authorized. Conclusion Financial institutions need to more effectively leverage the consumer data that is locked in their debit and credit card products so that they can obtain new revenue streams and reduce their reliance on interchange and overdraft fees. Visit www. • Both sides see mobile payments as an opportunity to increase their influence over consumer purchasing behavior. and Go-to-Market services.idc-fi. transaction-based marketing requires that they redefine their customer relationship goals from ‘ownership’ to influence. and there are many competing programs with different terms and conditions. press releases. consulting. In addition. Adapted from “Business Strategy: The Strategic Opportunity in Transaction Marketing Programs” Copyright Notice The analyst opinion. since they do not have much experience with them. The more a financial institution increases its influence over its customer’s economic decisions. Aaron McPherson has led the global payments research program at IDC Financial Insights. while merchants worried about their data being used to generate competitive offers.The more a financial institution increases its influence over its customer’s economic decisions. the more it will secure its own position. Aaron writes and consults with clients on a wide array of subjects. from an offer syndication network). helping to offset the commoditization of business banking. the financial institution will gain more influence over the retailers and manufacturers with which it does business. Doing this will require a new willingness to actively partner with retailers to drive new business to their stores. there was considerable controversy about the cardlinked offers model. Benefits The main benefit of a card-linked offer for a card issuer is the additional revenue it can provide in the form of a commission from the merchant (or more accurately. Contact IDC Financial Insights at 508-620-5533 to request permission to quote or source IDC Financial Insights or for more information on IDC Financial Insights Executive Briefs. This allows more precise delivery of customer acquisition offers than is possible through direct mail or advertising. Since 2000. and perceive any increase in influence by one side as a loss of influence by the other. Overcoming these concerns will require both sides to proceed cautiously but deliberately in order to establish trust and a common understanding of the value of personal financial data. This revenue can not only offset legally-mandated reductions in overdraft and interchange revenue. or promotional materials requires prior written approval from IDC Financial Insights. • Merchants are still uncertain about the value of card-linked offers. Copyright 2013 IDC Financial Insights. but can provide funding to support mobile payment services. financial institutions feared reputational damage if a merchant failed to fulfill an to learn more about IDC Financial Insights subscription. for example. ests. From the merchant perspective. • Financial institutions are sensitive to charges that they are selling their customers’ financial data. Considerations At the Money2020 conference. financial institutions have data about overall spending patterns by their customers. card regulation and international payments. While financial institutions obviously do this today. Any IDC Financial Insights information that is to be used in advertising. and research results presented in this IDC Financial Insights Executive Brief are drawn directly from the more detailed studies published in IDC Financial Insights subscription services. and are anxious to prevent financial institutions from re-creating this situation in the mobile context. mobile and emerging payments. financial supply chain management. analysis. for several reasons: • Both financial institutions and merchants had concerns about their customers’ data being used in ways contrary to their inter- 36 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 37 . • Merchants believe that the current payment card system costs them more than it benefits them. the more it will secure its own position. including enterprise payments.

In some countries banking regulators’ insistence on the use of a second authentication mechanism (2FA). Some are releasing apps full of features and functionality to impress customers and achieve differentiation. other factors that drove. rural banks and the majority of microfinance institutions continued to offer rudimentary mobile banking services that leveraged the SMS channel. in some cases involving IVR callback. Requirements to leverage location-based services have grown substantially and it is not uncommon to see marketing campaigns emphasize the importance of social media integration. targeting the unbanked with mobile wallet solutions. and will continue to drive. That said. This mobile app phenomenon held true for leading financial institutions throughout the Latin American region. Mass market-focused financial institutions. and the penchant of mobile operators to dramatically increase the cost of SMS messages. and the bank taking it. banks’ interest in mobile apps include security considerations. Apart from the proliferation of smartphones. coupled with mobile network operators’ offers of compelling monthly plans. others are seeing the opportunity to develop a mobile app strategy as a chance to revamp their overall presence via the mobile channel. Director of Sales. strategies and offerings are becoming considerably more ambitious. Mobile Commerce. SAP As banks across the region are warming to mobile apps. it's clear that the endgame is about enabling financial services that harness mobile to deliver real benefits to all customers. Latin America. Gramaglia. No matter the approach. with smartphone apps emerging as the preferred channel for banks seeking to project a more sophisticated image. more so than targeting the unbanked populations. for SMS banking transactions caused financial institutions to appreciate the benefits associated with offering banking via the mobile app. 38 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 39 . such as Davivienda in Colombia and Caixa Econômica in Brazil.PART 1: Mobile Commerce: Mapping The Competitive Landscape Mobile Commerce And Financial Institutions In Latin America: An Evolving Ecosystem By Mary A. also proved to be the exception. the general lack of a viable USSD alternative. banks enthusiastically embraced smartphones’ inherent advantages despite the reality that a vast majority of the population still relies on feature phones with limited data capabilities. where it was treated as a priority. banks increasingly saw mobile apps as a way to drive mobile banking adoption and create differentiated brand and service offerings. And let’s not forget the vast populations of unbanked or under banked who do not have access to a smartphone. Due to the growing proliferation of both Android and iOS devices. Throughout 2012 mobility continued to be a key area of focus for financial institutions in Latin America. In fact.

This is due to regulation that does not permit virtual deposit of a physical instrument. but who are not existing bank customers. and receive. leading banks such as Brazil’s Banco Itau and Banco de Chile — who were at the forefront in deploying mobile banking apps — are now re-visiting their strategy around how applications can best be used to maintain differentiation and deal with escalating costs associated with realizing ambitious plans. during the past year Latin American banks increasingly sought to target corporate customers with enhanced. for the most part. or in parallel to. can still gain access to their funds via ATM networks. The mobile channel was originally seen as a means for reducing costs. Ambitious.S. With the mobile momentum continuing its push throughout the region we can expect a variety of trends to accelerate in the coming years. local providers (Redeban and Banelco. banks with significant physical presence are seeking to reinforce that differentiation through seamless integration with their mobile offerings. In the midst of all the attention given to the importance of a more sophisticated. In those countries such as Colombia and Argentina. 40 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 41 . have been absent in Latin America.Requirements to leverage location-based services have grown substantially and it is not uncommon to see marketing campaigns emphasize the importance of social media integration. Mobileapp-enabled person-to-person transfers leveraging consumers’ Facebook contacts are also gaining traction. respectively) will be challenged to remain relevant in increasingly competitive. service offerings are becoming considerably more ambitious. as banks continue to place significant emphasis on mobile apps. in which differentiation will be key. The reverse will also be true. In the card-less ATM cash-out option. and not because of a lack of interest on the part of either banks or consumers Different approaches gain traction With the widespread focus on mobile apps among many banks who had previously not emphasized the channel. mobile app environments.. and Mexico’s Elektra. While the majority of initiatives had the consumer in mind. In countries ranging from Costa Rica to Chile. where actual numbers of mobile users are quite low and banks find it hard to justify significant mobile app related expenditures and the ongoing effort required to maintain them. There are also those financial institutions affiliated with a strong retailer – such as Chile’s Banco Falabella and its sister department store chain Falabella. which shares the same corporate owner as Banco Azteca – that will re-imagine the mobile opportunity by leveraging these relationships to develop mobile commerce ecosystems that expand mobile banking offerings to include point-of-sale purchases and encourage customer loyalty. Internet banking offerings are being similarly re-examined. Despite the challenges. During 2012 it was not uncommon to see the region’s financial institutions launch Internet banking projects in conjunction with. Banks facing limited budgets and the possibility that their IT teams may not be able to manage increasingly sophisticated mobile offerings are expected to opt for SaaS solutions. Use of a hybrid container approach for application deployment has gained traction as banks seek out vendors with broad product offerings in an effort to control costs associated with customization. as a new way to help banks increase revenue through cross-selling products. with many banks convinced that superior mobile solutions will highlight deficiencies in their online presence. and only recently. integrated Internet banking and app-driven mobile solutions. app-focused mobile projects. app-driven presence. the mobile channel remains one that is not easily monetized. a popular feature in the U. interest is growing in enabling cardless cash-out at ATMs so that consumers who receive funds via P2P transfers. feature-rich offerings are being planned in multiple phases as banks try to quickly make available differentiated mobile apps they can steadily expand and improve upon. such as remote deposit capture. This will particularly be the case in the smaller countries of Central America. Many banks leverage the channel to crosssell new products and give consumers the opportunity to apply for. where outsourced mobile banking solutions are already in place. Requirements to leverage location-based services have grown substantially and it is not uncommon to see marketing campaigns emphasize the importance of social media integration. has come the realization for the region’s banks that. on-the-spot credit line increases. Some services.

Latin American countries largely remained an untouched “black spot” in the mobile money revolution. in particular. has been one of the last regions to get swept up by the mobile money phenomenon. Gramaglia is responsible for driving sales of the SAP’s mobile banking. For Brazil. Mexico is now poised to transform financial services through the new mobile accounts. Overall. Central and South America and the Caribbean. What is certain is that Latin American banks will increasingly perceive the mobile app as a key tool for reaching customers now and in the years to come. By Charmaine Oak. So it is really interesting to see the picture changing now.. when M-Pesa Kenya became the wallet that launched a 100 others. marketing and business development for a broad range of blue-chip companies that includes Lockheed Martin. China.S. Although Mexico has done much to bring down the costs of remittances from the U. LACA here refers to Latin America (all of the Americas south of the USA) and the Caribbean 42 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 43 . we analyze the similarities and contrasts. Mary A. and the Shift Thought Digital Money Series. Within this region. mobile payments and online banking solutions in Mexico. Mexico and Brazil are the two largest countries. While Brazil was the first country to introduce branchless banking on a large scale. with December 2012 marking the sixth consecutive month of reduction. FOOTNOTE 1. She has extensive international experience in both the telecom and financial services sectors and has worked in sales. integrated Internet banking and app-driven mobile solutions. Since 2007. Meanwhile Brazil. which are useful in understanding how digital money initiatives are unfolding in the region in 2013. Sprint International and Citibank. What is common though is that in both these countries digital money innovations stand poised to deliver value to mass markets and. The analysis is based on the continuously updated Digital Money SAGE knowledge base.PART 1: Mobile Commerce: Mapping The Competitive Landscape Digital Money Sweeps Mexico And Brazil While the majority of initiatives had the consumer in mind. size of actual and targeted market. Practice Lead. Shift Thought Latin America and the Caribbean region (LACA)1.S. mobility is likely to take different forms depending upon a bank’s level of ambition in the channel. though relatively unaffected by rising unemployment in the U. both classified as ’Advanced Emerging’. during the past year Latin American banks increasingly sought to target corporate customers with enhanced. desire for differentiation. small enterprises. and available budget.5 percent in 2012 as compared to 2011. domestic and regional money transfers are bigger drivers than in Mexico. which currently drive innovation and recovery around the world. Remittances fell by 1. In this article. does feel the pinch through the effect on its major trading partner. the financial crisis is now affecting the volumes. Digital Money..

Brazil is already feeling the pain of the mobile operators in developed countries. Brazil is a shining example. Access channels in Mexico and Brazil Key enablers Mexico has already achieved remarkable transformation in one area. This is significant as Mexico is the fourth largest recipient in the world. Figure 1 compares access channels available for outreach in each country. a lot of other countries are likely to follow with a cookie cutter approach based on these recent developments. Another key driver towards the transition to non-cash payments in Mexico comes from the Mexican Finance Ministry. over 66 percent were paid in 44 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 45 . the new mobile accounts that are allowed since mid-2012 are the key enablers that 255 Brazil 203 Mexico make this possible. This was achieved through remarkable collaboration with the U. so that a mere 1 percent are now paid in cash through Bolsa Familia. still has some 115 82 43 25 Population Banked Mobile Internet 91 92 Figure 1: Based on data from The Shift Thought Digital Money SAGE Over 2013. requiring all Opportunidades2 payments to be deposited direct to bank accounts by December 2012. Dollars that can be deposited in Mexican banks. in an attempt to control money laundering. Mexico. It managed to bring down the average cost of remittances from the U. this seems an incredible feat to expect. The driving force behind taking banking services to the masses is the remarkable ruling from Mexico’s Ministry of Finance. sought to be filled by the entry of large retailers.S. the social cash transfer scheme equivalent to Mexico’s Opportunidades. Considering that as recently as 2011. Mexico is poised to do the same with knock-on effects on both North and South. Nepal and many other countries in Asia Pacific are rapidly reducing the ‘leakage’ in reaching money to the poorer population. Looking south. as against US$11. however. and implementation of direct-to-account. having earlier achieved a transformation to non-cash payments.S. the change in the way remittances are disbursed in Mexico is tipping the balance from cash- to-cash operators to new entrants like Xoom. But even more transformative could be the next set of changes that unfold over 2013 and affect the way money is transferred domestically. in order to understand the need for digital money initiatives.What has been labeled as ‘elitist banking’ from foreign banks that dominate the financial services scene in Mexico leaves a gap. if Mexico does for its domestic money transfer what it did for the international remittances. and in the region. FOOTNOTE 1. Pakistan. Bangladesh.oportunidades. Also. Secretaría de Hacienda y Crédito Público de México (SHCP). However.95 from the U. World Bank Remittance Prices.57. towards Central and South America. www. This is by way of antimoney laundering (AML) regulations that restrict the amount of physical U. It is important to compare the access that markets in Mexico and Brazil have to channels and financial services. with mobile penetration reaching historic highs.S. Looking north.S. to Mexico to just US$5.gob. to Brazil1. Third quarter 2012 2. highly competitive services for migrant transfers. India.

Indicative market share .Mexico Nextel (NII) 4% Lusacell 4% Telcel (America Movil) 69% way to go to put a mobile into the hand of every person. what has been labeled as ‘elitist banking’ from foreign banks that dominate the financial services scene in Mexico leaves a gap. It has also put debit cards in the hands of lower income consumers. However. and to a lesser extent Telefónica. through the use of non-bank agents. Comparatively. Financial services with a new business model are now available from large retail groups that have set up banks in Mexico. not unlike the situation in the banking side.Brazil Others 0% Nextel (NII) 2% Nature of services So. One of the earliest to be announced was Transfer. however. Now Mexico aims to follow that path. has successfully used the banking correspondent route to create strong bank outreach and widespread availability of POS machines. could have economies of scale from existing top-up agreements to build new agent networks that may further skew their advantage in the marketplace. it is mobile that has the real potential in Mexico due to the paucity of Internet connections. There are also a number of initiatives underway to fill the gap left by a paucity of ATMs and POS. concern arises from the dominance of a few players. the need for the new mobile accounts in Mexico is there. But how fast will the services achieve traction? Do the new services have characteristics that can transcend long established business models of the providers and truly deliver value that attracts daily use? To answer this requires an analysis of the services as they unfold. Mexico has allowed banks to use agents. as can be seen in Figure 3. Brazil. mobile operators can be the agents for banks. Movistar (Telefonica) 23% Payments and ecosystems More importantly. it is clear that América Móvil owned Telcel. sought to be filled by the entry of large retailers. Since 2008 Figure 2: Based on data from the author Indicative market share . Banco Wal-Mart and Banco Azteca encourage people to bank-while-they-shop. the Brazil mobile market is much more evenly distributed between the top four players. While online payments have taken off in Brazil. From Figure 2. and since 2010. the joint venture launched in Oi (Telemar) 20% Vivo (Telefonica) 28% Claro (America Movil) 25% Telecom Italia (TIM) 25% Figure 3: Based on data from the author 46 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 47 .

and in the process of our continuous analysis of digital money initiatives covering more than 32 services around the world. become the ‘mobile accounts’ in Brazil. mobile and retail industries. América Móvil has stated ambitions of converting 9 percent of its base to mobile banking by 2012. Charmaine Oak brings a unique perspective. consumers stand to gain by getting more control when they manage them via their mobiles. This will supplement the debit card services currently offered with the low value accounts. one thing we at Shift Thought have learnt is that no two markets are alike. while implementing agency models already prevalent in Brazil. it seems the retail payments outreach in Mexico and Brazil could start to become more alike. loyalty offers and the creation of multiple revenue streams. bill payment. is also a dominant player in Latin America. in order to have a better chance of delivering appropriate services and staying relevant. branchless banking services can now be offered to support a range of services including money transfer. LogicaCMG (the pioneer in SMS) and Wipro a leading IT provider. When the world’s largest retailer is also a bank. as in the case of Mexican Banco Wal-Mart. there is no substitute for taking the time to understand each. having contributed to the global development of digital money through the leading money transfer company Western Union. Unsurprisingly then. the largest soft drinks manufacturer in Latin America. As prepaid cards 48 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 49 . It will offer an alternative approach to Paggo from Oi. The Telefónica Movistar brand has more than 100 million customers in 12 countries in Latin America. Altogether.Digital money innovations stand poised to deliver value to mass markets and. from the services rolled out in these two markets over 2013. and indeed the world. Mexico stands to benefit with more points of transaction. October 2011 by Citi Group and América Móvil. América Móvil. the brand announced in February 2012 for the Movistar-MasterCard initiative earlier announced in January 2011. The other significant joint venture is Wanda. there promises to be a great deal of learning for Latin America. small enterprises. ATMs and point of sale devices. In Brazil the joint venture targets 65 million Vivo customers with a mobile wallet. Through Telcel. Her area of expertise is in mapping opportunities in digital money and providing consulting services based on Shift Thought’s Digital Money SAGE technology. One of the most important of these is the launch in Mexico of mobile accounts by BBVA Bancomer and Coca-Cola Femsa. and this is where the retail sector comes in. which currently drive innovation and recovery around the world. through the Claro brand. Through the Coca-Cola chain store Oxxo. América Móvil controls close to 70 percent of the mobile connections in Mexico. prepaid mobile recharge and in-store payment. in terms of the history and ecosystem. Further advantage stems from the availability of better consumer insights. in particular. a relatively simple mobile credit card SMS-based payment service supported by an OTA downloadable SIM application. a global mobile operator (Orange FT). there are interesting partnerships developing involving players from the banking. a leading bank (Royal Bank of Scotland). But where there is a wallet there must be cash in-cash out agents. Ultimately. it adds a whole new dimension for offering value bundles to the consumer. The devil lies in the detail. What lies ahead? In the competition that is developing in each of the markets.

At the other end of the spectrum. 50 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 51 .PART 2: Banking In Developed Markets: Taking Charge Of Change PART 2: BANKING IN DEVELOPED MARKETS: TAKING CHARGE OF CHANGE Smart banks are winning customers by putting them in control of their experiences and the channels that deliver them. personalize service bundles and respect customers’ rising requirements for visibility into all their accounts on their terms. We bring together the key learnings offered by banks (RBS Citizens. banks are delighting customers and keeping them loyal by delivering services that deliver convenience and utility. Others are leveraging ordinary smartphone apps to achieve extraordinary results. Some banks are achieving this through advanced analytics that will allow them to enhance products. First Tennessee Bank) and industry authorities to provide guidance as you map a multi-channel strategy that removes friction and boosts engagement.

This is one of the key takeaways offered by the 13th annual Edelman Trust Barometer2. Mobile Commerce. industries and governments. does not resonate with the customer of today. trading. Fast forward. and now banks must work to rebuild trust. From the allegations of mortgage fraud at Deutsche Bank to news of rogue traders at UBS. (Re)build trust Addressing the requirement that customers have unique needs that merit attention also sends a strong signal that banks are resolved to serve their customers better. these empowered consumers are doing their banking whenever and wherever they want. current. or insurance account. Customers also have a desire for more visibility and more services. The power of control was with the bank. not individual needs. SAP Out with the old and in with the new. and Matthew 52 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 53 . In fact. and the shift of power has moved 360 degrees.000 respondents in 26 markets around the world. To make this transformation possible most Banks must change their operating model.PART 2: Banking In Developed Markets: Taking Charge Of Change Banks: Evolve. Innovate And Embrace ‘True Multichannel’ . and generate customer-centric insights through advanced analytics that will allow them to enhance products. especially after the financial crisis and the continuing issues we are seeing throughout Europe and other parts of the world FOOTNOTE 1. physical branch banking is in decline. This is critical at a time when trust in banks is at an all-time low. banks are seeing a clear shift from physical to digital 2. accepted bank fees and pricing driven by internal KPIs. Always-on. hardly a month in 2012 went by that the financial services was not rocked by scandal or a crisis in management. It will soon join 'one-size-fits-all' marketing and advertising on the scrapheap of outdated business models that have failed to accept today's hard truth: consumers want what they want the way they want it. Citibank has reported that 95 percent of all transactions for Citi in Asia occur outside a branch office1. SAP. and customers adapted their schedules to make visits only during banking hours. Or Be Left Behind By Simon Paris. which was all about pushing one-size-fits-all marketing and offers at customers. Increasingly. But it's not just about flexibility in how customers access information and advice. Customers also want visibility into all their accounts. The industry's reputation has suffered. a one-stop view into their finances that will allow them to make smarter decisions and manage their money whether it’s related to their saving. personalize service bundles and respect customers' rising requirements for visibility into all their accounts on their terms. In decades past banks were in quite an enviable position. The 'old school'. What can banks do to regain their footing and restore trust? While there are no simple answers here. The report. so the 'new school' is about winning these customers by giving them control of their experiences 24/7/365 days through the channels of their choice. It’s the customer that now has all the power and access to technology. and customers are increasingly in control. www. It's a demand banks must meet to remain truly relevant in the 21st century. Senior Vice President. Global Head of Financial Services Industries.edelman. Specifically. As a result of this power shift and the fact banks are being forced to service customers at a lower cost. the Trust Barometer stresses that all industries and governments face the same task and suggests that 'trust building' attributes are clustered around actions that encourage engagement.theasianbanker. Customers avoided switching banks because they had limited access to which products were on offer with the competition unless they actually visited those banks. measures public trust in institutions. the Trust Barometer shows a steep decline in trust in banks from 56 percent in 2008 to 45 percent in 2013. alwaysconnected. based on a survey of more than 31. www.

It results in a fragmented and inconsistent view of the customer across products and lines of business. leaves the door open to new entrants and online giants. and they do not have ‘legacy’ systems to weigh them down. ATMs. Voice. aimed at piecing together the clues customers leave behind across all channels (profiles. adding mobile as just another digital channel. banks have jumped on the mobile app bandwagon. acknowledging customer feedback (positive and negative) via social media and offering solutions that help customers in planning their financial futures are items that top the agenda for banks in both developed and developing markets. In many cases we have observed first-hand. PCs. It is not about implementing silo solutions that allow customers to conduct banking regardless of their preferred platform. and encourage consumers to invest more of their wallet Clearly. there is no underlying platform in place to give banks a consistent user interface or 360-degree view of the customer and products across all platforms. preferences. Many CEOs today talk about ‘customer centricity’ as a key focus. 54 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 55 . underestimating the need for customer data to be accessible and integrated through all channels may ultimately cost banks competitive advantage. Apple. building the right backbone and capabilities to enable multi-channel banking is key. browsing patterns). personal navigation devices. games consoles — and the list goes on. Facebook and Amazon are just a few of the companies moving full-speed ahead on aggressive customercentric strategies. develop a single view of the customer and drive commerce with personal and relevant offers. tablets. rather than take the necessary steps to integrate all channels. which they cannot continue to justify or support. Banks must not only implement new channels. And there are other payment companies and mobile operators that also aspire to take a bigger chunk of the wallet. While some banks have built bespoke applications and platforms that enable banking and other extremely valuable services using technology like location-based services. in the short term. Success means a true multichannel architecture that also provides a consistent 360-degree view of the customer and the various lines of business. mobile phones. Banks must be more customer-centric and trade-in their outdated product-oriented processes and legacy systems for holistic approaches that address individual needs.Breaking barriers Listening to (and responding to) customer needs. This approach may bring the customer in. past purchases. especially as many banks are restricted in what they can change in the core due to the cost and ‘heart surgery’ involved. smartphones. For one Asia-based bank this approach is now costing it tens of millions of dollars to just support the release of new mobile applications! What’s worse. but they must also develop solid cross product integration to achieve consistency across all customer touch points. Google. Their decision to build on top of the legacy systems. Our experience shows this is a flawed approach that breeds yet more siloed channels and adds additional costs and strain to the banks. but it does not address the problem at its roots. mobile apps.

the digital channel is critical for its future. integrated view of the customer across all channels. including ANZ. is one of the most innovative banks in the world. This change though is not just evident in developed markets. many banks are now seeing the opportunity ahead. banks are very well equipped to deliver customers more relevant (hence valuable) bundles of products and services provided they take steps to become the authoritative source of consistent customer data across all channels. of course — builds a robust and sustainable business ecosystem. a country with a population of 160 million and a mobile penetration rate of just around 60 percent. In today's increasingly customer-centric world this outdated approach short changes both customers and banks. hundreds of kilometers from the nearest physical bank. DBBL's suite of mobile banking services use a technology platform that it currently operates as a separate platform from its core banking system. Some 87 percent of the population in Bangladesh. Ironically. do not have ‘official’ bank accounts. in the form of microfinance. and encourage consumers to invest more of their wallet. We are seeing this with some of the Tier 1 banks in Australia. From coupons and vouchers. ATMs. is centered on a multichannel approach. Standard Bank is pushing the boundaries around customer centricity by embracing multichannel. From offering customers remote account opening in the field. Determined to drive financial inclusion DBBL made the decision to harness mobile. the channel the unbanked have made an integral part of their lives. as well as in banks across North America and Europe. In the more developed markets banks increasingly see multichannel as an essential step in a wider strategy to add value (and encourage loyalty) by providing offers that are completely aligned with the needs of key customer segments. Standard Bank in South Africa.000 to 6. one of our core banking partners. These customers have deposited more than $7. The goal is to use these insights to extend lending services. Research shows that consumers demand a single view into their accounts — and every aspect of their relationship with the bank — across all channels. It's a critical next step as the mobile phone morphs into a mobile wallet to ultimately become everyone's new portable and personal point-of-sale. The ability to move from a one to 1000 offer to customer to a 1:1 offer can become reality with the right architecture in place. Europe and Australia are adopting customer-centric models that allow them to forge a new value web with them at the center. not the legacy core banking system. It's all about winning the race to power payments and commerce.000 new customers joining per day. In early 2012.2 million new customers with 5.75 million using the mobile banking platform. In a country where over 85 percent of the population has a mobile phone. it is also happening in developing markets like South Africa and Bangladesh. Bright spots Fortunately. to location -based services and proximity payments. Another customer Dutch-Bangla Bank Limited (DBBL) is among the pioneers in mobile innovation. Sharing this information with merchants and other players — adhering to personal privacy laws.Banks must be more customer-centric and trade in their outdated product-oriented processes and legacy systems for holistic approaches that address individual needs. armed with comprehensive strategies that harness multi-channel banking to satisfy customers and grow their business. This demand 56 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 57 . However. We are seeing first-hand how many of our customers like ATB Financial and CIMB in Canada and RBS Citizens Bank in North America look to use digital channels for new services like QR code payments. Break away The evolution of banking mirrors the evolution of technology. a position they can claim because they have begun to use analytics to gain deeper customer insights across all channels. banks are taking advantage of advances in technology to deliver on the promise of one-to-one marketing. to creative services like ‘funeral plans’. remote check deposit and location-based services. The growth they have seen around ‘Inclusive Banking’ To this end banks in North America. DBBL launched a suite of mobile banking services — and 12 months later — it counted more than 1. there are plans underway to link these systems to enable a single. and the Commonwealth Bank of Australia. IVR. They are competing smart. to the unbanked and the underbanked. the Internet and now mobile banking — each channel was implemented as part of a wider strategy to improve customer access to products.

sheds some interesting light on what customers expect — even demand — from their banks. Among the findings: approximately two-thirds of businesses would be at least “somewhat likely” to perform basic transactions over corporate mobile banking services in the next 12 months. Head of Product Delivery. that today covers more than 5. Fast forward. combined with the results of focus group research conducted on behalf of RBS Citizens. the Aite group found that over half (56 percent) of survey participants expressed interest in performing more advanced functions. he was based in Beijing and Sydney. will only grow as consumers embrace digital channels to pay bills. online banking. This is why RBS Citizens has purposely chosen a solid approach to mobile banking that streamlines important decision -making and removes the friction from moving money. Matthew Talbot is responsible for mobile banking. enabling a single and consistent view into customer data on multiple channels not only satisfies customers. conduct the arrival of the digital channel being led by mobile and the emergence of the empowered consumer have come together to create a new urgency for new models. enhance products. Removing Friction To Build Relationships By Scott Manley. Banks must tear down the silos and replace their product-driven mindset with a singular and sincere focus on the customer. Channel Treasury Solutions. including a string of surveys conducted by the Aite Group. refine pricing and improve CRM. Simon Paris leads SAP's end-to-end footprint in the Financial Services Industries. where he played a key role in developing the company’s mobile commerce initiative.. RBS Citizens Business school dogma may dictate that companies must consistently exceed customer expectations to beat the competition. consistent view of their financial services? Let's just say that the barriers to switching banks (or moving to a new entrant that offers a helpful and more holistic view of consumers' transactions) will be quite low. "There is nothing more powerful than an idea whose time has come.PART 2: Banking In Developed Markets: Taking Charge Of Change It's all about winning the race to power payments and commerce. SVP. such as approving transactions and initiating payments. and these observations. Previously. Evolve or get left behind. Talbot joined SAP in 2004 via the acquisition of Sybase Inc. For example.aspx?recordItemID=719 58 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 59 . as CEO of Mobile Internet Group." After decades of building on top of legacy systems. a strong business case for mobile corporate banking services exists. More importantly. But. turn that statement on its head. and research. a Wireless Application Service Provider and publisher. Will customers vote with their feet if banks fail to offer them a single. purchase transport tickets and manage their daily lives. For banks. But studies show that delivering simple convenience — not bells and whistles — results in satisfied customers and lasting loyalty. Research suggests that mobile corporate banking is in its infancy. It also paves the way for them to generate additional sales.aitegroup. and it’s clear that there is also a first-mover advantage for banks that deliver the services customers appreciate — and use — the most. mobile consumer payments and mobile inclusive banking. Previously. underlines the importance of delivering mobile corporate banking FOOTNOTE 1 www.700 customers. Paris served as vice president at HP. Indeed. French writer Victor Hugo once famously said. where he was responsible for the P&L of a US$17 billion division. It’s time for true multichannel platforms. a survey of 300+ treasury executives conducted by the Aite Group highlights key requirements that are just as pertinent today as they were when the research firm published them1 in 2010. while 42 percent described themselves as ‘likely’ or ‘very likely’ to do so.

a mobile corporate banking offer catering to the needs of commercial customers. which we offer customers free of additional charge. It currently exists as an iPhone application. is to deepen the customer relationship thus keeping existing customers loyal. However. Convenience pays dividends But it’s the customer. make transfers and check balances. It’s a seismic shift that we have observed over just the last 12 months. which is why RBS Citizens launched accessMOBILE in 2010. Of course. an increasing number of corporations. showing that shipments have more than tripled. Put simply. as well as a Web browser experience that works for both Android and iPhone users. our target audience for mobile banking services. ranging from small businesses to large corporations. At RBS Citizens we know that the majority of our online customers who use corporate banking services are cash management professionals that are in front of their PC from 8 to 5 Monday through Friday. not advances in technology. serving as what we like to call the ‘North Star’ for RBS Citizens’ mobile banking offerings. What to offer via mobile? How likely would your business be to consider making the following types of business Check bank account balance Make internal bank funds transfers Pay bills Approve debit or credit transactions Make expedited payments Make transfers between external bank accounts Approve wires Capture and send check images for remote check deposit using mobile device camera View and make pay/no-pay decisions on positive pay exceptions Approve payroll batches and other ACH payments Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider Already do this Definitely/probably would consider 2009 13% 24% 5% 22% 5% 21% 2% 22% 1% 22% 2% 18% 1% 17% 2% 15% 1% 15% 1% 13% 2011 33% 31% 26% 28% 29% 26% 17% 32% 19% 33% 15% 31% 14% 26% 13% 37% 12% 32% 15% 23% services that allow decision-makers to get more done faster using the smartphones and connected devices that have already become part of their daily routine. the meteoric rise of tablets has also had an impact on the mobile roadmap. mobile plays a central role. and clearly one that will continue to impact the banking business. Research documents the massive increase in tablet sales.The purpose of these mobile banking services. have started to issue their executives iPads and tablet devices. In the next phase there are plans to offer an Android app. that guide strategy. And it’s this singular focus on the customer that confirms we deliver real value when we provide mobile banking services that remove friction and boost efficiency. Against this backdrop. Figure 1: Based on data from Aite Group study “The ROI of Small-Business Mobile Banking” 2009 and 2011 60 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 61 . Mobile explodes Obviously. Small business owners are also large users of tablets using them for everything from administrative tasks to cash registers. allowing customers to approve wires. an approach aimed at merely replicating online services is sure to fail.

That’s why we plan to add additional functionality to accessMOBILE allowing customers to initiate wires by filling in a template on their mobile device. The scenario is familiar. praising the convenience and speed. As fraud continues to rise in the commercial space. and our service lets the customer accomplish the same task in two clicks. our mindset is the exact opposite from what it would be if we were offering a consumer service like news or entertainment. and from checking this against the majority of calls received through customer care services. They are under pressure to do more with less. which we offer customers free of additional charge. Success is all about creating efficiency and respecting customers’ time. They don’t want or need a month’s worth of data to do reconciliation. are positive about our services. If a competitor service allows customers to conduct business in five minutes. Focus group research reveals that roughly 95 percent of our customers do most of their cash management from their desks. There the endgame is all about finding ways to extend the time people spend on a Website or interact with an app.the majority of our mobile customers are small-business owners. then chances are customers are going to do their banking business with us. We know from asking customers. the decision -makers and the small-business owners wearing a bunch of hats. and is contacted to approve a wire in order to get a payment through. They want to approve wires on the move and make decisions on positive pay. It’s the remaining five percent. and clearly one that will continue to impact the banking business. In mobile banking speed is everything. while the latter wants to make sure they have the appropriate oversight to keep things moving while they’re on the move. but the service will allow customers to be the second approver on changes to users within our systems. A business owner is on the road. is to deepen the customer relationship thus keeping existing customers loyal. Customers. 62 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 63 . It also won’t be possible for customers to change or authorize users via mobile. treasurers. As Head of Product. online and mobile technologies. It’s a seismic shift that we have observed over just the last 12 months. secure messaging. but they will be able to initiate this from a template. We focus our efforts on making sure the services we offer are faster and easier than those of our competitors. He focuses on revenue generating and process enhancement initiatives as they relate to Treasury Management solutions including file transfer. After all. particularly small-business owners. or on vacation. that is the ‘wow’ factor about mobile corporate banking services that impresses our customers the most. that this is where mobile must be harnessed to streamline the process. At RBS Citizens the goal is to get customers in and out of the service fast. and mobile banking services that can reduce complexity and remove friction are a huge advantage when it comes to building relationships and driving lasting loyalty. Significantly. CFOs and other executives appreciate having the oversight and ability to approve transactions while on the go. and Customer Relationship Management. who need mobile services to move the money. The former group is the one that delves into the details and handles daily operations. managers on the move and time-strapped executives that are everywhere but in front of their PC. Positive impact The purpose of these mobile banking services. Scott Manley is involved in the conceptualization and implementation of emerging technologies and solutions for commercial customers. this is a customer segment that is time-strapped and short on resources. Ironically. Due to concerns about security and risk our customers will not be able to do freeform wires via mobile.

The single solution approach has been primarily focused on online banking.) would be served up to the device/OS and modality selected by the user. The digital world is moving at light speed. ACH. others that serve small business and corporate online. Research Director. These challenges are being compounded by the range of devices (tablets. computers) and operating systems. it’s even more challenging. An ideal scenario would be for the bank to be able to house all of its electronic banking One Solution to Rule Them All? components in a single place. users simply expect to pick up any device and have the appropriate experience. At the end of the day. Online and mobile banking vendors have already begun to consolidate in the consumer space. banks can decide to build an iPhone app. small business. there are solutions that serve retail and small business online.) and providing packaged access to the modules to the various segments (see Figure 2). the consumer may want to use to bank. and finally. This is the future of electronic banking. If this development is done in a siloed manner. 64 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 65 . Financial institutions and the software vendors that serve them need to come up with a more holistic approach. Interchangeable modules (bill payment. Furthermore. refresh the Web experience. along with a properly skinned front end. it is becoming very difficult to manage. For a number of years. This is done by exposing individual modules of functionality (bill payment. Convergence goes well beyond front end online and mobile banking solutions. and has taken on several complex forms over the years (depending on the vendor and its strategy). wires. wire transfers. some that have attempted to conquer consumer. The burden is on the bank to provide it. etc. it will cost the bank a fortune. a group of software vendors have been working on creating a single electronic banking solution. build an Android app. smartphones. The shift to a device agnostic electronic banking platform is a critical and complex input to a single solution approach. Tablets will become a natural extension of their solution capabilities. They will continue to join forces in the form of acquisition. Celent Users are oblivious to the challenges banks have in getting digital banking up to the speed of the Web. For example. Sure. It requires a common middle layer with business logic and messaging infrastructure. these changes will have profound implications for the vendor community and the financial institutions that rely upon them. This solution could serve multiple market segments. and then build something for the tablet. Vendors with existing online and mobile portfolios will invest in bringing them together. It’s certainly challenging to build a single solution. etc. and absolutely critical. to fine tune a segmentcustomized front end.PART 2: Banking In Developed Markets: Taking Charge Of Change The Convergence Of Mobile And Online Banking By Jacob Jegher. though this is bound to change given the criticality of mobile banking. and corporate online. and it will take several years to get there. and as banks bolt on additional channel capabilities (such as mobile).

As such it may not be possible to get the heads of retail online.Digital banking must be device-agnostic while providing a tailored experience One solution to rule them all? Retail online banking Module A Returning users: Log on User ID JohnQPublic Module A Full solution Module B Electronic banking platform Module B Small business online banking Module C Electronic banking platform Password ******** Remember my User ID Forgot user ID password? Module C Bite sized Module D Module D Corporate online banking/ cash management Selective/full Figure 1: Based on data from Celent Figure 2: Based on data from Celent Is it really possible to have one solution to rule them all? Are banks interested in this kind of approach? The answer is not cutand-dried. • Technology hurdles. financial institutions. Large banks are typically very siloed. It requires a great deal of investment and tech prowess to accomplish this. 66 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 67 . are gravitating towards single solutions. This should invite scrutiny from financial institutions. Some of the software vendors that have gone this route have spent years on this approach and still have not completed their builds. and clients aren’t as segmented. Even if the meeting does take place. There are a few key challenges here: Political battles. where responsibilities. which group or groups will fund the project? Which group and individual will lead and own the project? This is a totally different story at small banks. small business online. particularly smaller ones. However. teams. and cash management online together at the table to explore this.

convenient. But rather than try to teach seasoned executives new mobile tech tricks. social media. are often constrained by a lack of time and resources. small business. First Tennessee Bank • User experience chaos. there’s one very solid factor driving the interest—cost. do small businesses even know what ACH is? Many don’t. it will cost the bank a fortune. It’s important that banks harness technology but don’t always use it as their best foot forward. they are. corporate cash management) and is a recognized thought leader in this space. For one. and financial technology startups In today’s world. nor should they have to care. 68 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 69 . and small-businesses. Large enterprises frequently struggle with a thousand tiny threads of hierarchy that impact their speed and agility. Challenges aside. not the technology. He heads up Celent’s online banking research (consumer. we chose to put the customer experience first. Should the same user interface to the shared ACH module be provided to large corporations and small businesses? For example. Different-size businesses will have different requirements but could access the same technology.PART 2: Banking In Developed Markets: Taking Charge Of Change Breaking The Mobile Banking Mold If this development is done in a siloed manner. agile execution is crucial. Tight IT budgets are pushing banks in this direction. and absolutely critical. allowing their management to make key decisions. it’s even more challenging. It has never been easy for companies to be nimble. Purchasing and maintaining one solution as opposed to two or three solutions can certainly be attractive. personal financial management. By Taylor J. “Gosh. First Tennessee Bank has developed a hybrid approach to mobile corporate banking that builds on the familiar online experience to deliver impressive results. The problems creep up on the front end. It’s easy to get caught up in the array of sexy tools and devices on the market. Vaughan. Our small-business customers are people before they are professionals and have no doubt already been exposed to consumer-facing services through family members. Director of Treasury Management Services. Recent research has focused on next-generation online and mobile banking. Understanding that small business owners must wear several hats. Jacob Jegher is a Research Director within Celent’s banking group. The small-business owner sees this and says. to fine tune a segment-customized front end. Ironically. It’s certainly challenging to build a single solution. If you look at consumer banking services. albeit at the cost of user experience. for the most part. flexible and easy to use. They also require mobile banking services that can keep the pace. Jegher’s research focuses on emerging technologies and business strategies in retail and wholesale banking. friends or via the media. First Tennessee Bank made the conscious decision to launch a mobile corporate banking service that equipped this customer segment to get more done faster. it was what we chose not to do that has made the service a success. But companies aren’t the only ones under pressure to adapt to market shifts quickly. forced to do more with less. conduct transactions and embrace opportunity as it happens. The convergence of mobile and online solutions is inevitable and comes with a tremendous amount of complexity. why can’t I do all my mobile banking for my business the same way?” Our answer is to offer a corporate banking service to meet the very basic — and human — need for simplicity and speed. but at the end of the day it’s the customer and their experience that matter most.

Account Reconciliation. rather than build a new mobile banking service from the ground up. didn’t exist. Demand Deposit Account System and Check Image Systems. came into place to deliver value to the bank and its customers. On the other hand.Free and easy We also chose not to charge the customer. With this in mind. As we expected. Some 18 months after launch and what was forecast for our corporate mobile banking offer is now fact. But. Instead we deployed a service that would practically pay for itself. as mentioned earlier. both retail and consumer. were still valid for the mobile banking offer. the small business owner is largely a one-man show. bolting onto the infrastructure we bought off the shelf. the cost to implement corporate banking services on top of this platform was very small because the need to build interfaces. we also knew that we would more likely see strong usage and rapid take-up of mobile banking services among small business customers. smaller businesses have been more nimble and willing to make the decision and adopt mobile corporate banking services. Therefore. In practice. we made sure that customers could use the same ID. among others — interfaces that took the team months to build and implement. Small businesses are faster on their feet because. we were able to get this service up and running in less than 6 months. we were also able to accelerate time-to-market. this is also the customer segment that can’t be charged for the new channel. The logic was simple: we didn’t think customers would appreciate having to take the effort to learn and internalize a different model of logging on to use the service. Fortunately. small business customers have more in common with consumers than corporate users. large companies are often constrained by very clear and protracted policies about how processes have to run. In many ways. 70 71 . By taking a more hybrid approach. Allowing some time for the customization that would transform what was essentially an online experience into a mobile one. the penetration percentage is still in the single digits — but growth momentum shows no signs of slowing. Familiarity boosts utility First Tennessee did not only get more value out of its existing online banking infrastructure -it also used the online service as a blueprint for the mobile offering. they have to be. we basically bolted our mobile banking offer onto the Corporate Online Banking tool from our existing vendor. rather than launch a totally new mobile service or app. After all. the interfaces that went to all the systems — Automated Clearing House. the same password. in many cases. a mindset that can slow adoption of new services because organizations have to change their own internal processes and policies first. To date. often the most expensive part of deploying services. While organizations generally have a team of financial analysts or a staff of accounts receivable clerks. Put simply. so the challenge for First Tennessee Bank was to deploy the service without high cost to do it. that also provides the platform for all our banking services. this is where the ability to build on the bank’s existing online banking back-end systems.

With our service. All we are doing is rendering different screens on the exact same security ramp. apps. telling their business colleagues about the benefits of doing business with a bank that truly understands the pressures of doing more. not the technology. customers know exactly what we are going to deposit in their accounts and what amounts are going to be available to them tomorrow. The result is a mobile optimized Website that looks and feels like an app. we also modified Lockbox. then customers do want to review it on their mobile phones. it was what we chose not to do that has made the service a success. they want to move money and they want to have secondary approval of transactions. processed or returned. customers can see an image of the check that we have called into question and they can make a decision directly on their mobile phone as to whether the check should be paid.Ironically. Go with the flow At this point. Finally. Web Rather than follow the lead of companies — including banks — racing to launch mobile 72 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 73 . not releasing a mobile app has allowed First Tennessee Bank to nip many security concerns in the bud. As a result. An example is Positive Pay. It’s something that requires a quick response from the customer because they only have a window of a few hours in the morning to let the bank know how to handle these suspicions transactions. allowing users to use touch to swipe. We know that our customers are already quite comfortable with the level of security offered by their online banking service. The tedious practice of creating the payroll file in the back office is a long and arduous process that customers don’t want to do on their mobile phones. faster and the proper role of mobile devices in the mix. a service that has been available in banking for years. We also see clear benefits when these satisfied customers become our advocates. However. They check their balance. allowing customers to review transactions that look suspicious to the bank because the customer did not notify the bank in the first place. Another area we addressed was fraud prevention. we chose to put the customer experience first. stretch and scroll. for example. But we also see opportunities to wield mobile to boost our own performance. and we don’t waste their time with services that emphasize technology for technology’s sake. So. But once that process is completed. another standard banking service that has been around for years. In practice. It’s easy to imagine a scenario where mobile can extend and enhance the entire sales cycle. We use the tools that help them do their business. see the amount and provide the secondary approval. and the same security profiles they were familiar with from the get-go. We achieved this by allowing customers to use their mobile phones to respond quickly in critical situations. insights that allow them to plan and execute important business decisions. mobilizing the basic functions our customers want and use most. we decided to buck the trend and design a mobile Web experience that emulated an app. Popular reports about mobile apps that collect and pass on personal data to third parties without asking consent first have turned consumers off on apps. which is why it’s also a perfect match with mobile. the business benefits of corporate mobile banking services are sharply focused on customer retention and reinforcing the position of First Tennessee Bank as a bank that is on the forefront. we collect their checks for them. make their deposits for them and make the totals for those daily deposits available on their mobile devices. For one. and small business customers are no different. Interestingly. What should the customer be able to do when they logged on? Again we followed the online model. The security profile is identical to the one they have on their PC. to cater to customers on the move. Right now it’s all about helping our customers to perform better. we made it possible for the customer to see the totals. and we simply remind them that the corporate mobile banking service uses the same technology. our service is the mobile Web version of what they know — and trust — from online. Apps vs. The customer doesn’t have the hassle of going into an app store and downloading the right apps and we at First Tennessee Bank have completely avoided the headaches and costs associated with supporting multiple device operating systems.

and providing a delivery date for equipment. Connectivity and connected devices are coming together to create more customer touch points and more distribution channels. people decide the channels they will use to interact with banks. People use a variety of channels every day. smartphones or channels within platforms) 27 times per hour. to sophisticated apps. With this tool the sales officer could hone in on the point the customer is not currently using a product and then show how many bank customers are using it. switch their attention between media platforms (TVs. But mobile also creates an opportunity for First Tennessee Bank to decrease costs. tablets. so-called Digital Natives. not the other way around. mobile has increased business velocity for our customers. increase customer loyalty and remove the friction from the flow that stands between the customer and the products they want. phones. The assumption may be that everyone is online. This tool would also trigger the back-office to move on the request. able to show. the results they achieve and conclude by doing the complete ROI analysis for the customer. By Davor Ebling. Consumers. such as scanners. FOOTNOTE 1. found that people who grew up with the Internet. tablets. in a way.B. to ATMs. It's a new multi-channel world where customers are in control.timeinc. readily switch between platforms and devices. The security profile is identical to the one they have on their PC. www. In this scenario a First Tennessee Bank sales officer goes with their tablet device to the customer. but. This is what we envision as the next step in our strategy. Taylor holds a B. forwarding a copy of the contract. switching back and forth between them frequently. not tell.php 74 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 75 . then the sales officer can use the same tool to seal the deal. Clearly. If the customer is sold on the product. anywhere access to their financial information via a multitude of channels and devices. making it necessary for them to do more. Inc. our service is the mobile Web version of what they know — and trust — from online. Accredited as a Certified Treasury Professional by the Association for Financial Professionals. and conducted by Innerscope Research. real-time visibility into all their accounts as they shop. already masters at multi-tasking. Here is a checklist to guide banks as they map out their multi-channel strategies. spend and save. but it's important to remember that everyone is not just online. or about every other minute. commissioned by Time. Taylor J.PART 2: Banking In Developed Markets: Taking Charge Of Change 6 Ways To Wring More Value Out Of Multi-Channel Banking However. Director.php?id=releases/time_inc_study_digital_natives. it’s also inevitable. A 2012 report titled "A Biometric Day in the Life"1.A. From simple IVR calls. They have the freedom and flexibility to choose how they interact with their banks. a customer the real benefits of our products. from the University of Hawaii and an M. ordering the scanners. It’s innovative. and expect anytime. tailoring their experiences to suit their needs. SAP Thanks to the proliferation of connected devices — PCs. Vaughan has been with First Tennessee Bank for 23 years and currently manages the Treasury Management product team.I. Mobile Commerce Solutions. magazines.S from Roosevelt University of Chicago. The pressure is now on the banks to adapt to this shift in consumer behavior and help their customers make 'smarter' decisions based on increased. start the DDA systems to feed the transaction data so there is no delay anywhere in the process. Smart TVs and games consoles — consumers across all demographics now share a common trait: they are empowered and they are always connected. sending a confirmation email to the customer. faster.

a new report from Javelin FOOTNOTE 1.javelinstrategy. the rise of the empowered and connected customer has FOOTNOTE created an "urgent need for the financial services industry to break free from the 1980s thinking about personal finance management (PFM) and redefine it for the mobile mass market of the 21st-century. reams of research show time-crunched. there are no easy answers.S.Accept that consumers want choice.pressRoomDetail Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 77 . From researching products. And a significant and growing group of consumers want 'all of the above'. customer preferences vary greatly. At the other end of the spectrum. How U. www. Fortunately. Based on this what customer experience can — and must — multi-channel banking deliver? Again." with nearly half of 1. When it comes to customer service. www. this demographic relies on mobile to access advice and make decisions. consumers "crave a way to view all their account balances in one place. others want to perform self-service tasks using a mobile app. Some want to speak with a call center agent.javelinstrategy. or an online channel.S. consumers want to view their account balances? Tier 1 View all account balances 49% Tier 2 Personal finance alerts 38% Urgent need What do today's always-on. 21st-century PFM for a mass audience: How to Build Everyday Online and Mobile PFM for example. to sharing reviews with their social network. slightly older consumers increasingly depend on their mobile phones to manage their daily lives.000 Strategy & Research. sheds some important light on the features U. a firm providing strategic insights and research in retail financial services. N=3. from August Nearly-Half-of-U-S-Consumers-Want-toView-All-Financial-Accounts-in-One-Place/ brochure/280 76 Comparison pricing 37% Tier 3 Card-reward recommendations 31% 0% 10% 20% 30% 40% 50% Percent of consumers Figure 1: Based on data data from Javelin Strategy & Research 2013. consumers would like to see most. to conducting transactions. As the report points out. and the flexibility to disengage and try another channel if one doesn’t deliver the results they want."1 Javelin further found that U. always-connected customers want from their banks? There’s no single best answer.

Facebook. Think creatively about how you can utilize the IVR channel to sign up customers for text banking for example. particularly when it comes to self-service. the pressure is on banks to start seeing multi-channel as a must-have feature. From experience. make sure the customer experience is consistent. for instance. #4 Optimize self-service. To make meaningful improvements you need to be clear about how you do things now and what you need to change moving forward. Here is a checklist of six key tips to help you develop your strategy to offer customers a truly seamless experience. Within five seconds the customer gets a text message welcoming them to text banking. even ATMs. If you have been putting off your foray into online or mobile. As I have pointed out. Delivering a connected. Javelin has also identified omni-channel banking in its list of Top Ten Trends for 2013. If consumers can’t accomplish what they want within an app. Therefore banks must offer a variety of channels to reach and delight customers. particularly when it comes to self-service. multi-channel is the next step in the evolution of banking. integrated. Customers that can accomplish what they set out to do will be more likely ‘Necessary not novel’ 'Ease of use' is the new business mantra here. a demographic weaned on the Internet. consistent experience in realtime is crucial. such as online or IVR. branded. in one place. #3 Be consistent. in-car navigation systems — to name a few (!) is also driving consumer demand for a single view into all their accounts. tablets.pressRoomDetail 78 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 79 . chat. the proliferation of screens — PC. Twitter. No matter the customer's preferred medium of communication. or introduce a new service to customers most likely to appreciate it. #1 Open your eyes. This also means accepting some hard truths in the process. Allow the customer to choose the channel they want to use to get the information or advice they need. be it e-mail. Branch traffic is on the decline. Customers will try a variety of channels to get things done. consistent experience in real-time is crucial. channel -optimized experience. be ready and be responsive. Selfservice is a great place to start if you want to remove friction and reap the rewards. harmonious. For banks this means bringing together all customer information across all channels to present customers one unified. and so enhance the quality of your brand. simply give the customer an option to provide their mobile phone number to sign up for a lower cost text banking channel. www. Be sure that your back-end system 'knows' about this interaction and notifies that banker to respond. accept that a further delay could cost your business customers. Just think of it as another screen and then capitalize on the time you have a captured audience to initiate a new process in just a few simple steps.javelinstrategy. smart TV. and optimized for the specific channel.1 Clearly. enabling customers to sign up for text banking while performing a financial transaction at the ATM. Present the newlywed customer standing in front of your ATM with a mortgage offer and the option to schedule a follow up call with a banker. consumers (49 percent) prioritizing this feature over all other PFM services. smartphone. Against this backdrop. their customers a single view into all their actions and aspects of their relationship with the bank. But transitioning to another channel often means starting all over again. mobile. flock to digital channels rather than make the trip to a physical office. then they want the flexibility to disengage and try another channel. Similarly. Your customer database will tell you when a customer has married or started a business (because they provided this information in the first place).Delivering a connected. you can use your ATM channel to promote text banking. an experience that will surely end up in increased customer dissatisfaction — and increased costs to the bank Significantly. Why not enable the callers to sign up for text banking via IVR? While in the IVR flow. No matter how you connect with your customers. we know that close to 80 percent of all IVR calls are simple requests to check available account balances. But how do you get there from or any other communication channels. and shows no signs of stopping as time-strapped Boomers and tech-savvy Millennials. in real-time. #2 Focus on the mix. because it's too complicated or too cumbersome. I am not alone in my view that banks need to take steps now to deliver FOOTNOTE 1. stating that financial institutions "need to change their perception of omni-channel banking" to see it as "necessary rather than novel". Be imaginative and you can inject new dynamism into all your channels.

so make sure to enable customers to start the process in one channel. notifications and enable customers to quickly check their account balances in every geography. a segment that cannot afford smartphones. What better way to stay in step with the breakneck pace of technology and the proliferation of channels and devices? to stay loyal. eCommerce and Payments Strategy with JPMorgan Chase. relevant and highly contextual. opening up new opportunities for you to market to your customers with increased precision and relevance. However. Realtime channel awareness is key. What's more. so better skip that channel for now. #6 Get personal. Clearly. #5 Offer real-time information. is prohibitively expensive. Keep in mind that customers can grow annoyed if their decision to transition to another channel forces them to start all over again. and fell short of this goal because the new channels worked independently of the old ones. for example. Davor Ebling has more than ten years of mobile industry experience.MYTHS Myth #1 Pursuing a multi-channel strategy in order to deliver on the promise of one-to-one marketing. Visibility reduces friction and drives positive results for everyone. even demand. They may love your app. The good news: the technology exists today to analyze huge amounts of data in real-time. Press and analyst reports document the hockey-stick growth of mobile banking as customers reach to their mobile phones to pay bills. Myth #2 Customers don't see the value in receiving personal offers. A raft of recent reports confirms that today's empowered consumers expect. 80 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 81 . make transfers and much more (!) And don't ignore the merits of text banking when you develop your mobile banking approach. There are vendors that can provide this solution right now. and they expect their bank to have a similar holistic view into them as individuals. My list of tips focuses on the steps you can follow to encourage loyalty and increase customer engagement. Davor was Vice President. Myth #3 Mobile banking is in its infancy. and then pick up where they left off in another. and has been focused on the Mobile Financial Services space for more than six years. or Precision Marketing. in real-time. people will even volunteer additional personal information if this guarantees them access to personalized offers that offer real benefit. The even better news: the reasons many of my clients list when they explain just why they can't start planning their multichannel strategy now don't hold up when we compare them to the reality around us. backend systems are often not realtime and process transactions in a batch mode. by hours or days. The impact on financial services will be nothing short of profound. But don't just add mobile apps to your arsenal of capabilities. is essential for banks to achieve and maintain high performance. To complicate matters. This is especially true for offers presented on the mobile device. Otherwise. Research shows customers want one view into their accounts. You also build a core set of capabilities to cross-sell and up-sell your products with increased chances of success because you can wield your data. Mobile. scan and deposit checks. Customers increasingly demand one view into their entire relationship with the bank. And the advance of cloud-based solutions means banks can 'plug in' to get the capabilities they need. It’s also one of the best ways to deliver alerts. so don't disappoint them. In my view. you won't have a complete picture of your customer — and they won't have one view into their relationship with you. Text is the primary channel for the worlds unbanked and underbanked. I know of pilots that started out with a great vision to deliver superior customer service. thus delivering relevant offers that are completely aligned with their lifestyles and life stages. but they will also appreciate an on-click feature from within the app that allows them to click to call the call center. to target individual customers with offers that are personal. the dizzying array of choices has created a new appetite for multi-channel banking. and the flexibility to disengage and try another channel if one doesn't deliver the results they want. Prior to joining SAP. relevant offers. There are significant business benefits if you revamp processes to provide a truly 360-degree view of your customer in real-time. thus not providing customers real visibility into their financial affairs. Anything else will be dismissed as spam. You don't just cut the time needed to provide a client a quote. Accept that consumers want choice. consumer surveys also found people lose patience if the offers are intrusive. the ability to cross-sell and up-sell to customers based on completely accurate and up-to-date information. Make sure your channels work together and share the information they collect in real-time.

Indonesia. PART 3: 82 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 83 .Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success BANKING IN DEVELOPING MARKETS: PLOTTING THE COURSE FOR FINANCIAL INCLUSION AND FINANCIAL SUCCESS Mobile banking is an essential component of enabling the developing world to maximize its demographic dividends. access to convenient mobile banking services that put them in control of their financial future. We examine the ambitious strategies banks in Pakistan. this is changing as the spread of mobile banking and payments transform entire economies by providing all people.5 billion people globally lack access to basic financial services. Fortunately. Bangladesh. Malaysia and elsewhere are pursuing to disrupt the market with a new model aimed at empowering people at the bottom of the pyramid to manage an interest-bearing bank account. We also highlight exciting activities at the other end of the spectrum. The GSMA estimates some 2. increase financial stability and achieve financial inclusion. including the poor and rural populations. where banks are targeting the next generation of tech-savvy customers and mass affluent with disruptive services tailored to their lifestyles and life stages.

The services offered may appear to be quite basic. Pakistan has made remarkable progress in recent years toward the goal of bringing the unbanked into the formal financial system. The activity level also showed growth. Just a few days later Askari Bank Limited. which established Waseela Bank for its branchless banking services. In Pakistan regulation permits only banks to offer banking services. in partnership with mobile operator Mobilink. transfer money to specified recipients anywhere in the country. together with the State Bank of Pakistan. FOOTNOTE 1. a mobile operator that established Tameer Bank. with 66 percent of those total accounts active at the end of the percent) in Level 0 accounts. Zong. Partner. the most basic accounts with low KYC requirements and small transaction limits catering perfectly to the needs of unbanked. In the case of TimePey. is truly transformational. has established important principles to assist in the creation of an enabling policy and regulatory environment to drive financial inclusion. has teamed up with Askari Bank to launch its mobile banking offer. In Pakistan regulation permits only banks to offer banking services. in partnership with mobile payments enabler Zong.Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Advancing New Frontiers For Financial Inclusion By Abbas Khan. The country’s continued efforts to establish an efficient and thriving banking system underlined the resolve of the State Bank of Pakistan to achieve its goal of financial inclusion and ‘Banking For All. launched a mobile banking service under the brand name TimePey. cash deposit and withdrawal. a requirement that has prompted mobile operators to acquire local banks. AbacusConsulting recounts recent developments in mobile banking and the impact on the local landscape. a major driver was the staggering rise (84. instead of establishing its own bank. a requirement that has prompted mobile operators to acquire local banks. reaching an impressive total of 1.’ Progress on all fronts. launched mobile banking services in Islamabad. In November 2012 Waseela Microfinance Bank Limited. Another factor driving this change is the fact that mobile operators and banks have stepped up the introduction of mobile banking services targeting the needs of the unbanked. In fact. an outcome that obviously enriches the socio-economic development of the entire country. include top-ups. Financial Sector Solutions. after posting 30 percent growth during the July-September 2012 period.8 million. Significantly. The next to make its move was Mobilink. offered under the brand ‘Mobicash’ . deposit and withdraw cash and carry out account transfers. which enables users to pay utility bills.pdf 84 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 85 . The first to market was Telenor. including the launch of several new mobile banking services targeting the country’s poor. fund transfer from account-to-account and person-to-person transfers. the quarterly report issued by the State Bank Of Pakistan for the period July -September 2012. but the fact that the unbanked can access them anywhere in the country using their mobile phones. www. utility bill payments. prompted the World Bank to recognize Pakistan as one of the fastest growing branchless banking markets in the world. AbacusConsulting 2012 was a milestone year for mobile banking services in Pakistan. The services.sbp.1 reveals that the number of mobile wallets increased by 25 percent. To accomplish this the Pakistan BranchlessBanking-Jul-Sep-2012.

Bill payment and mobile phone top-ups accounted for nearly half (45 percent) of transactions.309 1. Call for creative solutions However.September 2012 Figure 2: Based on data from The State Bank of Pakistan The report also details the growth in the number and value of transactions using m-wallets. The unbanked are obviously not 86 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 87 . it’s clear that education must be part of the solution. both new and old entrants are confronted by the same issue: a lack of customer awareness.287 +7% Habib Bank Level 2 48.June 2012 July .098 29.4 billion) have been conducted during the quarter ending September 2012 through branchless banking channels.079. more than 31. the numbers tell a positive story and underscore the growing acceptance of mobile banking by the mainstream market. Overall.954 +7% April . followed by P2P payments (38 percent).4 million transactions worth some 139 billion Rs (US$ 1.Status of mobile banking services in Pakistan Growth in m-wallet accounts Live • T  ameer offers Easypasia • U  BL offers OMNI • W  aseela Microfinance Bank offers Mobicash • A  skari Bank Limited offers TimePey Pilot Dubai Islamic Bank Will start pilot Meezan Bank Level 0 655.311 355. Specifically.704 +84% MCB Bank Level 1 1.012.436 -1% UBank Level 3 Figure 1: Based on data from AbacusConsulting 32. While there are no easy answers. They must therefore work together to encourage use of mobile wallet services and build more trust in mobile banking services.893 49.

Despite the significant growth in mobile banking.000 140.000 outlets (after 65 years of banking tradition) the number of branchless banking agents totals just over 32. It’s a new experience and players must come up with creative marketing strategies and financial literacy schemes that help customers understand and appreciate the benefits of mobile banking services.000. rather than store value.000 20. on their 88 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 89 .000 54% 53% 64% 66% 60. State Bank of Pakistan Value of transactions during the quarter (PKR in millions) No. thus growing the distribution network and outreach to the unbanked population. It would appear that customers prefer to store cash. Official numbers indicate the agent network is seriously under-utilized.092 +23% 20. State Bank of Pakistan accustomed to opening and using mobile accounts.304 +12% 139.000.000 Q4 2011 Q1 2012 Q2 2012 Q3 2013 Figure 3: Based on data from Development Finance Group.410 +30% 85.Share of active and inactive accounts As of end of a quarter Growth in number and value of transactions 120% 100% 80% 60% 40% 20% 0% Q4 2011 Q1 2012 Active accounts Q2 2012 Inactive accounts Q3 2012 46% 47% 36% 34% 160.000 115. there is also a heavy reliance among customers and not on over-the-counter (OTC) transactions which are predominantly P2P money transfers followed by a complete cash-out payment. driven by innovative delivery channels and products.000 5. of transactions during the quarter (in 000s) RHS Figure 4: Based on data from Development Finance Group.000 80.447 +21% 35.000 40. At these agent outlets customers can make deposits or withdrawals. with the average number of transactions per agent per quarter standing at 1.000 1000.597 +35% 25.000 15.011 +11% 20.000 79. Another focus must be on hiring and training agents. transfer funds or pay utility bills.000 25. While the brick-and-mortar retail network currently stands at around 11.366 +35% 31.000 30.000 10.272 +7% 28.000 120.

And radical change must be made in order to establish a complete and unified system of governance to allay concerns that Pakistan is unstable or unsafe. In fact. mobile solutions. pay bills. Numbers speak volumes Mobile technology is enabling the financial inclusion of the unbanked in Pakistan. borrow money and — ultimately — invest in their future. Of course. offer insurance or encourage commerce. not just finance and telecoms. SAP ERP solutions. Change is underway in the country and the impact is profound. providing them convenient and simple access to services that will allow them to buy goods and 90 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 91 . Clearly. mobile phones. allowing Pakistan to reach the stellar growth rates that have allowed its neighbors — China to the north and India to the south — to achieve and sustain remarkable growth. The realization is real and growing that mobile can transform all industries. Granted. a country with a population of over 190 million. there are hurdles to clear first. mobile banking services today focus on providing quite a basic suite of capabilities and are not yet progressed to enable investment. Abbas Khan is a Partner and Global Leader at Abacus. While the Pakistan economy is set to grow by 2 percent. e-Business and e-Government offerings. services. But there is no denying that it’s gold rush fever as banks and mobile operators step up investments and activities to launch services targeting the unbanked as well as a growing segment of the population that is willing and able to spend US$20 to US$40 on a smartphone device. The market for mobile banking services may be in an early stage. considered one of the best globally. it is clear that only mobile banking services will serve the financially excluded market. What’s more. All major players have mobile on their radar and I expect to see some 20-25 players active in the market in the next 3-5 years. Players must create an ecosystem that sees mobile operators cultivate relationships with verticals. suggests that mobile banking is just the start. However. the market for mobile money services on the whole is forecast to more than double. Pakistan’s regulatory environment for microfinance and branchless banking. provides ideal conditions for the advance of mobile banking. including finance. the real boost comes from market forces and the sheer determination of new and old entrants to stake and protect their turf. my experience as a consultant to all industries. my own conversations as a consultant with C-level executives confirm that the vast majority have placed mobile at the center of their services roadmap.It’s gold rush fever as banks and mobile operators step up investments and activities to launch services targeting the unbanked as well as a growing segment of the population that is willing and able to spend US$20 to US$40 on a smartphone device. but it is also poised for a new stage of growth and innovation. Significantly. rather than compete. He leads the Information Technology Solutions vertical and oversees a broad range of technology services including the firm’s outsourcing services portfolio. The players are therefore called upon to introduce new and creative approaches that can trigger a change in this customer behavior and so encourage unbanked to see their mobile wallets as instruments that allow them to save money and plan their financial futures. they confide to me that they fear they will be irrelevant if they don’t participate in this mobile revolution. increasing by 250 percent. If we consider that there are only 35 million traditional bank accounts and some 120 million mobile phone users. but the resolve to push the expansion of mobile banking services is strong.

sets out the strategies and action plans necessary to transform the Malaysian payment system into one that is highly efficient through more intensive use of mobile banking by 2020. In line with this mandate BNM has fostered the creation of a mobile banking and payments ecosystem. detailed in the ambitious Financial Sector Blueprint. the MasterCard Mobile Payments Readiness Index gives the country high marks. They are thus able to offer consumers costeffective mobile banking services. Indeed. A big part of the plan involves the widespread and rapid migration to electronic payments spearheaded by MyClear. people do show increased willingness to use their mobile devices for P2P payments. It is spearheading the transformation with the launch of MyMobile. Retail Payments Division. because the model is inclusive. This collaborative approach offers two key advantages. reduced complexity and a shorter time-to-market. high-income economy by 2020. a mobile banking services that cater to users with both feature phones and smartphone devices. Open and collaborative Importantly. not exclusive.Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Accelerating Mobile Banking Through Collaboration By Siek Kar Teck. MyClear is charged with hosting a nationwide mobile payment infrastructure platform. a wholly-owned subsidiary with a mission to spearhead the migration to mobile and achieve the objectives outlined in the Blueprint. where Bank Negara Malaysia. First. offering greater efficiency and convenience to consumers and businesses. government agencies and several major mobile operators.” While consumer adoption in Malaysia is not as high as it is in other countries. Director. increase financial stability and achieve financial inclusion. This vision. Mobile banking pilot It is our conviction that it is far better to allow the stakeholders share a platform. noting that Malaysia is well on its way to “building a solid foundation for mobile payments to flourish. supported by a solid regulatory framework and driven by advances in mobile penetration. The payment and settlement systems in Malaysia have evolved significantly over the years. which it extends to all banks and mobile operators in the country in order to drive the rapid deployment of mobile banking service. the BNM has also established MyClear (Malaysian Electronic Clearing Corporation Sdn. it ensures that all stakeholders share a common infrastructure and thus enjoy the benefits delivered by cost savings. is on a mission to transition Malaysia to a high value-added. In fact. the Malaysian Communications and Multimedia Commission (MCMC). the Malaysian Central Bank. the Malaysia Administrative Modernisation and Management Planning Unit. this is not the case in Malaysia. this approach unites the stakeholders in a focused effort to educate and empower consumers with the services. MyClear Mobile banking is an essential component of enabling the developing world to maximize its demographic dividends. Fortunately. and inextricably linked to the resolve of the Bank Negara Malaysia (BNM) to improve the overall efficiency of the payment system and provide meaningful cost savings and benefits to the entire economy. The momentum is significant. the Ministry of Finance. 92 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 93 . Second. issued by BNM. access to payment systems has broadened. In many countries the majority of households lack access to basic financial services.). skills and financial literacy to manage their personal wealth. a wholly-owned subsidiary of Bank Negara Malaysia. Bhd. one that enjoys the support of key stakeholders including financial institutions.

top up mobile accounts and transfer funds (mobile-tomobile) using the recipient’s mobile phone number. than to make the development and deployment of mobile banking services the responsibility of each individual bank. Kar Teck held a variety of positions in the credit card and prepaid card industry. fully hosted by MyClear. and not the recipient’s bank account details.We are in product development to target specific customer segments. Prior to his current role. many of whom live in rural areas and villages.000 live transactions have taken place. beginning with smartphone owners. Celcom and DiGi. a mass-market offer built from the ground up to appeal to all customers who own a mobile phone. e Debit. Smart move Following the success of the MyMobile services offer. However. Maxis. and three mobile operators. pay for their credit card accounts. We also have great results to report. This approach unites the stakeholders in a focused effort to educate and empower consumers with the services. pay bills for government services. regardless of the type of mobile phone they own. FPX and Direct Debit. Since USSD does not store information. Unstructured Supplementary Service Data 94 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 95 . where he is responsible for brand and marketing of products and services including MyMobile. Since starting the pilot in November 2011. Interbank GIRO. Among these is the ongoing pilot of mobile banking services called MyMobile involving three major Malaysian banks: Maybank. manage checks. To ensure that every customer. it was considered to be a more secure technology and one particularly well suited to offering mobile banking services for a mass market of consumers. it’s not just about offering a mobile app to provide the user experience smartphone users have come to expect and demand. MyMobile Smart is also the first important step in a larger strategy to encourage and enable mobile commerce. But we do not only believe there is great strength in numbers. we are in product development to target specific customer segments. an activity that is particularly well suited to smartphone platforms. To date there is a total of 38 million mobile phone accounts in the country. skills and financial literacy to manage their personal wealth.000 subscribers have registered with these banks and more than 355. FOOTNOTE 1. We also expect that this project will grow this year to include one more mobile operator and a few additional banks. Siek Kar Teck oversees Retail Payments Division for MyClear. CIMB Bank and Public Bank. a vast segment that MyClear is targeting. more than 65. beginning with smartphone owners. particularly when all players are united behind a common goal. can conduct mobile banking these pilot services use USSD1 a global communication technology that is used to send text between a mobile phone and an application program in the network. In practice MyMobile allows customers to check banking account balances and view transaction history.

To complicate local banks to embrace branchless matters. of the population or some 18 million Traditionally. think big These are early days for mobile companies and financial institutions in Pakistan who are at various stages in their mobile banking strategies. including the poor and rural At another level. also called inclusive bank. Currently the focus is on remittances and utility bill payments. This is unfortunate because. A lack the delivery of innovative banking of literacy and formal education makes this services to the country’s unbanked. With mobile penetration rates in Pakistan nearing 75 percent. the rapid market. remittances to date are limited to interbank and intrabank remittances. has encouraged with banking services. banks have lacked a clear people have a formal bank account. access to convenient mobile banking services that put services in Pakistan. which accounts for has historically remained below roughly 60 percent of the country’s total par compared to other countries population. 96 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 97 . is harnessing mobile a bank. uptake of mobile phones. allowing banks to offer services that have been specially priced and designed to target this population segment. It is determined to drive financial this is why building trust through frequent interaction. is so critical. at the same time. it has been a difficult one to address. the their savings are meaningful and could be country’s largest and oldest financial managed to their benefit if they approached institution. banks have been unable to serve the unbanked because the size of their individual deposits made it difficult to justify the operating and administrative costs associated with distributing financial services through a traditional branch banking model. Habib Bank Limited The penetration of formal financial trust services they do not know. which means money can either be transferred from location to location within a bank’s own office network.Habib Bank Limited. even though HBL .Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Mapping The Market For Financial Inclusion By Faiq Sadiq. where the World Bank estimates only 10 percent them in control of their financial future. this segment of the population. Head of Payment Services. ing. banking services. help build trust in mobile banking on the whole as customers make mobile banking an integral part of how they manage their lives. While this demographic. which At one level. or it can be transferred between two different banks operating within Pakistan. which is enabled by mobile inclusion by providing all people. are now in the hands of over 131 referred to as the unbanked. There are no international remittances in this bucket. These are two services that have wide appeal and. it is clear that there is a huge opportunity for banks to deliver services to the unbanked at significant cost savings. represents a huge potential in the region. into their mainstream channel. the unbanked often find it difficult banking. an even more daunting task. Mobile banking is just part of a larger portfolio of capabilities that would allow Pakistan to close the gap with other countries in the region and offer a blueprint for other countries around the world working to achieve a similar positive. This is where mobile technologies — as part of a larger Branchless Banking strategy — have come to play a transformational role in finance. To be clear. lacks familiarity million citizens. focus on Pakistan’s low-income population. However. Incidentally. Start small. many are overwhelmed by the technologies to do more than enable notion of walking into a bricks-and-mortar building and asking for assistance.

Of course. and have plans for a commercial launch in Q3 2013. To date Pakistan has made great strides. and the country as a whole. financial institutions. and the efforts of the entire financial services industry. It is a huge jump for the economy and. Obviously. and the country as a whole. the mobile operators chose not to provide banks the USSD channel for the delivery of mobile banking services to mass market feature phones. At its core. at affordable prices. informed decisions about their financial future. which we did not brand or market actively. the interest — even eagerness — of people everywhere to use mobile banking and payment services can be seen as a first step that will allow Pakistan as a whole to transition to a new era marked by great progress and huge efficiencies. including HBL. a big part of financial inclusion is also about creating the capabilities and infrastructure that will allow government and multinational organizations to manage and distribute aid to victims of natural disasters such as floods and earthquakes. Thinking outside the box At HBL we have piloted the two services. The realization that banks and mobile operators must work together for the good of the country has prompted regulatory authorities to seek dialogue and demand mobile operators develop a concrete roadmap that will allow financial institutions to offer mobile banking services supported by their mobile networks. paper-based solutions. first. In other words. We needed a model that customers could use and appreciate. But first it is important to understand our vision for financial inclusion. moves away from manual. were quite successful and far exceeded our expectations in terms of volume and results. including the U. paves the way for a new ecosystem and a change in attitude that will combine to create ideal conditions for the introduction of additional mobile banking and payment services in the near future. and there are many more in the pipeline. financial inclusion is sharply focused on providing all people access to quality financial services. in Pakistan. that allow them to make good. In fact. As customers come to understand the benefits of bill payments using their mobile phones they will be open to considering the many other ways mobile banking can improve their lives.S. Utility bill payment is a service showing impressive volumes as the population. While the financial regulator in Pakistan is very supportive of our efforts. Unfortunately. paper-based solutions. more importantly. the same cannot be said for the country’s mobile operators. to transition Pakistan to a higher income economy by empowering the unbanked to participate in society. providing a prime example for other countries. The pilots also demonstrated the importance of putting the customer. However. We therefore decided to develop a telco-agnostic approach that utilizes a smartphone application accessible via mobile data and Wi-Fi. The pilots. mobile banking is just part of a larger portfolio of capabilities that would allow Pakistan to close the gap with other countries in the region and offer a blueprint for other countries around the world working to achieve a similar positive outcome. are not waiting. meeting these customer requirements has been a bit of an uphill battle for HBL. and one that financial institutions could also afford. this required HBL to rethink its approach. remittances and utility bill payments. but dismissed that since it required institutions to invest in stable systems and speech-recognition software. Against this backdrop. We also see a clear opportunity to introduce innovative products and services 98 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 99 .Utility bill payment is a service showing impressive volumes as the population. People want ease and efficiency. They will ask themselves: Can mobile banking allow me to save money on my account? Is it possible to do other transactions or even invest using my mobile phone? This acceptance is critical since we have learned that change is accelerated when it has the support of the people. aimed at achieving the much greater goal of financial inclusion. HBL is planning to launch the services outlined above. and this is what mobile technologies deliver. We considered IVR. not technology. moves away from manual.. to follow as they work to provide disaster relief to people in the wake of Hurricane Sandy. Greater goals At HBL we perceive more than a chance to deliver a broader range of mobile banking services.

to create an enabling environment. Deputy Managing Director.000 customers have been signing up each month since the commercial launch in 2012. mobile operators and banks must seek to cooperate. However. Another important driver has been the early decision of the regulator to allow a bank-led model. is determined to drive mobile banking services as part of a wider agenda to achieve financial inclusion.5 million using the mobile banking platform. after 60 years of independence. This progress is due in part to the strong commitment of the government. reveals the rapid introduction and uptake of mobile banking services over just the last two years. Dutch-Bangla Bank Limited (DBBL) was the first to launch mobile banking services targeting the unbanked. As a result. 100 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 101 . To date 25 banks have obtained the central bank’s permission to provide mobile banking services. or rebuild their homes. Faiq has held a variety of management positions within HBL. not only improves their quality of life because they can save and plan for necessities like housing. has allowed the country to boost the overall access to accounts among adults significantly. To date these customers have made more than 150 million transactions valued over US$300 million and deposited more than US$8. cross-sell and ensure client satisfaction for the HBL’s corporate and financial institution clients in payments arena. If you consider that. which is essential for a commercially viable. and has served on the panels of United Nations and UNESCO responsible for innovative financing options for education and gender specific issues. medicine. Of these. where his principle activity is to lead and direct the strategies for HBL’s Payment Services Group and work on client sales origination. The last natural disaster showed that Pakistan is still limited in its ability to provide relief and must build an ecosystem that allows all organizations. education and life after retirement. not compete head-on. It also allows Pakistan to look forward to a safe and stable future because all people are stakeholders and are determined to work toward a common goal of prosperity and growth. It reports an average of 100. competitive and safe market. Of course. there is work to be done and everyone is learning by doing. in tandem with the central bank. to distribute aid to all strata of society when disaster strikes so they can buy food. Dutch-Bangla Bank Limited for example. not just a few banks or institutions. Faiq Sadiq has been with HBL for 22 years. Shirin. permitting only financial institutions to offer mobile banking services.5 million) it would appear that Bangladesh should be lagging in the development and delivery of mobile banking services. Empowering the unbanked to participate in the financial system.Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Creating New Pathways For The Poorest By Abul Kashem Md. In Bangladesh some 3 million people have made mobile banking services an integral part of how they plan and live their lives. 15 banks have launched some kind of mobile banking offer. The country continues to witness strong growth and the government. Bangladesh is a country full of contradictions. the 45+ banks operating in Pakistan count only 18 million customers out of a population of over 190 million. a 2012 report on Mobile Financial Services by the Bangladesh Bank (Central Bank). in tandem with the central bank. then you begin to understand the critical importance of financial inclusion. With a population of 160 million and a mobile penetration of just around 60 percent (or 95. and the bank is planning a slew of new services paired with new authentication approaches to grow that number exponentially.

13) at agent outlets.400 ATMs located in urban areas. And even then the poor would have to travel at least 30 kilometers on foot to visit the nearest physical branch office and use our banking services. debit interest payment. be they Bank recruited or Telco nominated.Pioneer approach While regulations clearly encourage all players to invest their efforts in seeking solutions to reach and serve the unbanked. no other approach can extend 102 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 103 . real-time ATM withdrawal. providing customers financial services including: airtime top-up. merchant payment. the bank had negotiated with each of the country’s six mobile operators separately. At DBBL we have 126 bank branch offices. cash-out. utility payment. Mobile benefits When it comes to serving the unbanked mobile is not a choice. financial services to the 87 percent of the population that does not yet have a bank account. You might argue that we could drive financial inclusion by simply installing ATMs in villages. IVR and USSD) to open accounts and process payments. This mobile operator agnostic approach allows DBBL to reach the entire population of unbanked. In practice customers don’t need to open a traditional bank account with DBBL to access the mobile banking services. there is a physical coordination between ATMs and physical branch offices that are needed to feed the machines with money. and some 2. In other words. The main service is a menudriven service accessed through USSD channels provided under agreements with our mobile operator partners. cash-in. Imagine that DBBL is only allowed to open 15 physical offices per year and keep in mind that there are at least 460 towns and villages where we should be present in order to meet the local needs of the unbanked. several services we offer are ones our competitors are still not able to provide their customers. In the case of DBBL. which we operate as a separate platform from our core banking system. the mobile operators were reluctant to share the USSD channel with us. to increase the number of ATMs we would also need to build new offices at each location. two mobile operators — Banglink and CityCell — agreed to partner with us. Initially. You might then argue that the work to achieve this is costly. DBBL launched its service branded “DBBL Mobile Banking” in March 2011. Do the math. Our suite of mobile banking services use a technology platform from our solutions vendor. not all are eager to cooperate. However. In our view. In fact. this logic leaves out an important variable: Bangladesh Bank regulations limit the number of branch offices a bank can open per year. An individual can open a mobile account by presenting the proper identification and paying a deposit of only Tk 10 (US$ 0. salary disbursement and remittance — to name a few. regardless of their mobile provider. Thus subscribers of any mobile operator can do banking transactions through the bank nominated agents. and it would take 40 years to build this banking infrastructure. there are plans to link these systems in the future. This platform uses various technologies (SMS. However. After months of negotiations. it is an imperative. not rural villages. However. rather than compete. This mix of services has allowed us to attract one million new customers since launch. and we are optimistic that this number can grow to 3 million by end-2013. but do-able.

To this end we are working with Western Union to introduce a new kind of ‘pull’ service that would provide customers with a PIN number so they can literally ‘pull’ money from Western Union into their mobile banking account. providing access to financial services should be understood as a first step in a journey that will ultimately require product innovations in insurance. In fact. Since customers lose their electronic banking cards. DBBL is not focused on enabling models that allow P2P payments and the like. For example. DBBL was first to the market with bill payment. However. DBBL is currently involved in a pilot with the World Food Program (WFP) to use mobile banking to deliver assistance and allowances to the poor directly onto their mobile phone. boosting rural economies and national GDP by scaling up money circulation in towns and villages and bringing new creativity to banking services to benefit the poor — and the poorest — of Bangladesh. In the meantime. water — using their mobile phone. Innovate — often Access is often seen as the goal of financial inclusion. we determined that the risk was too great to base this mobile service on physical cards. However. but there are plans to extend this. such as biometric or fingerprint recognition that will allow people who don’t know numbers or read the alphabet to use mobile banking. to use mobile banking to collect monthly installments. it’s widespread and repeated usage that is needed for Bangladesh to grow and prosper. they can withdraw the money — in cash — from our ATMs or agents. Unlike banks in other developing markets. having a huge network of ATMs would not address the real obstacles that prevent an estimated 60 percent of the country’s population from having access to banking services in the first place. Instead. who have been left out of the mainstream financial system. In yet another pilot we are working with We are also exploring new technologies. To date the NGO workers must travel around the villages and physically collect the money. Of course. Then we found people also wanted to use their mobile phones to withdraw money from an ATM. we opted to enable a cardless transaction and introduced a service called ATM Withdrawal Service. which means customers still have to go to a bank and collect the money in cash. an NGO. and the banks that have invested to offer them in the first place.What’s more. or simply fail to keep them in a safe place. The goal of our strategy is financial inclusion and developing a savings habit among everyone that will ultimately benefit the Bangladesh economy. It’s also the technology that will transform the entire country.1 poverty and a lack of education are the chief challenges to financial inclusion. The positive response to this service alerted us to yet another opportunity. prompting us to be the first to partner with Western Union to provide a channel for remittances. mobile is the only way to deliver mobile banking services at an affordable cost to both the unbanked. that provides microfinance loans. Mobile would simplify the process. In response to this we introduced merchant payment services. pensions and government payments. gas. we have also partnered with many remittance companies all over the world to introduce the remittance through 104 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 105 . DBBL continues to innovate and test the waters for pathbreaking new services. To drive usage and also to compete successfully against the many banks lining up to steal our lead. which it defines as “the process of ensuring access to appropriate financial products and services needed by the vulnerable groups of the society at an affordable cost in a fair and transparent manner by banks and financial institutions. Once this money is deposited into their account. and also make it much safer. we soon observed that customers also wanted a service that would allow them to buy and pay for goods in a store with their mobile phones. Western Union is not an account service. a service we introduced when we saw that customers demanded a way to pay all their monthly bills — electricity. It is in the early stages right now. credit.” Clearly. According to the Bangladesh Bank.

More importantly. Overall. Thus. has been a little costly but it will begin to generate a profit this year. Prior to that. allowing them to save money in a safe place. was too small to be considered statistically significant. we cannot educate just over one million customers. Therefore our strategy is squarely aimed at customer acquisition. the beneficiaries can withdraw cash from an ATM or from agents. A big part of this has been our effort to educate our agents to help our customers. we have noticed that our customers appreciate simple services that help them manage their lives. Interestingly. Since 2008. and what doesn’t. allowing DBBL to focus attention on improving usability and increasing the value it delivers. FOOTNOTE 1. Innovation is key to encouraging use and building lasting customer loyalty. we are on track to grow our customer base to 3 million and reach break-even this year. he was the Head of IT and Cards in both DBBL and BASIC Bank and 8 years with the Government of Bangladesh.000 agents in place to serve around 1. Under these arrangements. DBBL is exploring how it can use mobile to extend lending services. In this scenario customers will authenticate themselves using their finger print and local agents will be equipped with the readers and remote connectivity to scan and accept a finger print as proof of identity for deposits and withdrawals. such as biometric or fingerprint recognition that will allow people who don’t know numbers or read the alphabet to use mobile banking. Our approach. In fact. Abul Kashem Md. Among these are top-ups. the biometric solution will help us to open accounts for those beneficiaries although they do not own a mobile phone. where he is currently Deputy Managing Director. The government of Bangladesh is now disbursing allowances to some 20 million of the country’s ‘ultra poor’ on a monthly basis. and we are convinced that customer retention will not be a challenge if we observe and listen to customer needs and behavior. which is why DBBL is determined to launch new products every six months. was a huge advantage. Moving forward. They can also use the money deposited on the mobile account to conduct commerce or pay utility bills. To date DBBL has a network of just over 24. Mobile banking is new to Bangladesh and has opened up new opportunities from our bank to grow its customer base. to use and remember a PIN. and a line-up of new products to help them better plan and manage their futures. Rural users stressed that the security mobile offered. Shirin has over 28 years of experience in financial services. he has undertaken a variety of roles within DBBL. This is further confirmed by a recent consumer survey documented in a policy paper issued by the Bangladesh Bank. in their native Bengali. the report said it does provide an important indication that mobile banking services are reaching a growing proportion of the population — and leaving a lasting impression. DBBL Mobile Banking Services.bangladesh-bank.pdf 106 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 107 . for example. Mobile is a new channel allowing us to reach new customers. one hundred unbanked across the country. But we are also exploring new technologies. it has provided us deep insight into what works.1 While the sample size.10 million customers with 60 percent of them making at least one transaction in last three months. the vast majority of respondents have a positive view of mobile banking and 75 percent said their primary use of the service is to send or receive money. www. Most of these beneficiaries have no mobile phone and are illiterate. Obviously. will choose — and stay with —us. which has been to set up our own offices and deploy our own employees to train and monitor agents.Having a huge network of ATMs would not address the real obstacles that prevent an estimated 60 percent of the country’s population from having access to banking services in the first place. They must teach customers. This approach will pave the way for the government to use our system to disburse the allowances to the beneficiaries quickly and directly. The road ahead Being a pioneer has allowed us to be the country’s leading provider of mobile banking services. To ensure the unbanked use the services DBBL offer we have sharpened our focus on education and innovation that will empower the poorest of the poor and the illiterate to use mobile banking to better their lives. to the unbanked and the in the form of microfinance. Upon receipt of money in their mobile accounts. so we must equip our agents to take on this task. cash-in and cash-out services. Customers that are presented with choice. wage earners and employees are able to remit their money to DBBL Mobile Banking Accounts from the counters of various exchange houses abroad.

At one level. and unbanked. of a population of 200 million. Housing. a territory that is nearly impossible to serve with physical branch offices. It's a must for youth. the number of mobile phone users in Indonesia is forecast to exceed 150 million unique mobile subscribers. our strategy is sharply focused on driving financial inclusion. And. In our view.Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Targeting Tomorrow’s Mass Affluent By Wan Razly Abdullah. but it takes vision to plan for a day when today's unbanked will be part of the burgeoning middle class. Key economic indicators suggest this decade will see many unbanked move quickly up the social ladder to emerge as tomorrow's middle class. PT Bank CIMB Niaga Tbk It makes business sense for banks in developing markets to drive financial inclusion. is preparing for that future now by rolling out a platform that will allow it to deliver mobile banking and commerce services to this new demographic. Mobile is simply the most effective way to deliver banking services to Indonesia's population of some 250 million spread out across 13. we are pursuing a strategy to accelerate this change and —ultimately — position the bank as the market leader. mobile is part of the fabric of Indonesian society. Reports from the World Bank. and a life-saving tool the poor. The outcome: popular demand for services that enable much more than person to person (P2P) payments. However. CIMB Niaga. credit cards— all of this and more is possible. the impact of this progress on our society. disabled. It is also the channel that will trigger a new phase of growth and innovation in mobile money and commerce.600 islands. they can plan seriously and diligently for a stable financial future. have access to a bank account. But reach is not the only reason for our decision to offer mobile banking. and our banking business. The number of bank account holders is expected to rise to 70 million banked by end of 2013. it is also completely aligned with the lifestyles and life stages of our customer base.000 per year. Put simply. when people fully understand what they can hope to attain. mobile is much more New choices than a technology. Obviously. when people are earning US$10. microfinance and services that allow them to plan and track all their personal affairs using their mobile phones. Strategy and Finance Director. predict the per capita income of the average Indonesian citizen will rise from US$3000 per year to US$10. Additionally. the number five bank in Indonesia. the market for banking services will explode and expand. will be profound. At CIMB Niaga we are not waiting for this future. Clearly. confirmed by our own analysts.000 by the year 2020. Customers will require mobile commerce. Currently. we 108 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 109 . a life-simplifying tool for the urban and middle class. only 50 million. The effort is supported by proactive customer education that harnesses social media to reach Generation X and Generation Y customers across all social strata. travel. education.

our strategy is designed to satisfy the needs of both. Go Mobile counts 300. However. With it they can check balances and make transactions. A transfer between different domestic banks incurs a small fee of US$ 0. Clearly. Mobile banking is in its early stages in Indonesia. convenient services that help them manage their finances. bill payment incurs only small fees (around US$ 0. we also recognize that a large number of the early adopters are also concentrated in a demographic that includes Generation Y consumers and young urban executives. It is important that the unbanked can access these services using any make or model of mobile phone. but is free of charge between CIMB Niaga account holders. Go Mobile is also available as mobile application across all operating systems that customers can download to their smartphone. mobile airtime top-ups and P2P payments to recipients with domestic bank accounts.000 financial transactions. and growth from a customer base of zero has been phenomenal. The rapid uptake of the services has exceeded our expectations. To communicate our value proposition to these customers CIMB Niaga has chosen to use the media they understand and embrace. Likewise. Since putting the needs of one customer segment over the other would be like leaving money on the table. They also benefit from an additional location-based feature that allows them to search for ATMs or branch offices nearby. will not be such a hard sell. our pricing model is simple. While it perfectly matches the needs of the unbanked for basic mobile banking services. encourage loyalty and ensure that introducing the other products in the years to come. Smart marketing Double vision To ride the wave of opportunity coming CIMB Niaga launched Go Mobile in February 2012. it also caters to the requirements of time-strapped urbanites for simple. For the unbanked. if the handset supports it. We have invested in digital display advertising online. The mobile banking service enables bill payments. We have also been active organizing road shows that we take to shopping malls. supported by proactive marketing to capture the attention of trendy Millennials who consider it a hassle to go to a physical bank for service. but the real driver has been our promotion of the service to the customers of tomorrow. our mobile banking services have been well accepted by our customer demographic. and appeals to both the unbanked and price-conscious customers across all social strata. Go Mobile is delivered using the SMS channel provided by mobile operators.35) and only with certain billers. Some services will also be delivered by USSD. In an average month we see around 1. Service fee for purchase of mobile phone airtime top up is free.000 users as of December 2012 — and the momentum shows no signs of slowing.5 million log ins to the service and some 250.50. such as credit cards and insurance. What's more. university campuses 110 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 111 . and we have also produced commercials for YouTube that customers can view and share.are also well aware of the benefits associated with offering mobile banking services now that will cement customer trust. For the mass affluent.

and we are working to ensure that the design of these services is one that is also easiest for our customers to understand. customers who can then go out and show others in their community how to use our services.and popular events where we demonstrate the service. Because this mobile wallet does not require users to have a bank account. Prior to this he held a variety of senior positions at Maybank Investment Bank. so that means completing the KYC process and showing ID. and we award prizes for the best commercials for our services. Mobile roadmap Our experience shows continuous education and marketing is key to rolling out mobile banking services successfully and at scale. but it is equally important to educate customers about the benefits of the service and applications in everyday life. credit cards— all of this and more is possible. Complete commerce Our next focus will be on offering mobile payments and enabling mobile commerce. Northern Trust Company and PriceWaterhouse Coopers. Building payment capabilities in a mobile phone will bring about new ways of doing things. education. It is also possible for customers to withdraw the money from our branch ATMs using a registered phone number. is a service that builds on our platform that enables customers to make domestic P2P transfers across all mobile networks by just knowing the recipients mobile phone number. they can plan seriously and diligently for a stable financial future. our mobile wallet that launched in March 2013 after a successful pilot phase. Rekening Ponsel. with them when they leave their home. Customers who want to transfer greater amounts must register themselves with the branch. An ATM card is not needed for this transaction. travel. This approach also bridges the gap. beginning with a mobile wallet and extending to mobile commerce. At the ATM the recipient can make the withdrawal by pressing a button at the ATM and them inputting their mobile phone number followed by a PIN. Along with our passion to be the market leader in mobile banking. Wan Razly Abdullah has held the position of Strategy and Finance Director of PT Bank CIMB Niaga Tbk since July 2009. To encourage interaction and interest we invite customers to make their own commercials and post them on YouTube. not their wallets. or US$500. Both have a firm position in our roadmap. The effort also paves the way for CIMB Niaga to offer the other services in the pipeline. Housing. To accomplish this we have trained all our staff in all our 974 branch offices to use the mobile application and explain it to customers who have queries. 112 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 113 . the amount they can transfer or receive using their mobile phones cannot exceed Rp 1 million. When the transfer is complete the recipient receives a text message alerting them that the amount has been transferred and directs them to the nearest ATM or CIMB Niaga branch to withdraw the funds. not their account. we believe that mobile commerce is an important piece to enable end-to-end mobile solutions to our customers. the Central Bank permits them to transfer or receive amounts up to Rp 5 million.000 per year. There are several options in the development stage. allowing CIMB Niaga to teach the unbanked. or around US$100. Social media is certainly effective. when people are earning US$10. Once they have done this. In the future we envision that our customers will take their mobile phones. Obviously.

and Bandung. Put another way. provided by local financial institutions.64 demographic is lagging behind the index average of 57 percent. the Mobile Payments Readiness Index compiled by MasterCard points out that Indonesia 1 “is somewhat behind the average” . it’s clear that mobile technology is the only way to extend the provision of financial services to the mass market of unbanked. Specifically. Consumers in Indonesia need to be convinced of the value of mobile money services on the whole. commercial banks serve a relatively small proportion of households and their financial services are heavily skewed towards urban areas. and almost all have been focused on customer retention. With mobile network coverage pegged at 90 percent. Indonesia is a large untapped market that offers even greater opportunities for first-movers able to make the match between the value proposition they offer customers and the services people genuinely need and appreciate. With a population of 250 million.mastercard. MasterCard stresses that the total number of people who have mobile phones and access to networks “needs to increase in order for mobile payments to develop commercially going forward”.com/country/?id Services skewed To date mobile banking has been made available in Indonesia. btpnWOW! Mobile readiness factors in Indonesia Indonesia is in the early stages of a journey that could see the country’s unbanked advance past mobile wallet services offered by mobile operators in the region to embrace branchless banking services. but it has primarily been offered as an additional channel for those customers who already hold a bank account. This approach neglects a large — and potentially lucrative FOOTNOTE 1. the capital.Part 3: Banking In Developing Markets: Plotting The Course For Financial Inclusion And Financial Success Branchless Banking Driven By ‘Disruptive Innovation’ By Donny Prasetya. of which only 50 million are estimated to have a bank account. Reports also note that many of the commercial banks operating in the country have been involved in some kind of mobile banking initiative. there is a catch. 114 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 115 . Services have been disproportionately concentrated on large and developed urban areas including Jakarta. according World Bank Group reports the gap between bank account holders and mobile subscribers is only going to increase over the next few years as the mobile subscriber population continues to grow. However. Surabaya and Denpasar. Bank BTPN discusses the distinction between the two types of services and reveals its plans to disrupt the market with a new and cost-effective model aimed at empowering people at the bottom of the pyramid to manage an interest-bearing bank account. Mobile coverage 90% Mobile phone prevalence 48% Figure 1: Based on data from MasterCard Mobile Readiness Index mobilereadiness. penetration at 48 percent in the key 15. Head of Business Development. Much is at stake.mastercard.

it empowers unbanked to open and manage an interest-bearing bank savings account and improve their standard of living. Traditionally. Indeed. before detailing precisely how BTPN plans to upset the status quo. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect.— market of unbanked.claytonchristensen. Clayton Christensen — an influential business thinker and author of the milestone book The Innovator’s Dilemma1— writes that disruptive innovation is an innovation that helps create a new market and value network. Differences and opportunities But. which is resolved to reach deeply into the poorer strata of Indonesian society. Of the unbanked poor who seek credit. earn money and are considered creditworthy by MFI1 standards. Thus. widely available in Indonesia. and eventually goes on to disrupt an existing market and value network (over a few years or decades). FOOTNOTE 1. It calls for an approach that is radical and disruptive. banks are called on to think of new business models. it’s important to explain the distinction between mobile banking services. but mobile technology alone cannot achieve this ambitious end. Of course. What’s more. mobile is the only efficient and cost-effective way to reach and serve this mass market. activities where an electronic store of value is linked to the mobile number of the holder. the holder is not required to have a bank account. mobile banking services refer to financial transactions undertaken using a mobile device against a bank account accessible from that device. Since most of Indonesia’s banks aim to serve the middle income and above segment. mobile banking services have evolved to include mobile payments and mobile money transfers. it misses the importance of having an open mind to develop and embrace new models. any effort made to see branchless banking as a subset of traditional banking potentially imprisons the new service within old paradigms. and not just jumble branchless banking into the existing electronic banking channel. It harnesses mobile to do more than deliver services. Monetary Financial Institutions 116 FOOTNOTE 1. poised to transform the country’s economy and commerce. In my view. Branchless banking is a different kind of animal. that leaves a large market for BTPN. typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market. the value stored in a mobile wallet can be used as a payment instrument and a transfer instrument. branchless banking is where we will see the forces of disruptive innovation collide and create new opportunity. the majority of whom work. displacing an earlier technology. and branchless mobile banking services. While it is easy to think of branchless banking as a service enabled by mobile technology. Clearly. Another word of caution here: this new branchless banking might not necessarily be complementary with the traditional retail banking business and could even end up cannibalizing it. about half are deemed to be too small to be commercially Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 117 . www. However.

branchless banking may not be for every bank to implement. customers at the bottom of the pyramid to whom we also hope to extend loans as well as financial services moving forward. which now involves approximately 14. which was founded in 1958. this changed dramatically and in our favor when the Central Bank formally announced its intention to introduce regulations paving the way for branchless banking services in 2013. We are mobile operator agnostic in our approach and currently deliver the pilot service using the network belonging to one of Indonesia’s mobile operators. however.000 of our own employees across Indonesia. btpnWOW! will also be the first commercial branchless banking service to allow customers to sign up by completing the KYC process at non-bank agents. In a nutshell. Our customer base includes 800. btpnWOW!. By way of background. We also see btpnWOW! as a tool that equips us to identify individual customers.600 points of presence including ATMs and branch offices. is designed to be a ‘market-first’ service that offers mass market unbanked customers a full-feature bank account paired with low price and a radical value proposition. In November 2012. Essentially. To accomplish this goal we began a pilot of branchless banking services in November 2012 called btpnWOW! Planning for the pilot. cash-in. We are confident this offer will be rewarded with long-term customer loyalty toward our brand and bank. Closed User Group 118 119 . However. Moving forward. This is a service we will build extensively in the next 12 months. Take advantage of this window of opportunity we plan to launch commercially in this timeframe. BTPN. btpnWOW! will deliver all the standard capabilities associated with interest-bearing bank accounts including account opening. while at the same time enjoying the convenience of full-service banking over their mobile devices. allowing a group of customers to interconnect via a mobile network at Ultra Low Cost. started in June 2011 and experienced some delays due to a lack of regulation.WOW factor For this reason. has 1. btpnWOW! will not charge monthly fees. who would be good candidates for our more traditional lending products going forward. This is extremely disruptive and allows us to break new ground. Sustainable success Pegged at around 70 million. Assuming that the appropriate set of regulations will be introduced by Bank Indonesia.000 microbanking and the so-called ‘productive poor’ customers. banks do not need to make huge investments to serve this FOOTNOTE 1. nor will we require a minimum balance. bill payment and remittance as well as communication features such as CUG1. cash-out. We are confident that our service will be available on all the country’s GSM mobile networks in the course of the year. It requires a radical approach and visionary leadership that can see beyond today to a tomorrow where widespread financial inclusion can benefit all people. the unbanked market is huge. we see huge opportunities in commerce. which is slated to launch in Q3 2013. and serves over one million customers. At BTPN we are pursuing a strategy to introduce pure branchless banking for the mass market of unbanked at a price point that undercuts the competition. enabling large companies that buy commodities like coffee to pay for those goods directly to the farmers and merchants on their mobile phones.

We are therefore involved in a pilot to provide these independent smallholder farmers an interest-bearing bank account. segment. lugging cash along with them. It may seem quite a stretch for a traditional bank to host an information portal targeting customers at the bottom of the pyramid. Little wonder that one third of Indonesians don’t save at all. Research also shows that banks can reap huge business benefits if they offer the right product mix at the right price level. Our aim is to grow our customer base from one million. let alone secure way to conduct business. untapped market that would save money with banks — if they only could. Forget sophisticated — or complicated — products. cash-out. enabling large companies that buy commodities like coffee to pay for those goods directly to the farmers and merchants on their mobile phones. and thus solve some important issues around distribution and marketing. . but we are convinced that this is the path we must take to help our customers achieve sustainable performance and a more stable financial future. Bank Tabungan Pensiunan Nasional in Indonesia. To accomplish this we will incentivize certain customers to work as agents for the bank. a pioneering branchless banking service in the country. have to go through the remote farming communities. In both cases our customers will be our representatives. We will round out this virtuous cycle by using mobile to deliver the unbanked the information and advice they need to plan their futures and make business decisions. bill payment and airtime top-ups. supported by senior management. our vendor solution allows us to deliver these basic services. Fortunately. enhanced by mass customization. where it is currently to 5 million by 2016. at large scale and low cost. It’s hardly an efficient. we see huge opportunities in commerce. Our focus group research shows the services the unbanked want most center on cash-in. currently heading the business development aspect of btpnWOW!. can reduce an account balance to zero in just months. We will also rely on our existing customer base to recruit more customers and — ultimately — entire communities for our branchless banking services. to innovate banking by using new technology and new models to reach new customers and inject new dynamism into Indonesia’s economy. To date companies that do raw material buying for companies like Starbucks or Mars. We are on a mission. Prasetya was an Associate Operations Officer with IFC who managed the Indonesia Mobile Banking Project. Moving forward. which banks must charge to offset administrative costs. High monthly fees. The first item on the agenda is to convert our existing customers to btpnWOW! After we achieve this milestone we will target the broader unbanked market. Prior to BTPN.At BTPN we are pursuing a strategy to introduce pure branchless banking for the mass market of unbanked at a price point that undercuts the competition. The right price level is critical since the fee structure offered by most banks discourages — and even devours — small deposits. 120 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 121 . thus allowing them to accept payments on their mobile phones and — ultimately — build their business. Donny Prasetya is a Senior Vice President with PT. We at BTPN see an opportunity to extend financial access to a huge.

we examine what mobile operators are doing and invite mobile authorities to evaluate progress to date. From NFC trials to comprehensive strategies aimed at creating commerce ecosystems. Celcom is mapping a plan to integrate its mobile wallets into its larger customer loyalty program. Ooredoo.Part 4: Mobile Operators: Paving The Way For Mobile Payments And More PART 4: MOBILE OPERATORS: PAVING THE WAY FOR MOBILE PAYMENTS AND MORE With over half of the world’s population using a mobile phone. nearly twice the number of people who use a bank account it is no surprise that mobile operators are lining up to launch services that enable mobile payments. is positioning itself to be a leading provider of mobile money services and one of the world’s top 20 mobile operators by 2020. 122 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 123 . The strategies are many and the rewards are high. as mobile operators scramble to build a capabilities mix that will allow them to play a leading role in mobile commerce and secure a central position in the emerging mobile money value chain. for example. Mobile wallets and bill payment are just the start.

allowing the potential providers to explore the possibilities and set up the right partnerships. allowing a new dimension of interactivity. the Sugar Loaf and. The GSMA is supporting technology trials in Latin America to show the possibilities of NFC-based interactive experiences and the business opportunities this technology affords the telecommunications industry and other sectors. receive restaurant discount NFC trials in Rio One of the trials involves RIOCard (a card offered by the public transportation ticket NFC is one of the technologies enabling the Internet of Things. an ID card related to their health insurance and one card for every bank account they hold. People use plastic cards in a wide variety of scenarios. artwork and points of interest that interest them by just touching the tag with their mobile phones.enabled mobile phone app. The idea is to replace the existing plastic card with an NFC. NFC in big events NFC is one of the technologies enabling the Internet of Things. where people can click or touch elements in the real world and bring them into their social Web. More important. France. Rio is well known for its beauty and tourist attractions. behaves as a secure. Just imagine the amount of paper and plastic we will be saving by doing this and the positive impact in our environment. As they prepare for their trip. the main attraction may be the NFC trials taking place in Latin America. for example. They have a card to collect loyalty points from their gas station. these NFC trials will highlight business opportunities and inspire companies across all verticals to think of new ways to harness NFC to connect with consumers in the context that matters most. All of these cards can be replaced by smartphone apps. But now we are in sync for the next big. visitors can 'touch' a tag with their NFC-enabled GSM phone and actually hear an audio description of a point of interest such as a landmark. worldwide event. These trials will enable users to make payments and access information with an NFC-mobile phone. for this to happen the point-of-sale technology and other kinds of NFC readers must be in place first. The NFC-enabled smartphone is the device that connects the virtual and real worlds. digital wallet holding the bus tickets.Part 4: Mobile Operators: Paving The Way For Mobile Payments And More SIM-Based NFC: Enabling A New Level Of Interaction For Latin American Big Events By Valter Wolf. which resides in the GSM SIM card. GSMA Excitement grows as Brazil gears up to host the FIFA 2014 Soccer World Cup and the 2016 Olympic Games. 124 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 125 . NXP and Samsung are also participating in this trial. issuer) and several mobile operators in Brazil. Market Development Director. People will use the same mobile phone to access more information about tourist routes. a card to track rewards from retailers where they buy. of course. which will start with 250 handsets delivered by RIOCard by the beginning of 2013. travelers to Rio will be able to charge their NFC-enabled mobile phones with the tickets they will use to take buses to popular destinations including the Copacabana beach. This is why the GSMA is supporting these proof-of-concept trials. Rather than pay for the bus ride using cash and change. Besides hosting the FIFA World Cup. However. In Nice. people can pay by simply tapping their mobile phone to an NFC reader. where people can click or touch elements in the real world and bring them into their social Web. They can also access Internet links for the places. which are supported by the GSMA. Soccer fans coming from all over the world will land in Rio de Janeiro in 2014. NFC maturity was running just a few months behind when the London Olympics happened. This app. the Maracanã Stadium. Of course. Just imagine the potential of these applications when they are deployed in all of the cities hosting the 2014 World Cup and the 2016 Olympics Games. Companies like Gemalto.

Rich Communication and Connected Living. The success of M-Pesa is reflected in the numbers. MasterCard GSMA is supporting technology trials in Latin America to show the possibilities of NFC-based interactive experiences and the business opportunities this technology affords the telecommunications industry and other sectors. 2 Ubiquity. However. qualify for backstage passes — and much more. learnings from some of the successful mobile money solutions are raising hope that an open network approach to mobile money could achieve global scale in the same way as the global card networks achieved with payment cards. collect loyalty 'points' based on places they visit and the games they watch. June 2012 by McKinsey 2 “ MasterCard Advisors Analysis 2012 3. With over 100 mobile money deployments globally. mobile operators — which are yet to be discovered and explored. Valter Wolf joined the GSMA in 2012 and is responsible for engaging key ecosystem stakeholders. people will also be able to unlock badges. FOOTNOTE Kenya’s M-Pesa is considered the most successful mobile money solution so far and a good place to look for key success factors. including SIM-based NFC. M-Pesa provides mobile commerce used by over 70 percent of country’s adult population and now processes more transactions domestically than Western Union does globally 2. He has broad experience in telecommunications in the Marketing & Strategy area. This collection of successful mobile money solutions answer key questions and offer valuable learnings. Like all new payment form factors. developing and facilitating traction for selected strategic initiatives of the mobile industry. the places they visit and the games they watch or play can be combined in many ways. This brings creative and exciting business opportunities to players across the ecosystem — sponsors. The amount of data generated by the interaction between people using NFC-enabled mobile phones and the buses they take. With over half of the world’s population using a mobile phone. NFC allows sponsors and service providers to make this connection with people — in the right context — when people are holding the NFC smartphone at a given time and place. Every big event is made possible by sponsors wanting to interact with their customer base in the best and closest way. only a handful have reached any meaningful scale. with working experience in Germany and Brazil. Enough stake- 1. M-Pesa did a phenomenal job in understanding the biggest market need – a better option for urban workers to send money home to their family in rural areas – and developed a mobile money solution that was materially better than existing options. are small compared to the US$10 trillion that flows through payment cards or the US$20+ trillion being paid with cash2. get free goodies. Even bullish forecasts for mobile payments. But. Vice President. “Pathways to growth in mobile Payments”. 100 percent annual growth reaching US$500 billion for 20151. coupons. Mobile Money. M-Pesa also kept the initial solution simple to understand and effectively communicated the value proposition in a way that resonated with consumers. nearly twice the number of people who use a bank account it is no surprise that mobile money is the next big thing in payments and financial services. By doing this. In other words. “Mobile money: Getting Scale in Emerging Markets”. June 2012 by McKinsey 126 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 127 . service providers. mobile money has not yet lived up to its promise. mobile money must overcome the chicken/egg syndrome. What caused M-Pesa to be so successful where other solutions have not? Three important factors are: 1 Compelling Value Proposition.Part 4: Mobile Operators: Paving The Way For Mobile Payments And More Open Solutions Could Help Fulfill The Promise Of Mobile Money By Sal Karakaplan. NFC lets sponsors link with customers right on the spot.

‘Open loop’ mobile money solutions will also benefit from this approach and are likely to create compelling value propositions on a sustained basis. June 2012 by McKinsey 128 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 129 . Mobile money solutions that leverage FOOTNOTE 1 “Pathways to growth in mobile Payments”. The transition to ‘open loop’ mobile money solutions is already underway. In M-Pesa’s case. debit. M-Pesa did benefit from a simple ecosystem with fewer players. but also ensured all ecosystem participants benefited. success of open loop card payment solutions (credit. The 3 Business model that creates value for all stakeholders. holders must utilize the mobile money to enable it to reach scale but many stakeholders will not use it until they are confident it is ubiquitous enough to be worth their effort to use. This is because of the significant infrastructure investments the card networks have already made and the ability of these card networks to leverage existing banking infrastructure for the banked population to move money in and out of the mobile money ecosystem. Payment system governing bodies like the National Payments Corporation of India are also emphasizing interoperability in their mobile payment solution guidelines. Safaricom’s significant national market coverage. Several ‘open loop’ mobile money solutions have also been launched such as by Western Union in Italy. but many payment solutions fail because of their inability to address this issue. Additionally ‘open loop’ mobile money solutions are also likely to be more cost efficient creating more value for stakeholders to share. 2 Ubiquity. Etisalat Nigeria in Italy and MasterCard in Africa. For example. aligning it with customer growth to ensure its agents are profitable. It sounds trivial that a new business model should create value for all stakeholders to be successful. the three success factors are relevant in every market.In many markets creating an ‘open loop’ mobile money solution could make an important difference. The card networks have also invested heavily to arbitrate large ecosystems of stakeholders equitably sharing the value of card payment solutions. Safaricom did have to enhance its agent network to create ubiquity for M-Pesa funding. In many markets creating an ‘open loop’ mobile money solution could make an for all stakeholders. Neteller and Moneybookers are realizing the value of ‘open loop’ and offering open loop payment cards linked to their mobile wallets. ‘Closed loop’ solutions including M-Pesa. Mobile money solutions that leverage this infrastructure can achieve instant ubiquity. delivered on the promise of ubiquity. have the broad connectivity in many markets. prepaid) has largely been driven by the rigorous and the disciplined approach for developing compelling value proposition referred to as program management. The franchise rules. 3 Business model that creates value While M-Pesa benefited from specific market circumstances. This solves complex tasks given the divergent interests and objectives. The card networks already this experience will access a proven framework for value sharing between the different ecosystem players. it paid special attention to the needs of its agent network. risk management policies and rich information content ensures the integrity of this value share. 1 Compelling Value Proposition. over 60 percent1. important difference on the three critical success factors.

and led MasterCard’s equity investments in the emerging payments arena. or Qtel. the group determined early on that 7 of its 17 markets were ready for mobile money services.Part 4: Mobile Operators: Paving The Way For Mobile Payments And More Preparing To Deliver ‘Advanced’ Services M-Pesa did benefit from a simple ecosystem with fewer players. Metro Card in New York) are already recognizing the benefits of open payment solutions and are transitioning towards them. the global interoperability of the card networks could make the mobile money solutions expand beyond the national boundaries. And they are not limited to local boundaries. Qatar and Oman. many of our customers are migrant or ex-pat workers who desperately need a service that allows them 130 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 131 . Transit payment systems globally (Suica Card in Japan. Octopus Card in Hong Kong. Mobile money solutions that are based on open network based solutions as those offered by the global open card networks are likely to address the key success factors demonstrated by success stories like M-Pesa. Taking a pragmatic approach. Fulfilling needs In the first market. which includes countries like Kuwait. It marks a new phase in the group's strategy to deliver mobile money services that are aligned with what its large and diverse customer base genuinely 'wants' and appreciates. Head of Mobile Financial Services.  Prior. And mobile money is not the only place where this transition to ‘open loop’ is happening. product development. markets that span large geographic areas. It then focused its efforts on developing a service offer that matched the needs of customers in these regions based on a keen understanding of local conditions and requirements. product commercialization and partnerships. Karakaplan was part of MasterCard’s Mergers and Acquisitions team. From enabling merchant payments to driving financial inclusion. The move doesn't only allow the multi-country carrier to create and communicate a coherent identity. Ooredoo is positioning itself to be a leading provider of mobile money services and one of the world's top 20 mobile operators by 2020. not just individual countries. made the decision to change its brand name to Ooredoo. With over 85 million subscribers across 17 counties Ooredoo has had to make some tough choices in order to meet — and exceed — the expectations of its diverse customer base. Sal Karakaplan is a Vice President in the Mobile and Industry Alliances group of MasterCard. Ooredoo In February 2013 Qatar Telecom. This approach has allowed Ooredoo to identify two distinct customer segments. but also ensured all ecosystem participants benefited. By Rambert Namy. which means 'I want' in Arabic. This is obviously a great benefit when it comes to executing the next step in our strategy to develop a turnkey solution that will allow our Operator Companies access to the technology and know-how that will allow them to roll out mobile money services quickly and confidently across their footprint. He leads MasterCard’s Mobile Money business globally in charge of strategy.

so improve their lives. we also strive to trigger a shift in customer behavior that will encourage savings and spark interest in services around personal credit. We answer this need with a mobile money service. The second market we serve. Now it's up to Ooredoo to implement a model that will get the services — and the education — to the people faster. which is why it may seem that uptake and usage of mobile money services is slow. which must be done on-location. because it is the plan Ooredoo will follow to be one of the top 20 mobile operators worldwide by 2020. our aim is to enable what this population needs most: P2P payments. It's also about learning to do what no business school taught us: how to market successfully to the bottom of the pyramid. this takes time. This allows us to gather valuable know-how and share this expertise with every Operator Company across the group. A big part of this is educating people about the service. our offer addresses the two issues countries in this market have in common: a lack of infrastructure and a growing population of unbanked. Since we are essentially asking telecoms professionals to become bankers we are supporting our Operator Companies through programs to share our best practice. is one where mobile money services are squarely focused on driving financial inclusion. to remit a portion of their monthly salaries to their families in their home countries. Obviously. it is about cultivating a customer base of unbanked whom we will empower to access financial services and Turnkey innovation It's all about reducing time to market. However. But it's not just about adopting the skills and mindset that will allow us to offer mobile money services. Ooredoo is also a profit organization that must consider the huge benefit around offering services to our mobile customers — the vast majority of whom are pre-paid users and multi-SIMers who change from one mobile network to another based on the promotions. Thus. which includes countries like Indonesia. in reality. even years. mobile money services are an effective way to combat churn. Of course. that allows this customer segment to transfer money back home directly from their mobile wallet. At one level. Providing our customers a bank account will keep them loyal to our brand. which are naturally needed to prevent money laundering. Put simply. To put this into perspective: the outgoing flows of remittance in the three markets. but they will hardly change bank accounts every day. microfinance and lending. The aim of our initiative is clear. a mobile wallet situation only addresses one side of the transaction. Kuwait and Oman. boost customer loyalty through frequent use and — ultimately — offer services that will grow to include microfinance.However. linked to a mobile wallet. total over US$25 billion. Put another way. and through partnerships with companies across the ecosystem. Tunisia and Algeria. Qatar. It is part of a larger group-led initiative we call 'the 20-20'. but it is also a complicated undertaking that will require new skills and deep commitment. However. meet with community leaders and encourage word-of-mouth marketing by connecting face-to-face with customers and fans who can help us recruit new customers. At Ooredoo experience has taught us we must go out in the field. utility bill payments and airtime top ups. This is a huge convenience for the millions of workers — approximately one million in Qatar alone — who would normally have to queue up for hours in temperatures of around 50 degrees at a money exchange house. Cost is another benefit of this market approach since Ooredoo can offer its service in these countries at a price point significantly lower than organizations like Western Union charge. which we at Ooredoo will accomplish by offering 132 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 133 . Another challenge is the strict regulation regarding international remittance and the requirements for KYC. Iraq. Agenda 2020 At Ooredoo our goal is to build trust in our mobile money services. Ooredoo must also build an ecosystem of partners and players in the receiving countries. Customers may switch operators for a better bundle. uptake of mobile money services is healthy and growing. Mobile money has been identified as a key capability that will allow us to reach this goal. not from behind a desk. prices and bundles on offer — that will encourage lasting loyalty.

Real progress Clearly. microfinance and lending. which is fully hosted. Ooredoo will still work to build its own remittance solution. Moving forward. They are unbanked because they live — and work — in areas where there is no physical bank branch office that they can visit. loyalty programs and gift cards. Rambert Namy heads Mobile Financial Services (MFS) for the Ooredoo Group. to extend a broader range of financial services to the unbanked. The Operator Companies have indicated they are very pleased with our approach and the results. and represents another improvement in the customer experience delivered by our mobile money services. our efforts are focused on extending financial services to people who have been excluded from the formal banking system. which operates in 17 countries and territories and counts 85 million customers. we have signed an agreement with MoneyGram that makes it possible — in one go — for our customers to transfer money to almost every country in the world using their mobile phone. Additionally. Our partnership with MoneyGram. In fact. However. In parallel to this partnership. the Americas and Asia including India. However. perhaps even in partnership with microfinance institutions. one that will see us establishing a bilateral agreement with the countries in question and so own the customer base. which we announced in November 2012. Previously. After all. Chief among these is the guarantee of security and quality of service. for example. we are building a team of experts that — similar to a SWAT force — comes into the Operator Companies and help them in the implementation phase by providing them expertise and best-practice. In practice the transfer of the money is almost instantaneous and recipients can collect the cash safely and reliably from the MoneyGram local agents. we are looking at mPoss. This service is currently available to our customers in Qatar. with specialist knowledge in financial services such as Electronic Payment and Mobile Commerce and all aspects related to stored value applications. a huge and sceptical demographic that will only embrace these services when they show real benefit. It makes sense to offer insurance linked to a remittance service. Nepal. which is quite encouraging. There is a huge market opportunity for mobile operators if they forge the right partnerships. Offering so-called advanced financial services is the next step on the group roadmap. In this scenario we would provide the merchants with the capabilities. this partnership achieves this goal faster. Rather than have to build a remittance solution from scratch. or partner with providers in every single receiving country. Ooredoo customers are able to send money to 284. starting with a terminal. turning their device into a card reader terminal. Mobile allows us to leverage our networks. using technologies such as NFC to allow people to make merchant payments. it's easy to imagine how we could enrich the value proposition of the merchants by enabling them to offer couponing. the key to success is to move from becoming experts in selling value-added services — which is what operators have traditionally done best — to demonstrating the value of mobile money services to the unbanked. the unbanked is not unbanked because they have no money. Bangladesh and the Philippines. The deal is the first in the world of its kind. Pakistan. Sri Lanka. Because the platform is cloud-based it provides the Operator Companies a variety of benefits. Or they simply don't earn enough money to pay the fees and charges to maintain a minimum deposit. in customer behavior that will encourage savings and spark interest in services around personal credit. which is a dongle that merchants can plug into any handset. which is incidentally the fastest-growing financial transfer service of its kind. to accept payments from our customers.This is a huge convenience for the millions of workers — approximately one million in Qatar alone — who would normally have to queue up for hours in temperatures of around 50 degrees at a money exchange house.000 local agents in 196 countries in Europe. Our first step in this direction has been to build a group platform together with our vendor partner. we are also exploring services to enable commerce. However. Namy headed the Mobile Money program for the France Telecom Group. allowing us to claim a bigger role in the remittance value chain. Namy has more than 15 years of experience in the electronic payment space. because if someone is transferring hundreds of dollars. they may also want to consider purchasing health insurance or car insurance. Under the new partnership. our Operator Companies a turnkey solution. Once this framework is in place to accept payments. and the cost is low because the infrastructure costs are shared. will also allow us to reduce time-to-market for our remittance service. we also strive to trigger a shift 134 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 135 .

With AirCash. airtime top up is the most popular service AirCash supports. Remittance recipients can perform over-the-counter cash outs or store the amount in their mobile wallet. Celcom working to market remittance services aggressively to customers by first creating more cash-in outlets in relevant areas to serve customers best. and very soon. Chief Digital Services Officer. Celcom. However. XL – another Axiata Operator Company – offers a mobile wallet service under the brand XL Tunai. which is why we are focused on building an ecosystem that will enable convenience. the provision of a mobile wallet service alone is not a differentiator as the concept is not yet widely accepted in Malaysia. an area where Celcom has made its mark with AirCash. In Indonesia. Malaysia benefits from three key factors: high mobile penetration. 136 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 137 . easy access. A big part of this vision is about advancing mobile payments. Celcom branches and outlets.7 million subscribers. one of the first mobile wallet services to launch in Malaysia. and the Philippines. we launched AirCash which provides customers the convenience of having a virtual mobile wallet for cashless transactions such as money transfer. and Celcom Payment Kiosks. airtime transfer. Celcom is now moving towards integrated multi-access and multimedia services. in such a mature and advanced market. airtime top up is the most popular service AirCash supports. which has over 12. Celcom secured a license in 2008. We are hopeful that this ecosystem will be in place in 2013. especially the large population of migrant workers who work in Malaysia and who regularly send their salaries to family abroad. Prepaid users on AirCash can also transfer airtime to other users. Customers can also withdraw their AirCash balances at Celcom branches. check their balance in real time. bill payment. Through AirCash. In 2009. Celcom must offer additional value and services. In practice. outbound remittance from Malaysia is enabled via corridors with two receiver countries: Indonesia. Celcom has also been granted a license to operate remittance services with a focus on international money transfer. Nevertheless. the real innovation may be Celcom’s current plan to integrate AirCash into its larger customer loyalty program. the ability to purchase physical goods. The use of mobile phones makes these transactions fast and secure. view their last three transactions on their mobile phone. Malaysia boasts a strong banking sector and a vibrant economy where the government estimates only 20 percent of the population are unbanked or underbanked. increasing customer interest in mobile commerce offerings. in line with evolving technologies and consumer behavior in the country. and ultimately encourage more utilization and loyalty. Significant Experience and remittance progress on mobile infrastructure conducive to mobile payments coupled with the existence of a robust ecosystem has helped make Malaysia an international and respected Islamic financial center. Celcom Axiata Berhad Currently the largest mobile broadband and corporate services provider in Malaysia and part of the Axiata Group of Companies. To date. where Celcom partners with Globe Telecom. To stand out. and an enabling regulatory environment that grants mobile operators with the necessary permissions and licenses to issue mobile wallets and conduct money transfers. While its uptake is significant. customers can pay for their utility bills and Celcom accounts. customers can deposit money into their Celcom AirCash account from over 1. They can also top up airtime in Malaysia or 10 selected countries where Celcom has partner networks. has been quick to see the potential of mobile payments. where our parent company Axiata’s Operator Company XL operates. making it a pioneer in the market for mobile money services.000 touch points including online channels.Part 4: Mobile Operators: Paving The Way For Mobile Payments And More Expanding Mobile Wallet Capabilities To Encourage Customer Loyalty By Afizulazha Abdullah. AirCash customers can use the service to make outbound remittances. Currently. Currently.

138 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 139 . Celcom has targeted around 10 of the leading online merchants in Malaysia and hope to extend this to include merchants with physical stores as well in anticipation of the variation in the e-money license approval we will receive from the Central Bank this year to offer mobile payments via NFC. We also plan to work closely with credit card merchants or card associations such as MasterCard or Visa this year to enable AirCash as one of the payment sources in their respective networks. users “tap” the NFC stickers on their mobile devices on the terminal at the point-of-sale. In the background. Consumer behavior will also change with time. the terminal communicates with the point-of-sale server. Celcom’s overall strategy leverages our position as a mobile operator to play a central role in the value chain. Afiz was the Chief Operations. it will likely take the same amount of time for mobile payments enabled by NFC to cross the chasm. and are also confident that the subscription of remittance services will increase significantly as a result. Prior. If we consider that online commerce took around five years to take off.000 online merchants use the company’s gateway and we want to enable these merchants to accept AirCash as one of their payment methods. From our mobile wallet to recent NFC trials. these customers have the option to use their rewards and loyalty points to pay at one of the many destinations or merchants that accept AirCash as a payment method. This tap-and-pay approach is an interim solution that allows us to go-to-market with a cashless payment service that is not limited to certain devices or dependent upon a critical number of NFC-capable devices in the market. To enable the actual payments. Some 2. Driving loyalty Celcom sees the AirCash mobile wallet as a key tool in retaining our existing customers. Payment options Payments are a huge part of Celcom’s strategy moving forward.If we consider that online commerce took around five years to take off. Afizulazha Abdullah (Afiz) is Chief Digital Services Officer of Celcom Axiata Berhad and spearheads the development and growth of Celcom’s Digital Services and VAS business by providing leadership and strategic guidance for four business pillars. To this end. we at Celcom want to be ready for it. A key learning from the results of the trials which lasted several months was the importance of reducing the time taken for payments to match the benchmark of credit cards. This is the key reason why Celcom launched a series of NFC trials last year that provides users an NFC sticker for their mobile phones. Celcom is exploring models that provide bonuses to our prepaid customers in the form of airtime credit that is transferred directly to their AirCash wallet. With this in mind. but with just under 30 percent penetration in Malaysia. Achieving ‘platform readiness’ is our main focus because it is the only way to be prepared to drive. Smartphones will no doubt be a big part of this in the future. The end-game is all about building key capabilities to enable mobile payments. The trials involved closed communities of several hundred users including Celcom company employees and local high school and university students. Its convenience combined with the extensive ecosystem of partners we are orchestrating to enable the convenience of mobile payments goes a long way to encourage customer use. or even lead. The aim was to enable seamless NFC payments for food and beverages in cafeterias and school supplies in school shops. an Online Payment Gateway partner and provider of a one-stop online payment service. So far. we have partnered with iPay88. Additionally. it will likely take the same amount of time for mobile payments enabled by NFC to cross the chasm. In a mature market like Malaysia where most people have a bank account. No matter when and how it happens. It is early days for mobile payments in Malaysia and it is important to be flexible and be prepared by enabling the many platforms that enable this service. After this live online connection was made. it is important for us to enable payments on all mobile phones and not just high-end devices. which then communicates to the AirCash mobile wallet. He has over 22 years’ experience in the Information Technology and Telecommunication industry. The key challenge is people – specifically how to boost consumer readiness for mobile commerce. Advanced Data Officer responsible for the data access and VAS/ Content business. Malaysia’s coming cashless society. the amount was deducted from the user’s AirCash account and the payment was completed. Digital Advertising and VAS/Content. Digital Payment. customers have to be convinced that this new way of making payments is better than just paying a bill or making a purchase online or with their bank account card or credit card. Digital Commerce. as smartphone penetration grows and consumers grow accustomed by the ease and convenience of mobiles.

NFC. and much more. competitive advantage comes from getting the mix right in order to develop and deliver an integrated experience that will move the would-be buyer from ’I intend to buy‘ to ’I will buy‘. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION The technology components of a winning strategy are quite clear: your toolbox of capabilities must include messaging. QR codes. mobile apps.PART 5: RETAIL. In this section we draw from real-life examples. and a new best-selling book to show how you must evolve your retail strategy to enable direct interaction between you and your customers to boost loyalty. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION PART 5: RETAIL. leading industry research. 140 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 141 . However.

Today. Mobile shopping applications are also a top downloaded application—right on par with social networking applications. and mobile transactions provide new opportunities for better customization than ever before. the value proposition of mobile payments is in itself rarely sufficient since in almost all cases m-payment systems simply use existing networks such as Visa. Between 2011 and 2012. other social gifting companies such as Wrapp and Boomerang are using Facebook integration to offer similar services (see the October 2012 Personalization is the holy grail of business strategies from marketing to customer service. with roughly 25 percent of consumers now engaged in mobile couponing (see Figure 1). To foster loyalty and curtail showrooming. Why is the mobile couponing trend important? Retailers are looking for new ways to not only engage with loyal customers. we see mobile coupons becoming the gateway to lure shoppers with offers or added value. Mobile couponing provides the value addition that is needed to persuade consumers to divulge personal data. Businesses today need to think locally.PART 5: RETAIL. Yankee Group’s 2012 US IT Decision-Maker Mobile Money Survey. It’s not just about location-based applications. September. 142 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 143 . consumer behavior is revolutionizing the overall retail shopping experience. While Facebook looks to add gifting capabilities to its social network. This technology helps retailers target customers in the physical domain. finds that 56 percent of respondents say personalized offers based on location are a high priority. whereby consumers use their phone in-store to scan product codes and find a better price online. retailers need better insight to determine whether a purchase has been made by a new or existing customer. September shows 41 percent of respondents use their mobile phone in-store for a variety of shopping-related tasks such as price comparisons and product reviews. Three especially hot areas are: Location-based offers. but also avoid ‘showrooming’ . but also geo-fencing—utilizing virtual perimeters for real-world geographic areas. allowing ever more targeted and timely incentives to shop. Yankee Group’s 2012 US Mobile Money Survey. MasterCard and PayPal. then understand how they can best serve that customer moving forward to build up a true relationship to keep him or her coming back. shifting the power from a defensive price-shopping mode to offensive customer engagement. From a retailer perspective. In fact. while 43 percent say they plan to deploy personalized offers using location data over the next two years. consumers using their phone’s camera to scan or use a bar code almost doubled. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Mobile Shopping And Coupons Transform Retail By Yankee Group Largely driven by smartphone growth and greater adoption of data services. Social sharing and engagement. What’s even more interesting is the growth in the number of consumers using smartphones to access product information and coupons.

2 Have you completed the following tasks while physically shopping? 30% 25% 20% 15% 10% 5% 0% Tapping the phone to wirelessly grab information and get more details on a product/service or receive coupons 6% 12% 14% 26% 18% Millions of cellular connections 24% 2011 2012 30 25 20 15 10 5 0 2011 2012 2013 2014 Using the phone’s camera to scan images/bar codes to get more information on a product/service to get coupons Using the phone to receive coupons via SMS or MMS 2015 2016 Future outlook: Mobile retail leverages back-end data to get even more strategic Figure 2: Yankee Group’s global connected view forecast.Consumers increasingly turn to mobile coupons Cellular retail m2m devices will experience strong growth through 2016 Millions Retailers are already rolling out connected ATMs. as well as the retail buying experience for customers. September Mobile Money Strategies Perspective “Facebook Gifts Is No Social-Mobile Savior”).2 27.3 15. Retailers have very little barrier to entry in enabling Facebook-integrated social gifting. The common thread between these devices is a wired or wireless connection used to transfer product or promotional information and transactional information to enhance the retail operation. At the other end of the connection. digital signage.0 12. These create a more engaging experience that lets shoppers use their smartphones to scan items or even store shelves to receive personalized product tips. kiosks and smart vending machines into the brick-and-mortar shopping experience (see the June 2012 Yankee Group report “Reshaping Retail With Connected Devices”). Kiosks and Vending Machines 35 33. PoS Systems. Connected devices. and 2012 US consumer survey. Beyond pure-play social firms.4 22. inventories 144 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 145 . March 2012 Figure 1: Based on Data from Yankee Group’s 2011 US consumer survey. We also see augmented reality mobile apps coming to the fore. and they can readily deliver the goods via their e-commerce or even mobile applications. December. recommendations and coupons. Retailers are just beginning to integrate specialized machinery such as POS terminals. however. we see retailers getting into the social gifting game.4 18. data is then stored and mined for near real-time intelligence on buying patterns.

from 15 million connections at the end of 2012 to 33. we will see not only more adoption by consumers. but also more retailers successfully integrating their personalized offers into cardless loyalty programs. Personalization is the holy grail of business strategies from marketing to customer service. In this example. enhance loyalty and improve care. customers walk up to a kiosk and have the option to interact directly with an agent standing by to exchange information and/or help drive a transaction to completion. inventory availability. But we also see offer-oriented companies including Groupon. enabling them to make better decisions. 146 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 147 . we’ve seen several largescale rollouts of each of these solutions and expect the trend to continue in the future as evidenced by our latest forecast numbers. behaviors and preferences at the right time and right location. allowing ever more targeted and timely incentives to shop. and consumer demand trends. Retailers will start providing special offers aligned with specific customer attributes. personal shoppers and self-checkout. Commerce and Care”). We see low-latency. Key examples include: Social will become measurable. Within the next two to three years. This allows retailers to gather more CRM intelligence about which customers are Devices will become increasingly interactive and ubiquitous. and mobile transactions provide new opportunities for better customization than ever before. Retailers and brands need to ensure back-end systems remain flexible from offer to redemption.Mobile couponing provides the value addition that is needed to persuade consumers to divulge personal data. A broad range of promotion types.2 million connections in 2016. Instead. FUTURE OUTLOOK: MOBILE RETAIL LEVERAGES BACK-END DATA TO GET EVEN MORE STRATEGIC The future will be about measurement and engagement. real-time personalized offers. While we will see these kiosks pop up in fixed locations. NFC. LivingSocial and even major financial institutions such as Bank of America with its BankAmerideals moving toward measurable transactions. the focus will be on how businesses can use seamless execution to differentiate their mobile initiatives and drive revenue. a CAGR of 22 percent (see Figure 2). cardless apps or mobile commerce apps are used. responding to what offers. In the next few years. retailers will continue to build on these early initiatives and move toward streamlining the mobile retail experience. These collaborative kiosks will serve as a robust augmentation to existing retail staff. In the next few years. will give businesses additional opportunities to engage mobile consumers with tools such as cardless loyalty programs. In the past year. integrating an LTE connection also opens the possibility to deploy kiosks in temporary locations such as malls or at festivals. Yankee Group expects a high rate of growth in this segment. the talk won’t be about technology and whether QR codes. Data will be more tightly integrated. Frictionless processes will ease consumer and retailer adoption. Retailers are also looking toward self-service solutions and mobile POS as a way to decrease overall service costs. point incentives and social-networking-based motivations. Mobile loyalty apps with coupons offer the capability of delivering a unique identifier to each specific coupon and/or customer. from first coupon to commerce to care (see the February 2012 Yankee Group report “Mobile Transactions Across the Customer Life Cycle: Coupons. The widespread availability of 4G connectivity will also catalyze the market for digital signage solutions enabled with real-time streaming of advertising content and store/warehouse surveillance applications via 4G connected cameras. we see social intermediaries continuing to muddy the mobile mix with broader offerings targeted toward loyalty. retailers will start tying their various mobile initiatives to their own customer data. increase sales capacity and improve the overall retail customer experience.  Overall. but engaging customers across the life cycle. reach new demographics and provide differentiation at the point of sale. high-bandwidth broadband networks such as LTE integrated with supportive M2M connectivity modules opening the door to new devices such as self-service kiosks that integrate human interaction. In the future. Using mobility improves retailers’ understanding of their customers and the best offers to provide them with competitive differentiation. including local limited-time offers. social gifting. They will realize it’s not about check-ins or deals per se.

As a result. but the customer experience you deliver can be. uncharted territory created by this consumer-led sea-change? This overview will help you plot the transformational path your business needs to succeed in mobile commerce and retail. promotions. and in milliseconds a consumer can sink your brand’s reputation or put wind in your sails and more cash in your sales. but it is being reinvented in the mobile world.PART 5: RETAIL. a customer segment of digital natives that have grown up with technology and the Internet. In the late 1990’s. Are you? As a retailer or consumer-centric company. Taking this approach allows you to discover how people. over 40 years ago. advice. with some achieving this by breaking down the silos to unite store point-of-sale and e-commerce processes. and increase sales with lower risk. SAP Retail Shoppers with smartphones are leading the greatest change in retail since the adoption of the barcode. enabling consumers to buy online and pick up in store. messaging and mobile payments can change how retailers connect with consumers. e-commerce made the industry adapt to selling via new channels. purchase and payment history. they want timeliness. They naturally use their tablet. Customers in this segment not only expect a good experience. and special offers right to the consumers’ smartphone. One approach you can use to map their journey. Commerce call-to-action Reinventing customer loyalty Leading retailers are starting to offer solutions that enable the curb-side pickup of grocery orders placed on a smartphone. build loyalty. Program Principal. But it’s not just an opportunity for retailers. at their request. in their dealings with retailers. inexpensive data plans. Again. They are empowered by the smartphone. empower employees. mobile commerce. as well as cross-channel activities that allow ‘click and collect’. Retailers must. 148 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 149 . How will your business navigate the way in the new. you’ve likely recognized your brand is not entirely under your control. Consumers have more influence and impact on a retail brand than ever before. they also care deeply about our planet and causes. customers do not think in terms of channels. using geo-location. in place of their wallet. and they are willing to volunteer personal There is a resurgence of interest in customer loyalty. the Internet. and the consumer’s declared preferences and interests. information in exchange for value. utilities and consumer products companies are exploring how they can deliver relevant. PC or mobile phone to research and select what they want to buy. and most do not think about the shopping process. most chose to deliver a better customer experience. and social networks. and product availability. the customer doesn’t think in terms of modalities or channels. The smartphone has given shoppers fingertip access to information that can either tarnish your brand or unearth new treasure. transparency. Shoppers have unprecedented. This ‘instant gratification’ is top of mind with Millennials. processes. and expect retailers to operate with as much ‘tech-savvy’ and openness as they do. and systems can eliminate boundaries between the channels and improve your brand experience. People use social networks that span the globe. timely information. Thus. Mobile allows consumers to download loyalty apps to their smartphone. They are connected. and improve your capabilities to satisfy your customers every step of the way is to use a methodology called design thinking to understand how shoppers connect with retailers. They don’t think about how it happens – and they demand it to be seamless. Smart marketers in transportation. Retailers that survived the financial downturn since 2008 got better operationally. but it led to silos and differing visions of how best to connect with the shopper. This is key since the advent of mobility. instantaneous access to competitive pricing. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Opportunity At The Intersection Of Retail And Mobility By Colin Haig. Unfortunately. reviews. replacing the plastic card they have in their wallet. They just know they want to order and pick it up later. Even your existing loyalty programs can benefit by adding this mobile component to extend your brand to the consumer’s phone.

Other solutions with mobile at the center give staff and managers guidance on fast-moving items that need to be reordered. mobile commerce. especially while shopping. It saves hundreds of hours in most chains. and that means greater productivity. and helps eliminate out-of-shelf  and out-of-stock situations. enabling new loyalty programs and ensuring that consumers get quick and helpful answers to their questions in real-time. Many retailers have yet to map out a mobile strategy to engage and enable their store team and the regional and district managers that support them. there is no reason for staff to ever leave the customer’s side to get more information or ask a superior. This has a profound Retail revolution Consumers always have their mobile phones with them. They use it to create better customer engagement supported by highly interactive. Retailers using mobile POS and other in-store solutions are seeing higher customer and employee satisfaction. or know if they even have one on their person. reduces inventory carried. consumers are eager to clean their wallets of plastic cards and look to a day when they neither have to fish them out of their wallets. key indicators and goals. availability. and locations to ensure that the customer gets instant answers and instant gratification. beautiful apps that allow customers to check their account balance. and waiting to reorder until the day’s sales are done. messaging and mobile payments can change how retailers connect with consumers. and all needed information on their tablet. Store staff can use their devices to check stock price. Although the showrooming trend of visiting a store to investigate a product before purchasing online continues. with the inherent security of the mobile network. transaction history. with timely alerts. It also equips employees — and the entire organization — to serve the customer better by streamlining processes. store staff need to be as empowered as the shopper has become. Retailers are using this approach to remind customers of Although the handheld barcode scanner we used to call an ‘inventory gun’ is still commonplace. and the ease of text messaging. With a smartphone. Organizations are harnessing very advanced analytics and a learning engine designed to deliver value to the consumer. Like loyalty cards. potentially combining it with other functionality in a branded app. where retailers can issue a plastic card as a credit in place of cash. Stores love the power of the gift card. We envision retailer credit operations that will harness this as well. Real-time advantage We are also seeing a revolution in POS. insight to the marketer — and mutual benefit. Banks in the last decade have also embraced mobile. 150 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 151 . or promotions of interest. or other handheld. parcels for pickup. empower employees and increase sales with lower risk.The advent of mobility. Mobile empowers consumers to shop on their terms. in part because they are a staple of holiday sales. build loyalty. But mobility isn’t just about making life for the consumer better. Tapping the touch points The use of gift cards are reaching new peaks. Managers can also use mobile to monitor store performance. and the sister concept of returns cards. Of course. is also gaining traction. pride in their work and improved retention. This isn’t about deploying simple loyalty software. Thus retailers can meet shoppers’ needs and encourage sales because the visibility mobile provides shows and confirms products are in stock. This eliminates the drudgery of walking the aisles and counting product. allowing a retailer to deliver stored-value card capability on a smartphone. In some stores today you can use a mobile device to complete a transaction without queuing up at the checkout. best-run retailers are adopting solutions to equip and educate store staff to improve the service and advice they offer customers in the aisle. there is no reason retailers can’t turn this habit of researching products in-store into a new opportunity to connect with the consumer while store staff are at hand to help. prescription renewals. Emerging mobile wallet technology also answers this requirement with convenience. and more. They are also able to maximize sales because mobile functionality provides real-time inventory information anywhere in the store. tablet. Empowered employees are also engaged employees.

David Fisch. thought leadership. the Information Technology team has to make it all and PayPal. Though Facebook’s director of business development. the third largest credit card brand in the United States. a mobile strategy can even help retailers win the war for talent. While one would think that the social nature of shopping today. Foursquare’s crowd sourcing. Facebook’s community building. the director of emerging payments at Discover Financial Services. the issuer of the Discover Card. Nonetheless analysts and pundits forecast that sales of physical goods through Facebook and other social networks is set to jump from US$5 billion to 152 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 153 . CEO of Impact Mobile. You need to build a comprehensive mobile strategy that covers all aspects of your business – from warehouse. Selling requires quick one-liners. has correctly acknowledged that 'social' and 'commerce' are a perfect combination. and work well. or a second opinion about purchases they are about to make. store operations. this success has so far not materialized. high technology and telecommunications. Mobile commerce is primarily about shopper engagement and marketing. However.” To paraphrase Farhan: We need to develop a ‘pickup strategy’ to court the consumer before we can close the sale. when you have the consumer’s attention? How can you connect with your consumer on a fast-moving mobile screen? And how can you move the would-be buyer from ’I intend to buy‘ to ’I will buy‘? Farhan Ahmad. What mobile marketing mechanisms will engage with mobile shoppers and stay connected and relevant all the way to the cash register? Twitter’s microblogging.PART 5: RETAIL. explains that “Mobile payment is a small subset of mobile commerce. and acts as an advocate for retailers of all sizes. through the shop floor. ensuring that Millennials joining the business are much more excited to go to work and aren’t embarrassed by outdated current store technology. Slow Store: A Mobile Playbook By Gary Schwartz. There is only a small window of engagement on a mobile phone. Building a mobile optimized Website isn’t enough. where consumers connect with friends in both the real world and their social networks to get feedback on what they should buy. and Google Offers are all valuable tools. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Store staff can use their devices to check stock price. to the hands for the consumer. He focuses on mobility. impact on staff turnover. but any brand or retailer that is committed to executing a digital strategy across all its customers’ screens needs to establish a direct relationship with shoppers. What’s more. business development. Facebook has not delivered on its promise to leverage its millions of customers to shop cross-channel. Colin Haig is a domain expert for retail industry trends and store strategy with 25 years of experience in store systems. Inevitably. How can you make a value statement within the first few seconds. and locations to ensure that customer gets instant answers and instant gratification. Fast Shopper. would give social networking giants the ability to compete with Amazon. availability.

Read between the lines. trusted relationship. Start it social. But these numbers are hard to swallow. ‘Tap2Coupon’. Google. SMS. it’s key for brands and retailers to cultivate social ties with consumers and start a relationship in the social Web to kick off the conversation and develop a direct relationship with the consumer. Apple — cannot insert themselves between you and your shopper. foursquare. Why is mobile so powerful? Because once a direct. The key is to immediately engage on the mobile channel after the Submit Harness NFC to create new use cases and engagement scenarios: Tag a product or poster to enable ‘Tap2Opt-in’. 1. Opt-in channels can harness an app download or follow on directly from a Website. Activation triggers include 2D barcodes (QR). The possibilities are endless. and direct-frommobile-phone text opt-ins. Even GameStop. scan. not to shop. competitors who want to own the customer — Facebook. As in all marketing. delivering a clear shopping call-to-action that consumers can understand and appreciate). This effort pays measurable dividends. that tried to cash in on community have also failed. Freedom of choice Success is all about activation. They tried to monetize their Facebook community by opening stores inside the social network. the world’s largest video game retailer with over 6. and manual form input. Enabling opt-ins through Web forms facilitates the change from largescreen to small-screen messaging that is closer to the point of purchase and point of decision. Once there is a direct. With so many formats and approaches it is important to understand the differences Here are some tips to guide retailers and brands as they develop an activation strategy to drive engagement — and sales. North American retailers Banana Republic and Old Navy learned this lesson the hard way. The results are even better if the brand or retailer is up front about the value exchange (that is. voice. Click The Web is probably the most logical place to start for most brands. and take steps to develop mobile as a targeted and personalized communications channel. shoppers should be given a choice of channels. keep it direct Clearly. shut down shop after six months. as an on-shelf call-to-action. ‘Tap2Web’. the products themselves are part of the picture. the brand or retailer can refine how it uses mobile. it offered comparison shoppers several activation channels: MMS. In other words. permission-based relationship is established between a shopper and a brand or retailer. ‘Tap2Shop’. This is where the mobile channel excels.US$30 billion by 2015. the benefits to the consumer when they agree to opt in and receive messages/offers) and clear about the expectations (that is. it cannot be disintermediated. When Amazon. But that is precisely the point: it must be direct. After underwhelming results they shut their virtual doors.600 stores in 15 countries worldwide and online and more than 4 million Facebook fans. improving brand recall and conversion rates. Facebook folk are there to meet and socialize. and it’s 154 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 155 . as it extends their existing consumer relationship management (CRM) opt-in and offers shoppers a choice of channel. including Nordstrom and JCPenney. Increasingly. as the only two-way method of communications (and more) that allows companies to connect with the shopper across all the retail touch points. clear that activation needs to be on the shopper’s terms and accommodate all the channels the consumer has at their disposal. Other retailers. tapping NFC tags. com designed its Price Check app.

Text complements email by providing an actionable reminder that reinforces the email blast. newspapers. The only caveat about this messaging channel: it has an in-built limitation of sorts. the long-term goal is to move shoppers to a two-way opt-in relationship. and a scan on the part of the consumer using their smartphone moves the shopper to the Web. which will enable tap-to-buy activation via any media. Samsung’s NFC TecTiles. Significantly.button is pressed. 4. Augmented reality (AR) is an extension of this technology. This technology allows consumers to take a photo of a product or advertisement and send it to a cloud-based service that recognizes the image and sends back an offer or communication related to the product. which is where the platform provider calls the shots. Surveys show that a whopping 74 percent of smartphone users use SMS.) Mozilla (Firefox) and Linux (Tizen) are going head to head to capture next-generation developers with their WWeb-based operating system. does it detract from your effort to drive your product and services? 3. Text messaging is native to the mobile phone — all mobile phones — and enables brands and retailers to deliver a ‘rich content’ relationship with shoppers that can drive brand loyalty and measurable sales. are the first step to what I refer to as ‘CommerceTiles’. circulars and flyers). And many in the industry are politely waiting for Apple to include NFC into their next handset launch. Harness NFC to create new use cases and engagement scenarios: Tag a product or poster to enable ‘Tap2Opt-in’ . is a just an anonymous click meaning you cannot know who the shopper is and you have no opportunity to reengage with this potential customer. The in-app alert is tied to the mobile app. Mobile-Web tools will allow retailers and brands to increasingly use WWeb-based HTML5 applications and not rely on mobile apps for their consumer engagement. there are substantial barriers to consumer adoption. Without opt-in. Scan 2D barcodes. for example). ‘Tap2Coupon’ . this 156 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 157 . ‘Tap2Shop’ . If you want to move the shopper directly to the mobile and view the sign-up page. In-app push notifications are often viewed as being similar to text messages because they emulate the SMS function on a phone. which automatically limits the size of your consumer audience to smartphone owners. The possibilities are endless. While we wait for Google Glass to become a mainstream add-on to our eyewear. An alternative activation channel that also requires a scan is image recognition. Think of tap as a more frictionless scan. Handset penetration has a way to go. ’Tap2Web’ . The biggest marketing hurdle is that most AR solutions require a bespoke application. and use text messaging to mobilize existing promotions and engagements that lead to purchase. Tap Near Field Communication (NFC) is native to newer Android smartphones in the market. They’re cheap and easy to implement. In many cases you need to educate the consumer to download your mobile app first or force them to use your application as a visual interface which is buried behind many mobile clicks and swipes. This will encourage the shopper to grant permission for you to continue interacting with them. If the phone owner deletes the app then you have lost this relationship with the consumer. Thus. However. (For a good example of this. but it also has huge applications around proximity marketing. Focus on driving text-based opt-in to a monthly or weekly subscription with brand loyalists. enabling contactless marketing that does not require an app and is native to the handset — keeping the consumers always-on and always a tap away from activation. also called QR codes. go to www. which allow consumers to program stickers with phone commands. are showing up on paper media (magazines. enabling more virtual interactivity and animation around the image recognition technology. So ask yourself: If you are required to spend marketing dollars to drive an application download. 2. make sure you enable messaging opt-in on the landing page when they arrive. To date NFC seems to be all about payments. presenting a possible way for companies to bridge the physical (paper) and digital (Internetworlds and inject new dynamism into old media (TV commercials. one that is (presently) not standard or native to the mobile phone. the two direct marketing channels — text and email — also work very well together. What you see is what you get? It’s not quite that simple. as opposed to email at 14 percent. The challenge is around building a critical mass in the marketplace. Text Text messaging is the only two-way communications channel that has widespread adoption. the relationship behind the alert is owned by Apple or Google. maccosmetics.

While the relationship is not two-way. Twitter is a more of a microblogging channel that addresses a generalist community. are achieving up to 10 times the conversion rates associated with email coupons. Apple’s Passbook. the In this scenario NFC. for example. Figure 1. depending on the bricks-and-mortar point of sale (POS) or online redemption mechanism. tap coupons will also be a viable. Finally. Once a brand or retailer has acquired a shopper’s opt-in. Perhaps the best activation strategy is to create an activation ‘dashboard’ that enables shoppers to enter into a relationship with your brand or store on their terms. and vouchers into a super app. Additionally. on the other hand. As contactless wallets reach critical mass in the near future. and location. SMS coupons. All activation channels can be serialized and tracked back to the media location to enable the brand to affiliate identify the store. always-open customers. This allows for all your traditional media assets. SCAN SCAN SCAN TEXT MAY761 UTEXT (8398) TO TEXT MAY761 UTEXT (8398) TO TEXT MAY761 UTEXT (8398) Reduce friction to reap business benefits Perhaps the best activation strategy is to create an activation ‘dashboard’ that enables shoppers to enter into a relationship with your brand or store on their terms. TO and tracked and become what I refer to as an ”offline interactive” strategy. Simple activation and conversion strategies continue to deliver amazing results. the push notifications appear out-of-channel and can often become lost in the bevy of service notifications. Twitter is a very effective communication tool but can confuse the messaging strategy belonging to your brand or store. more seamless option. QR codes and text can be combined into a single call to action. Based on data from the author That is why. media. ticket or voucher into the Passbook. These deals can be multiple-use or single-use. It allows brands to send a message to the phone with a ZIP file (digitally signed and blessed by Apple) that inserts a dynamic coupon. TAP TAP TAP content can be updated seamlessly by the brand and drives commerce activity. It has aggregated coupons. Offers sent to shoppers’ mobile devices are consistently three times as likely to be redeemed as the same offers sent to a shopper’s email address.Activation dashboard off any media. the brand or retailer can close the circle by providing SMS offers and deals with embedded trackable URLs so they can see the results for themselves. But don’t think you need to jump in firing on all cylinders. MDF (media development funds) and products to be activated 158 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 159 . it can profile the shopper based on geography or call-to-action. In the case of Android. tickets. in July 2010. It can run mini surveys to hone and deepen the customer relationship. is an interesting hybrid. Google’s YouTube jettisoned its Apple-bound phone application (and nascent community) and moved into the phone’s mobile browser. Think of text is an activation channel for your targeted.

Schwartz has been at the frontlines of the mobile industry for over a decade and is the author of two books including The Impulse Economy. he has helped retailers leverage mobile technology to advance their marketing goals. But it’s not just retailers like Hot Topic. SAP By creating a frictionless small-screen experience for the shopper. Slow Store: A Guide to Courting and Capturing the Mobile Consumer. 160 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 161 . let’s begin with an examination of the mobile commerce use cases that are relevant to your business. Retail Mobile Lead. But be careful not to get distracted. So. for example. Gary Schwartz has been named the Mobile Commerce Evangelist of the Year 2013. Hot Topic believes that adding mobile messaging to existing CRM / email marketing programs can produce a significant return on its marketing investment. the principles of loyalty marketing remain the same. Web Debate By Panagiotis Papadopoulos. NFC — these and more can and must belong to your toolbox of capabilities. In 2011. Your strategy must be customer-focused first. So. in many cases taking the hassle out of researching products and inputting data to complete the transaction. As technology changes. not just technology. Fast Shopper. To get to the real answers you need to think about what your customers really want out of their mobile commerce experience. Article inspired from insights contained in Gary’s new book. or overwhelmed by technology. should a retailer build mobile apps into their arsenal of capabilities? Or should they focus efforts on ensuring their mobile Web presence is optimized to remove the friction from finding and buying online and on the move? It’s not a case of ‘either-or’. Schwartz is also a chair at emeritus mobile for the Interactive Advertising Bureau and the Mobile Entertainment Forum NA. Indeed. Messaging. commerce is about customers. Get ready to evolve your strategy to enable direct interaction between you and your customers. However. We see the same strategy deployed by My Starbucks Rewards [See article: "Starbucks: A Mobile Payments Case Study"] by using a clear SMS activation channel on its push advertising. allowing retailers to address the needs of all their customers. Hot Topic concludes that mobile messaging. one that has spread to mobile commerce. A heated debate rages in the industry. mobile-optimized Websites also have many advantages. A closer examination of the components key to delivering an integrated experience to customers shows that a successful approach is one that uses mobile apps and the mobile Web in the right combination to make shopping across all channels seamless and personal. and the discussion around it. From the customer perspective. not just smartphone owners. CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Survival Guide: Evaluating The App Vs. misses the point completely? After all. check prices or put together shopping lists at the moment of inspiration. The avalanche of mobile apps have indeed whet consumers’ appetite for apps that can assist them every step of the shopping journey. deployed in addition to email. The customer must be your starting point. specialized in music and pop culture inspired fashion. allowing them to make orders. Hot Topic managed to generate nearly ten times (!) the incremental sales off its loyalty community by leveraging the mobile channel. national retailers such as Hot Topic. mobile apps. and so does the requirement to court the customer with care. Mobile apps vs. have repeatedly harnessed mobile in the mix to achieve measurable increases in store-based and cloud-based checkout. increases overall purchase intent and activity. the mobile Web experience also provides additional comfort (user-friendly and familiar interface) and confidence. But could it be that the question. mobile Web is the topic of heated debate in the industry today.PART 5: RETAIL. As president of Impact Mobile for the past 12 years. QR codes. especially during holiday marketing efforts.

   162 163 . To better understand the benefits and how retailers can apply them to enhance the overall commerce experience let’s compare some of the key capabilities associated with mobile apps and mobile Web. The advance of smartphones has made mobile apps very popular among consumers. Based on data from the author There are three basic scenarios. It is also the one channel retailers must get right to deliver a true omni-channel experience to their customers. offers. where each supports the other and both benefit in the end. there are many good reasons to suggest that mobile apps and mobile Web live in kind of symbiosis. Significantly. Finally. •• Development costs to build a mobile Web presence are less than investment needed to design. •• Native apps access features and functionality deep in the hardware (such as location) as well as use offline data. a use case I call the 'order to home' scenario. the third scenario is where consumers interact with brands.Hence. let’s apply observation to the apps vs. all these scenarios have one thing in common. coupons or just fun content related to the physical object. •• The user experience offered by a native app is far more consistent (and smoother). manufacturers and marketers in-store using their mobile phone. when the customer uses mobile to order ahead and then pick it up later in a physical bricks-and-mortar location. However. the advance of the mobile Web and the arrival of HTML5 offer their share of business advantage as well. develop and distribute a mobile app — and there is no need to worry about updating the app to keep in step with frequent changes in devices. Weighing the Benefit of Apps and Web Order to home •  Based on existing e-commerce •  Adds usage of mobile capabilities. often described as 'scan and pay'. whereas the scenarios I mentioned can be powered by mobile apps. In this case. signage) together in one integrated experience. Figure 1. Store pick-up •  Access of products and availability in stores •  Set an order for pick up •  Alerts for pick up readiness • Extension to up-sell/cross sell in stores Scan and pay • Check in stores • Self-scanning and Self-checkout • Payment in store • Offers in real-time and contextual based • Signage • POS integration Prepare for the mobile journey So. An example of this is the 'store pick-up'. They show that mobile by definition is the only channel that has the capability to connect all the other channels that retailers operate (online. scanning. consumers use their device to scan a barcode to access information. harness the unique capabilities of mobile. operator systems or user requirements. Web debate. offline etc. Hence. mobile Web — or both. This is especially true for commerce. where each supports the other and both benefit in the end Mobile connects commerce in-store. as I will show. The first scenario is all about finding ways to extend online commerce into mobile commerce. The second scenario is where fulfillment is made in the store. Smartphones have unique capabilities and retailers should carefully evaluate them in order to make the best use of the features and functions built into the mobile phones customers have at their fingertips. thus delivering benefit and value to shoppers on the move. Mobile apps. there are many good reasons to suggest that mobile apps and mobile Web live in kind of symbiosis.

Consumer surveys suggest that some customer segments, like Digital Moms, mobile-savvy mothers on the move, appreciate the convenience of an app to check prices and offers on the go.

Mapping the best approach Mobile app or mobile Web? The decision also depends on the use case. A raft of recent research and consumer surveys from companies like comScore, a premiere provider of audience analytics, and Flurry, a mobile app analytics company, suggests that some consumers might have a preference depending on what they want to accomplish. Specifically, Internet users tend to favor mobile Web for shopping and searching. Mobile apps are popular when the task at hand is related to maintaining data, navigation and socializing with others. With this in mind, many retailers drive mobile commerce by cultivating a strong presence on both mobile apps and mobile Web. Indeed, recent research from companies including Acquity Group1, which measures ‘mobile readiness’ across major retailers shows the race is on, with respondents revealing they are determined to build a mobile Web presence, supported by a mobile app offer, by end-2013. Why both? To satisfy the customer. Consumer surveys suggest that some customer segments, like Digital Moms,

mobile-savvy mothers on the move, appreciate the convenience of an app to check prices and offers on the go. As a result, many customers view apps as a utility, one that complements their mobile Web experience, but doesn’t replace it.

Indeed, a mobile app, because it is on the mobile device and can tap into key phone features, helps cement a closer connection between the retailer and their customers, and thus encourages loyalty. In practice, the offline use that the mobile app allows also provides customers a unique and fluid experience. In other words, this feature makes it possible for consumers to shop in places where connectivity is not available, or in-transit, where coverage is not always reliable. A mobile app experience also respects the role of the consumer in deciding when and how they want to shop in the first place. The consumer must have the flexibility to decide the suitable moment to shop — and have the option to pause the process (perhaps to start the morning commute) and then continue at a more convenient moment. To close the loop a mobile app should also enable the consumer to make an order on-the-move and select the right time slot for pick-up or home delivery. Convenience is key here, and retailers are well advised to support an experience that puts customers in control. It is no secret that

many retailers are missing out on the mobile opportunity. But the endgame is not just about enabling mobile commerce; it’s about encouraging lasting customer loyalty. Panagiotis Papadopoulos has more than a decade of experience in the Retail sector, working with global retailers helping them to define and implement their mobile strategy to enable mobile commerce as well as employee -facing scenarios. At SAP he is responsible for product catalog, e-commerce, mobile commerce and SAP’s Mobile Platform.

Climbing the transaction trail Connect the dots, and the ideal mobile commerce journey starts with a mobile optimized Web presence, one that is open to all consumers, not just smartphone users, and also meets the needs of the more traditional customer demographic that prefers to shop online. This should be closely followed by a more personalized experience, best delivered by a mobile app. Perhaps the biggest advantage of an app is it’s in-built ability to make the best use of device features including the camera, GPS (for location and the delivery of location-based services and offers), WLAN (for Internet access), accelerometer (which detects motion and gesture) and data storage (allowing consumers to save all the information related to products and shopping that matters to them).

164 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 165


Mobile Retailing 2.0: Connect With The Customer At The Point of Decision
By Mickey Haynes, Global Principal, Mobility Solutions in Retail at SAP

Consumers now expect, even demand, personalization. The aim of Mobile Retailing 2.0 is to leverage mobile and enable personalized shopping experiences that build customer loyalty and drive relevant content to customers at the point of decision. Since the point of decision is usually in the actual store for brick-and-mortar retailers, the key focus of Mobile Retailing 2.0 is to enable the in-store shopping experience via mobile devices. A day in the life of the average consumer shows how retailers can realize the full potential of the greatest marketing tool ever invented to win the battle for the customer and get the edge on online rivals in the process.
The mobile strategies that retailers have been using have not proven effective at capturing loyalty, boosting sales, or

combating showrooming. Many retailers start in mobile commerce by optimizing their online websites for mobile, others develop a mobile app. In both cases the result is the same. They are mobilizing the e-commerce channel. I refer to this stage as mobile e-commerce, or Mobile Retailing 1.0. This strategy fails to leverage the many advantages brick-and-mortar retailers have over their online counterparts, such as physical stores, showrooms, employees, inventory, and distribution networks. Most of the benefit of mobile commerce will be realized when shoppers are using devices while they are in the store, at the point of decision. But very few retailers have built mobile apps that are designed for the in-store experience. What if retailers could add the digital recommendation power of, say, Amazon. com, to the in-store shopping experience? This is what I call Mobile Retailing 2.0. By adding digital commerce to the physical store through a mobile device you can deliver a highly personalized in-store shopping

experience. This approach will help retailers to improve customer loyalty, increase sales, and compete with online retailers. The following scenario is an example of Mobile Retailing 2.0 in action. It combines digital commerce capabilities with the power of the physical world by adding highly personalized mobile in-store shopping. With Mobile Retailing 2.0 this routine is already becoming reality. Wal-Mart, for example, has already begun allowing customers to use their smartphones to pre-scan items and upload them to the self-checkout.

The problem with apps is that customers are bombarded with apps to choose from. Once they do make a choice they must manually download them. Naturally, customers are inclined to keep only their favorite apps on their phones. Put simply, customers don’t want to download 100 different apps from 100 different retailers. In many cases they will only download the two or three apps from the retailers where they shop most frequently. And they certainly do not want to re-enter their credit card and personal data several times in every app. Mobile websites are effective at reaching the masses because customers don’t have to download an app to access them. However, the experience of the mobile Web falls well short of reaching the objectives of Mobile Retailing 2.0. So how can a retailer build something with the complex capabilities of a mobile app, but still manage to make it extremely easy for a customer to discover and use, even if it is the first time the customer has entered the store?

Make way for the ‘Super-App’ Unfortunately, there is still a major hurdle to getting Mobile Retailing 2.0 capabilities in the hands of the customer. After a retailer has developed the infrastructure and a great Mobile Retailing 2.0 app, they launch the app on the marketplaces to find a few months later that only a few customers have downloaded the app. Even fewer end up using the app on a regular basis. Has the retailer wasted time and money?


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


Most of the benefit of mobile commerce will be realized when shoppers are using devices while they are in the store, at the point of decision.
Even if customers do not want to download many different apps, they would likely download a single app that helps them shop at many different retailers. Conceptually, if there was a single app that had a standard API for Mobile Retailing 2.0, many retailers could then build to this standard and publish to the single app. The single app would recognize the store that the customer is in and launch the mobile app, or storefront, for that retailer. This concept is called an app-within-an-app, or a Super-App. The Super-App concept would normalize and standardize the unexciting, routine shopping functionality like adding items to a shopping cart, displaying offers, and paying for items from a mobile wallet. Retailers could differentiate themselves by creating their very own experience and maintaining their own brand. To achieve this they could develop custom components through extension points within the Super-App. Retailers would then have complete control of the customer experience while the consumer is in the retailer’s mobile storefront. Real-time retailing in the store, at the point of decision, will enable brick-and-mortar retailers to maximize their advantages in the physical world to compete with e-tailers and other competitors. This is Mobile Retailing 2.0. The best way to deliver this is to develop a standard platform for retailers to create a Super-App together. Software companies and partners will develop this with them to spread the investment across the industry. Mickey Haynes leads business development globally for mobile in the Retail and Consumer Products industries at SAP. In this role, he consults with key global Retail and CP customers to develop mobile strategies, architects mobile solutions with internal and partner development teams, and evangelizes strategy within SAP. Previously, Haynes was the Principal Mobility Architect for The Home Depot, the fourth largest retailer in the U.S., where he initiated the mobile commerce program and led the enterprise-wide mobile strategy.

Mobile Retailing 2.0 in action

When Mary enters the grocery store, her mobile device reminds her to launch the store app. She is rewarded with 100 loyalty points and receives a few personalized offers based on her preferences, buying habits, and trends. Mary reviews the store specials and adds a few items to her shopping list.

As she walks through the store to collect the items on her shopping list, the app guides her from item to item like a GPS device. She taps each item with her phone before adding it to her cart, which builds her electronic checkout list. Occasionally, the app reminds Mary about things she needs, or lets her know if there are special deals on items that are related to the ones she is buying.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Showrooming.PART 5: RETAIL. it still struggles to compete in a world dominated by Amazon. The first states that showrooming will single-handedly bring about the demise of the retail store. There are two schools of thought about showrooming these days. which Mary appreciates and adds a bottle to her cart. the app reminds Mary about things she needs. or lets her know if there are special deals on items that are related to the ones she is buying.that mobile phones help shorten the time it takes to do comparison shopping.rsrresearch. The only thing that is different is the speed at which it is happening . www. and another 13 percent completely When Mary completes her shopping. The Impact of Mobile in Retail. Tim. she pays with her mobile device and does not have to wait in the queue at the POS. and then provide a few thoughts on how retailers can respond to the showrooming threat.1 According to our pricing benchmark survey respondents. She chooses to pay with her store gift card which is very convenient and earns her extra loyalty points when she uses it. 88 percent of our retail survey respondents reported that staying on top of how consumers use their mobile phones while shopping is a top-three business challenge for them . and credit cards are stored in her mobile wallet. Mary heads to her car without ever going through a checkout line. 32 percent say they haven’t seen showrooming happen in their stores yet. it’s just gotten more efficient. The second school of thought points out that Best Buy has stepped to the fore in embracing showrooming not as a challenge. Supporters of this theory look to Best Buy as the prime example of a retailer about to be brought to its knees by showrooming .com /2013/01/10/the-impact-of-mobile-in-retail/ Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 171 170 . in the same survey.the highest response by far of any option on the list. So my goal here is two-fold: to lay out what I know about the trend. Managing Partner. but as an opportunity. All of her coupons. loyalty card. Tim notes her comments on his mobile device and suggests a couple of other options.for a retailer that has outlasted the demise of CompUSA and Circuit City stores. 52 percent of respondents also reported that they believe consumer use of mobile phones influences less than 25 percent of the shopping that happens in their stores today. RSR Research. January 2013. Deconstructed Occasionally. FOOTNOTE While I agree that showrooming has always happened (we used to call it ‘cherry picking’). Based on data from the author 1. when it can be done on a screen in your hand rather than via a day’s worth of trips to a bunch of stores. greets her by name and asks her how she enjoyed the wine she bought last week. RSR Research When Mary walks near the wine section. By Nikki Baird. She receives a digital receipt that is automatically uploaded to her personal finance software for budgeting and tracking. The behavior hasn’t changed. Figure 1. a store associate. Supporters of this theory say that showrooming has always happened in retail. Context In RSR’s benchmark survey on mobile in retail. However. I also believe that the practice is having an impact on retail in ways that the industry has not fully anticipated or accommodated.

merchants for years have averaged their margin across categories or lines so that they can maximize their selling opportunities. ShopSavvy reports that only 30 percent of first-item scans in their app are transacted outside of the current store the shopper is standing in. she’ll pull out her phone and start comparing be published April 2013.some see it as a threat. and of that 30 percent. and how much that might ultimately hurt them. 1. and these have a much higher likelihood of converting online.particularly the online aspect . to be published April 2013. or continue to maintain channel-specific pricing (23 percent). 0% Figure 1: Based on data from RSR's 2013 Pricing Benchmark. The majority of respondents either ignore price conflicts completely (43 percent). If a consumer doesn’t trust that the retailer is looking out for her best interests.The irony is that store-based retailers don’t lose out to showrooming . RSR’s 2013 Pricing Benchmark. Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 173 . Reported by Alexander Muse at RIS News’ Cross-Channel Retail Executive Summit. it comes down to trust. 172 FOOTNOTE 1. The problem is that both of these mindsets lead to responses that don’t help either the retailer or the consumer .as often as they might think. Retailers complain all the time that stores have a different cost structure than online. ignore any price comparisons that happen in their stores. how do you think that makes a store shopper feel? And if they can’t trust you to get them a good deal within your own channels. so they have to price differently to accommodate those costs. Only 15 percent of retailers in our pricing benchmark report that they maintain one price across channels as a response to consumer price comparisons. only 13 percent fall on their swords and price match. October 2012.3% The irony is that store-based retailers don’t lose out to showrooming .particularly the online aspect .0% 10% 20% 30% 40% Avoiding Pandora’s Box So how do store-based retailers avoid that first scan. the one that opens up the whole basket to showrooming? First of letting the sale walk away in the case of those who choose to ignore it. What is your policy for responding to mobile price comparisons in stores? It’s a Matter of Trust Either way. while 37 percent strive to be ‘competitive’ . 2. When your primary showrooming competitor is your own online site.3% Price match 13. What is distressing is that most retailers don’t seem to realize how often they break their customers’ trust. To me. and others just don’t see it FOOTNOTE at all.half of those won’t typically convert in the current store. how long do you think it takes them to think they’d better check around to see how others compare? Be ‘competitive' 36.7% We haven’t seen it yet 31. maintain consistency in pricing across channels.1 Beat it 5. And yet. October 2012. retailers are missing out on the driving factor behind what compels a consumer to showroom.7% Ignore it 13. Reported by Alexander Muse at RIS News’ Cross-Channel Retail Executive often as they might think. about half accrue to another local store .not online. or panicky price matching or erratic policies that vary from store to store and customer to customer from those that fear it. retailers seem to be of two minds about showrooming . Where online retailers make the most competitive inroads is on the second item to be scanned .1 (Figure 1) Thankfully. Just like industry pundits.

CONSUMER PRODUCTS: MASSIVE OPPORTUNITIES AT THE INTERSECTION Consumer Focus Key To Closing The Mobile Commerce Loop Channel-based pricing is channel-based thinking in a world where consumers don’t care about your channel constraints. This article will explore these topics. Senior Director. Chief among these is the search for solutions that will provide a solid foundation upon which retailers can build a successful consumer mobile strategy and effectively close the mobile commerce loop. but no one will keep those shoppers for long (as even Wal-Mart. Yes. predicting the unfortunate phenomenon will cause a drop in sales and — more importantly — a decline in customer get ratings and reviews. has found in competing with dollar stores). influencing factors is the first critical step towards addressing the key dilemmas and questions facing retailers. the less likely she will be to turn that phone against you. but inconsistency across channels breaks consumer trust . a market intelligence firm providing insight into the retail industry’s business challenges and technology investments. Second. As a result. Most retailers these days offer a much larger assortment online than in stores. For the rest. and only the most careful retailer can make their margin objectives while serving the cherry-picking customer. SAP Gaining an understanding of consumer trends. making them more informed and it going to be pointed to your site. This is probably the number one reason why consumers pull their phones out to begin with . this is where the cracks in the customer experience become chasms and the retailer will lose. showrooming has become one of the biggest challenges retailers face today. Many retailers are preparing for the worst. or to Amazon.about your product information.PART 5: RETAIL. Again. where do you want her to go? The phone is going to come out at that point . This is as much a break in trust as pricing inconsistency. be proactive about your online assortment. consumers can understand those for the most part. providing useful recommendations for organizations whether they are just 174 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 175 . Finally. The mobile explosion has taken the retail world by storm. as retailers begin to create a sound mobile strategy they also face many questions and challenges. the game is lost. and yet few do a good job advertising that larger assortment at the shelf. Nikki Baird is a managing partner at Retail Systems Research. what some Millennials have started calling ‘the Google of product search’? A simple sign with a QR code can save the day and the sale. the low price leader. if the phone is going to come out anyway .and in a context that has nothing to do with showrooming . the phone comes out and the comparison shopping begins.and as soon as they don’t trust you to help them. But if that’s not meeting her needs. What will distinguish these leaders from the long list of also-rans in retail? Their singular focus on architecting comprehensive omni-channel strategies focused on: • Attracting and retaining customers • Gaining wallet share and growing revenue • Increasing customer engagement and boosting loyalty However. When a retailer only has three toasters on the shelf. challenges.where do you want that shopper to look for the information she seeks? Your site? Or Amazon’s? And once she gets to your site. there will always be shoppers that cherry pick the best prices from the lowest-cost providers. Innovative retailers will turn a problem into an opportunity.and transparent . Mobile Application Solution Management. Run channel-specific promotions if need be. Consumer Mobile. It has empowered consumers. what will she find? The easier you make it for her to trust that you’re there to help. This article provides some guidance as retailers embark on their mobile journey to accelerate revenues and deliver customer value. be proactive . If a shopper goes to your site and finds the reviews next to a lower price. By Rakesh Gandhi. the vast majority of shoppers. showrooming is much more about trust: can your shoppers trust you to provide them with the best information alongside a good deal? If they can’t find that even within your own channels. using mobile to equip their stores and empower their staff to deliver an omni-channel experience personalized to each customer. their tendency is to want to push those toasters on the consumer standing there.

According to a 2012 Ericsson Mobility Report1. However.comscore. or are looking to take their program to the next level. Put another 1. that help find more information about products and options. Mobile is not just another bubble For mobile shopping and commerce 2012 was a decisive year. coupons based on personal needs •  Supports a superior shopping experience. for example. promotions and coupons based on shopper buying habits and preferences •  Harnesses other factors. allowing organizations that harness mobile for this purpose to achieve massive improvements in campaign click through. Meantime. It was marked by a flurry of activity as several retailers started leveraging mobile commerce to engage consumers. comScore. it would appear that many companies are failing to realize the full potential of mobile to reach and influence their target demographic.pdf 2. the advance of smartphone penetration and usage is driving a sea change in consumer attitudes around mobile commerce and shopping. research firms stress that mobile can make a huge difference.S. etc. perform shopping activities (research. they only use the apps that offer value. reach to their mobile phones to FOOTNOTE Mobile drives brand loyalty and revenue Mobile with targeted marketing offers a solid ROI toward brand marketing and sales. compared with only around one third of handsets for Middle East and Africa and Asia Pacific.A good mobile app incorporates the following simple features. by 2018 almost all handsets in Western Europe and North America will be smartphones. the report revealed mobile data traffic doubled between Q3 2011 and Q3 2012. Indeed. brand image and adoption for the retailer Figure 1: Based on data from the author jumping into the mobile fray. Predictably. make product recommendations. including location. in its 2012 Mobile Outlook report2. product information. offers. and money for users and helps drive Future_in_Focus Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 177 176 . social research. over 60 percent of best in class companies (companies already using mobile marketing) aren’t yet using customer behavior information to target and segment messaging throughout the mobile channel. In addition. pay for purchases and collect points/perks at checkout Provides personalization features •  Offers best-suited products. Provides value and convenience •  Saves time during shopping by assisting users to find products in store. read reviews. www. and present products. www. to deliver contextual relevance •  Draws from profile and other information to understand user needs. The numbers speak volumes. research firms reckon mobile commerce transactions will reach impressive heights by 2015. saves time. one that is welldesigned and intuitive — and which adds value. Mobile apps also play an important role in the daily journey of the mobile shopper. While reams of research show that consumers may download dozens of apps. make purchases while in store. literally at their finger tips •  Provides easy and collaborative way to plan shopping with family and peers • Eliminates need to carry coupon clippings Provides relevance •  Surveys show vast majority of online shoppers prefer retailers that use personal information to improve the shopping experience •  Boosts the store experience (an area where online retailers can’t compete) •  Enables shoppers to access assistance. found that more than half of smartphone users in the U. often in the form of smart personal assistants and smart associates. Against this backdrop.

digital receipts. raise brand awareness. The key building blocks for a successful mobile-first strategy Consumers have multiple choices where they shop. Engage with the consumer. market. For marketing and sales. consumers are more likely to buy from retailers that offer a good mobile app. social ratings. when the customer is in your store and considering a purchase decision. This means making sure key capabilities — such as mobile shopping. in-store product scan. and with their smartphone device. consumers are well informed or have tools and access to carry out research prior to shopping in a physical store. Delivering this utility helps drive purchase decisions and encourage ongoing interaction and loyalty. A successful consumer mobile strategy is the one that takes the following four strategy elements into account: Market to the consumer. in-store. allowing retailers to analyze consumer insights and behavior in real-time. POS integration. This means integrating key capabilities that enable a smart shopping list. one common thread running through all these strategies is the desire to leverage consumer mobile trends to drive revenue. this approach must be supported by a holistic mobile strategy to effectively engage. a phenomenon that highlight the importance of a key question: ‘How can retailers turn the tide to attract consumers to retailers. access to product information. place order. and coupons that are based on shopper in-store location. planning. it supports their efforts to drive agile and innovative marketing programs. as well as when they are in the premises. and past shopping behavior. Build consumer awareness by providing personalization with relevance. mobile loyalty. preferences. personalized and relevant offers. ranging from super markets and hypermarkets to fashion outlets and specialty boutiques. shopping cart. drive loyalty. a proper strategy has a lot of moving parts — all related to the target customer audience. Also. The behavior is driving showrooming. what is also described as “moment of truth” . Consumer Intelligence. and transact with mobile consumers. and wallet features. in this day and age. Collect and integrate real-time data and insights into consumer behavior to drive new programs — and evaluate their effectiveness — to help drive sales and high performance. 178 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 179 . and achieve sales ROI. a personalized product catalogue. the fourth strategy element is essential as it is aligned with mobile’s ability to capture consumer data. However. in its own special way. Strengthen relationships. Examples of this are personalized product recommendations. store pick-up or home delivery — are supported. Put another way. Each caters to its own unique consumer segment. This is no doubt the fastest way to offer a mobile access and represents a relatively good first step. shopping and post shopping will be most appreciated and valued. drive personalization and gain wallet share?’ Many retailers have adopted a simple path to optimize their e-commerce Websites for mobile devices. They also provide a checklist for retailers creating strategies to assist consumers at the most critical stage of the journey. The retail industry is broad and is made up of shops of all types and sizes. drive loyalty. Finally. mobile payment. reduce engagement cost. These four strategy elements signify the importance of closing the loop of mobile commerce to provide a compelling and immersive shopping experience. the nature of business and the brand marketing objectives. However. a proper strategy has a lot of moving parts — all related to the target customer audience. Transact and self-service. the nature of business and the brand marketing objectives.way. It is here that your efforts to assist in planning. and improve brand image by providing the consumers with tools for shopping research and Put another way. Use the convenience offered by mobile commerce to provide consumers the ability to shop anywhere and anytime: out of store.

Thus the key success factor for marketing and sales departments at retailers everywhere will be to develop and drive a well-defined mobile strategy that provides an immersive. He has over 20 years industry and business process knowledge with Retail. including mobile Web and mobile apps. TCO is a major concern especially when it is imperative that the complete experience. The right mobile platform should be able to offer the following key capabilities: Rapid change and innovation. 180 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 181 . Expect it to be an integral part of a comprehensive channel strategy for retailers. it’s a fact. Moreover. Most retailers have a myriad of backend systems and multiple channels for interacting with consumers. to help realize the consumer mobile vision. Pursuing an omni-channel strategy that grants mobile a central role in the mix allows retailers to drive agile mobile commerce solutions that meet — and exceed — the requirements of retailers for operational excellence and the increasing demand among for consumers for shopping assistance when they need it most. Rakesh Gandhi. Coherence. etc. ubiquitous and omni-channel consumer mobile shopping experience (outside the store. A mobile platform should bring order to the chaos. Chemical and High Tech. This helps support standardization and speed time-to-market. The way to an omni-channel future Connect the dots. scalable and low cost. in-store and on-device). and barcode scanning. Feedback from consumer surveys clearly indicates that customers appreciate a convenient experience that harnesses the capabilities of their personal devices in order to deliver relevant offers. work across all target mobile devices. online. It provides an effective way for retailers to make their mobile offering agile. it’s a fact. CPG. Web. responsible for Consumer mobile solutions and Mobile Commerce portfolio for SAP. and in-store activities. The platform should provide rich re-usable solutions and services (such as payment. this offer should close the mobile commerce loop by enabling retailers to deliver offers that are closely tied with the data and insights they glean from all customer interactions: via mobile. Agile. The benefits of taking a platform approach Successful execution of a consumer mobile commerce strategy hinges on having a unified enterprise mobile platform that helps mitigate risk of rapid technology and device platform evolution. omni-channel experience. We believe that taking a mobile platform approach is therefore a critical success factor in executing a mobile first strategy for consumers. Hospitality and the Travel industry. CPG. providing retailers an effective way to consolidate and seamlessly render data to mobile devices and delivering an omni-channel experience. particularly as the advance of connected devices smartphones and tablets blurs the barrier between shopping online and in-store. wallet. Telco. Feature ready: The platform should ready to support access to new mobile capabilities such as augmented reality.Connect the dots. and mobile commerce is not a fad. offer omni-channel presence and stand resilient — even as the mobile landscape changes. location-based services (including indoor location services). But it’s not just about building the capabilities to deliver a seamless.) for retailers to develop and deploy new consumer solutions in a modular way similar to Lego building blocks. not meaningless promotions they can dismiss as spam. works closely with customers in Retail. and mobile commerce is not a fad.

utilities companies and transport authorities show how you can beat the competition by fighting smart and placing mobile at the core of a customer-facing. conduct commerce and self-serve. omni-channel strategy to capitalize on the data and insights mobile delivers to delight customers with personal and relevant offers sure to boost their loyalty to your brand. PART 6: 182 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 183 . In this section we explore how retailers.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Mobile is transforming how consumers interact with organizations throughout their daily journey to shop.

5 billion in revenue from mobile. That is why it is vital to understand and embrace mobile as a key element of your business strategy. It is everywhere and omnipresent in every commercial conversation. Mobile Marketing Association Growth of mobile payments in 2012 from 2011 Percentage of cellular connections Marriott Int There is much more to mobile commerce than technologies and transactions. while Google makes 17 percent of its US$41. It is not just good for business. Indeed. from the boardroom to the showroom floor. Today. Pandora makes 55 percent of its US$425 million of revenue from mobile. that 184 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 185 . mobile is not just a smartphone or a tablet. Mobile gets you closer to your consumer than any other media or sales channel. A key question that is addressed in these conversations is: What exactly is mobile? This is followed by: What exactly can it do for our business? How and what do we execute a mobile strategy? What kind of money should we put in to mobile? And.135. you will earn their loyalty to accelerate the growth of your business. one that speaks volumes. The Framework: Mobile and the path to purchase To be clear. it is critical for long-term survival. with answers far too detailed for this article. When you are close to your consumers by creating awareness and driving engagement. Nor is mobile just a phablet. to name a few — but there is a clear consensus that a mobile wallet is more than coupons and currency. there are two inalienable truths about mobile to understand: 1.798 in sales via mobile in 2012! Now that is a big number. Becker.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Gateway To The Future Of Customer Relationship Management By Michael J. Managing Director North America.864. The list goes on. the reliance of consumers on their mobile wallets to conduct commerce will offer marketers a window into consumer preferences and potentially fulfill the promise of one-to-one marketing. 400% 350% 300% 250% 200% 150% 100% 50% 0% Amazon Fandango Target Orbitz SubHub PayPal Fathead Amtrak 127 100 108 250 218 300 233 350 214 200 Figure 1: Based on data from the author According to the Internet Retailer Mobile 400 Guide the top 400 retailers in mobile racked up a combined $12. mobile apps or proximity payments. Marketers may be slightly confused by the many ways payments are enabled — by mobile messaging. The world is a buzz with mobile. what can we get in return? While these are great questions. Consumers are mobile 2. finally.

while the purchase funnel may look like a linear flow of consumer milestones. SMS or MMS. And. life is not linear. It is the connective tissue that binds the consumer with the brand. the Upper Funnel and Lower Funnel. Figure 2: Based on data from the author mid-range device between the smartphone and tablet. A consumer considers or researches a product via means including the search and the review of paid.As consumers use their mobile device as a tool of transaction. apps or mobile Web experience. Understanding mobile commerce within the framework It is critical to realize that. interactive consumer experience as people engage across all channels and media. we must remember that consumers will engage in any of the steps. Mobile marketing path to purchase framework Upper funnel Lower funnel As shown in Figure 2. For example. A consumer purchases the good or service. A consumer develops a preference for a good or service and expresses this by an action such as adding the product to their shopping cart.” To understand mobile in the broader context of consumer engagement. I find it is best to illustrate the dialog through the lens of the path to purchase and/or purchase funnel. inputting it in their wish list. In fact. These are separated by the Point of Conversion. Jawbone UP). the passive monitoring device (i. Awareness Preference Loyalty The Upper Funnel refers to the decision making milestones a consumer encounters prior to making a purchase. there are many steps along the path to purchase. The first step in consuming a service or good. marketers reap the benefits with a wealth of data with every swipe. goods or services through paid. in the middle of all of this is the point of conversion.e. regardless of the order. untethered. mobile influences and powers a unique. the eReader. Mobile encompasses all of these devices and more. owned and earned media. as well as the overall relationship. or installing a good. The Lower Funnel are the steps the consumer engages in following a purchase or value exchange with a marketer. Preference. the games console. A consumer becomes aware of products. including: Advocacy Consideration Conversion Support Awareness. Rather. The process of sharing one’s experience with the product or good with the marketer. in a world of mobile we need to leverage the omni-channel and enable our customers to “buy from anywhere and fulfill from anywhere. ‘liking’ it in their social network or posting a comment. Loyalty. Mobile is also the feature phone. Toys ‘R’ Us said it best. Consideration. Examples of activity at this stage include watching a video or subscribing to alerts and notifications. click or purchase. including: Service consumption and/or product use. or are 186 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 187 . which can be divided into two groups. The process of repeat purchase or use. a consumer could discover your product before they search. Advocacy. owned and earned media. the second screen experience.

let’s not forget the incentive element of the wallet. Finally. the mobile wallet can assume any number of forms and styles. These assets in the wallet can be used to purchase goods and services. The mobile wallet — offered by players like Google. Generally speaking. Again. A mobile wallet may also hold coupons. Remittances. Where the retailer is remote and payment for goods and services occurs via a mobile device enabled by mobile media like mobile Websites. At this point. a storage for our political preference and donor status. Prior to a payment being processed. version of a physical wallet. or pay via a LevelUp card on which their unique QR code is printed). credit cards. analysts agree there are three forms of mobile commerce or payments: Proximity payments. Mobile commerce is like sunlight in that it is often defined by how it is measured. making a purchase pulls from cash consumers have stored in a pre-paid account like a credit card or debit card. They can send an SMS (as in the case of Shopkick. Where customers use their mobile device to send and receive monetary value . linked loyalty program point totals that can be converted to real currency. and so much more. consumers may wave their mobile device across an NFC-enabled point-of-sale terminal. advertisements and promotions. a hideaway for a key or password. Where payment is made at the point-of-sale and initiated from a mobile phone that uses NFC technology. Importantly. Square. Assume the consumer is ready to buy a product. Depending on how you measure it you’ll either get a particle (measuring a transaction at a point in time). just like it would be using a real wallet. Like a physical wallet. PayPal. Additionally. which allows rewards from multiple programs to be used in various combinations and spent like cash . Mobile wallet and mobile commerce This view of mobile commerce is powered by what is commonly referred to as the mobile wallet. first mobile app that gives consumers rewards and offers simply for walking into store).or more simply put. and use a variety of methods to complete the payment and offer rewards. we have to remember that a mobile wallet will contain more than just coupons and currency. a tool for managing our relationships. so they are at the Point of Conversion or the transaction point. usually via mobile Web browsing. a mobile app that allows users to link their debit or More than the transaction There is more to mobile commerce than the processing of a transaction. Also. Consumers will also jump around milestones on the path to purchase and so it is imperative that marketers adjust and remain agile across the funnel. to transfer money electronically person-to person (P2P) using a mobile phone. these deductions are made in real time without the need for consumers to fumble around for discounts or coupons post-transaction. debit cards and loyalty cards. There is so much that has happened and will continue to happen in the near future. From there. online or in-store. store rebates. Depending how you measure sunlight you’ll either get a particle or a waveform. We’re just getting started. It can hold cash. rebates and more. before they are sold. The same thing happens with mobile commerce. Apple will also be playing a major role in the mobile wallet with its Passbook offering that features a number of apps all dedicated to mobile commerce. The mobile wallet is also a window into our identity. they will need to be educated. cloud-based. or require a consumer to click a button or scan a barcode (as in the case of LevelUp. the marketer and consumer exchange value for a product. Isis. Analysts forecast that mobile payments usage will skyrocket in the next five years. or you’ll see waveform (the process of commerce from the consumers 188 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 189 . the mobile wallet can deduct relevant coupons. Remote Payments. Sprint. credit card to a unique QR code displayed within the app. the mobile wallet is an extension of self and a gateway to the future of customer relationship management. Facebook credits. LevelUp and others — is a software. as in the case of American Express crediting a charge after a Foursquare: Check In. with proximity payments accounting for as much as half of all transactions. A prime example is Swift places consumers already shop.even aware of the brand. apps and messaging. Indeed.

it is early days. but may also cover virtual goods. From now on. which may include physical goods and services. we should move forward. Understanding this distinction is incredibly important since it will help define how you integrate mobile marketing into your business strategy and the steps you take. As a result. where he oversees the association’s regional membership. We now have the capability for one-to-one marketing with mobile. click or purchase. few are executing against a fully integrated mobile marketing strategy throughout their marketing mix. research. With the appropriate permissions. temperature and possibly even temperament). It is a missed opportunity for seamless consumer engagement. Welcome to the mobile world. The richness of mobile Beyond the Mobile Marketing Framework and deciphering the value of mobile. I refer to this waveform of mobile commerce as the ‘Mobile Commerce Window’ within the overall Mobile Marketing Framework. an industry-leading mobile marketing solutions provider. as well as founder and publisher of the MMA International Journal of Mobile Marketing. This includes the integration of retail elements like a mobile-enabled point-ofsale or Website and app. as consumers use their mobile device as a tool of transaction. but no more. it is crucial to understand that we are just scratching the surface. speed. He is also Founder and Strategic Advisor to Archer Mobile. However. Lower funnel Upper funnel Awareness Preference Loyalty Consideration Conversion Support Advocacy Mobile commerce window Figure 3: Based on data from the author For example. events and education businesses. there are inter-related capabilities around the mobile wallet that need to be considered. As we continue to peel back new layers of value with mobile. to specific consumer behaviors or event ambient conditions (such as. Don Peppers in his seminal work in 1992 coined the term one-to-one marketing. on the commercial front. elevation. mobile is going to change everything. Some analyst reports suggest that most brands rely solely on upper funnel mobile advertising initiatives or lower funnel mobile marketing. marketing and commerce will never be the same.Mobile commerce window The mobile wallet is an extension of self and a gateway to the future of customer relationship management.  point of preference to their initial use of the product and service). For the last two decades this concept has been science fiction. 190 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 191 . He has authored two books (Mobile Marketing for Dummies and Web Marketing All-in-One for Dummies) and written more than 100 articles on mobile marketing. And. marketers reap the benefits with a wealth of data with every swipe. Michael Becker is North American Managing Director of the MMA. From where and when. But we should also remain cautious so to not misuse emerging platforms and opportunities. brands can leverage the context of a consumer’s mobile life. strategic initiatives.

and more. maintain relevance and keep pace with the ever-changing mobile landscape will outpace their competition over the next five years. Based on this behavior the mobile phone may replace wallets and purses in the future (though I'm not certain when we’ll see the arrival of a mobile device that can carry spare lipstick and sunglasses. As mentioned earlier. reading reviews/social media and price shopping with 'Over the Top' retailers or directly with manufacturers on their smart phone while they are in the store. food items. mobile is not just an extension to online interaction. when and how consumer engagement occurs.1 percent of those who own tablets said in advance of the last holiday shopping season that they intended to use their devices to research and purchase gifts. Shoppers are comparing products. Ironically. a report published by the National Retail Federation. so the handbag is safe for the time being). to research products. SAP Mobile is changing the game for manufacturers. there is an upside since research shows shoppers who use mobile and online channels to research and make purchases actually tend to spend more than in-store shoppers. to enable meaningful — and ongoing—customer engagement. and retailers alike. Furthermore. Clearly those organizations that can successfully evolve and create meaningful engagement with the mobile consumer. In order for organizations to effectively engage the consumer via mobile they first have to understand what experience(s) will deliver value that is significant enough to justify taking space — and thus capturing mindshare — within the user’s mobile universe. Mobility occurs in continuity with the user as opposed to the session-based interactions characteristic to online technologies.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Reaching The Mobile Consumer By Jason A. Mobile is transforming the way consumers discover. Whether companies provide a mobile experience for the consumer or not. the mobile device is an extension of the user. This also represents a significant shift in where. over half (52. check for reviews and make purchasing decisions. the consumer is creating their own experience. As a result. Empowered consumers are reaching to their mobile phones every step of the journey. putting together outfits and reviewing recommendations via social media. décor. Against this backdrop. shop and purchase. and in making routine transactions the whole year through. research. Shoppers are creating lists online and accessing them while walking the aisles via their mobile device. the practice of evaluating items in store and subsequently purchasing online. Put simply. documenting that the vast majority of retailers expect to be impacted by showrooming and see sales drop as a result. Contrary to the approach that many companies are taking when they opt to simply tack mobile onto their existing channels. that is cohesive across all channels. It would seem that more opportunities to shop using more channels increases convenience and encourages consumers to shop more. Director Mobile Solutions Management. support and connect them are going to be transformed by the mobile consumer. mobile applications must assist them in the process. perceives the world around them and provides instantaneous information access and feedback. It contains their personal information and contacts. A raft of research since underlines the pivotal role of mobile in holiday shopping.9 percent) of those who own smartphones and 64. Mobile changes the retail rules Showrooming. The traditional relationships between these organizations and the agencies that 192 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 193 . According to the 'NRF Consumer Holiday Spending Survey'. mobile devices are an extension of the consumer. serves as a line of communication. Accordingly. mobile devices serve as the pivot point between online and in store interactions. Oglesby. is shifting to real-time at the expense of the retailer. Clearly. research and services paint a dismal picture. The mobile phone is always with the consumer. Mobile is changing the game for manufacturers and retailers alike. much like a wallet or a handbag. the retail storefront has become an access point where the consumer is assembling recipes. adding value to the experience. the world’s largest retail trade association and the voice of retail worldwide. But organizations should not miss the opportunity to build mobile into a wider strategy.

telecom. the shopping mall concept) will be just as applicable via the mobile device.Organizations that can successfully evolve and create meaningful engagement with the mobile consumer. 194 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 195 . but that is a topic well beyond the scope of this article. Important questions to ask are: Is the consumer savvy enough to take advantage of a QR scan to reach your mobile presence. confirms that consumers value advertising and offers that are aligned with their personal preferences. a global management consulting. Based on these insights I have identified five critical engagement technologies that support the delivery of a retail experience that offers mobile shoppers value because it is personal. and how they interact (physically and digitally) with you today based on their requirements. You also need to ask yourself: How do you take that information and. communities (think chamber of commerce). finding the best way to connecting with the consumer is just the beginning. allowing them to create alliances with manufacturers where there is the opportunity to have those close relationships. providing value doesn't just mean offering consumers a discount or giving something away for free. technology services company. Research from Accenture. provide your customers services and interactions that are the most intuitive and comfortable fit with their mobile universe? However. based on it. You must also find a way to deliver value on a personal level to them as an individual. or do they need a more step-wise approach? How often does the consumer interact with your brand and products? Not every retailer should be the main attractions in the shopping mall. Delivering personal value Broadly focused interactions quickly become background noise and are filtered or completely discarded. maintain relevance and keep pace with the ever-changing mobile landscape will outpace their competition over the next five years. Research shows that consumers genuinely appreciate a mobile shopping experience that gives them convenience ease of use and confidence that the transaction is secure. Among the findings: • 3 in 4 online shoppers prefer retailers that use personal information to improve the shopping experience • 73 percent want 'relevant' ads on their mobile device • 65 percent like to receive offers to their smartphone based on past purchases while in-store Consumer engagement begins with creating a delightful and simple way to connect with the consumer that is aligned with your brand and understands how consumers perceive the relationship. These ecosystems will present game-changing opportunities for the small retailer. social networking and alliances. Interestingly. but will arise from banking. nor should they behave like this when they approach mobile. The key here is to understand your consumer and how they view their relationship with your business. Much of this is being driven by the current race to own the mobile wallet. Ecosystem opportunities will arise not only from the traditional brick-and-mortar organizations that support shopping malls today. relevant and convenient. engagement via mobile should be highly personalized and relevant to the user. Ecosystems (that is.

which can come in to enhance the mobile experience. To feel competent rather than questioning ourselves. To have the confidence in our preferences. Are there ways to leverage social circles in the mobile application that will enhance the consumer experience? In an age where a raft of recent consumer surveys point out that shoppers increasingly consult their social communities. This is also where collaborative shopping lists that incorporate the wishes and interests of the entire family. But in reality. or read other customer reviews. It is important to engage methodologies like Design Thinking to work directly with the end-user. before making a purchase. Contextual 1:1 personalized marketing 4. This experience should be immediately identifiable with your brand and create interfaces that are relevant and engaging to the consumer. She concludes. availability and research tools 3. this engagement should cohesively cross channels so that the mobile experience becomes effortlessly integrated with the individual consumer’s lifestyle. in defining specific mobile use cases and how those interactions should be structured to facili- tate the way the consumer would naturally engage with your brand. has studied the impact of choice on consumers. offers perfectly tailored to a specific spouse or relative. “Most of us aren’t experts in everything. not people. Sheena Iyengar. retailers and manufacturers are seeing a decline in brand loyalty attributed to the fact that consumers are becoming less sure of their buying decisions. In addition. Consumer fatigue is particularly evident in loyalty and reward program participation. what we really want is a great choosing experience. There are only so many loyalty membership cards or keychain dongles that a consumer is willing to carry with them. In both scenarios the user interface itself should be easy to use. Interactive shopping lists 2. it is certainly useful to have access to targeted and personalized offers. Professor at Columbia Business School and author of The Art of Choosing. 'Did I really get it right ?'” With so many options in the market it is often impossible for the consumer to feel that they have adequately evaluated. Beyond engagement via user experience. With global competition and the unparalleled availability of information the consumer is presented with an overwhelming variety of options in the market. As a result. Shopping is social While it is important to offer a mobile experience that is seamlessly integrated into the consumer’s lifestyle. P  roduct location. In view of this. one must also consider the forces competing for consumer mindshare. these types of services are decoupled from the mobile client and can be leveraged across a variety of channels as well as across product lines and brands. intuitively designed and deliver a delightful experience to the consumer. This is the user engagement that should determine which mobile technologies are employed in the overall consumer experience. Immediate rewards Significantly. it's clear that shopping has become a social activity. it is also important to examine the opportunities introduced via social media and community. Successfully engaging the mobile consumer should provide the tools to reverse this trend and deliver a great choosing experience. In fact. Mobile experience guidelines Too many mobile applications put technology. organizations that have invested in a mobile presence must develop a strategy that protects their 196 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 197 . or consumer. Simplified payment options 5. delivered via a mobile device when gift shopping.1. first — an approach that can backfire because an organization is more committed to delivering an innovative experience as opposed to providing the consumer an intuitive and elegant design they can use and appreciate. compared and selected the right products from all the products available on the market. We say we want more choices because we want the opportunity to find the perfect choice. Mobile applications also appear to have lost their luster.

Indeed. catering to this new kind of consumer. Rather than strengthening the brand message these applications achieve the opposite. one that rapidly loses relevance and mobile mindshare. In order to maintain and grow that mindshare. Thus. Furthermore. Those that do this well. allowing an organization to deliver iterative seasonal layouts as well as promotional experiences across multiple device platforms. Previously. all too frequently that have been built within different teams on different platforms. we find that many of these applications are not part of a larger strategy. Additionally. But organizations can't stop there. organizations can create a platform to reduce risk and promote innovation. will redefine how we think about loyalty and brand awareness in the years to come. it becomes very difficult for organizations to build and maintain exciting and engaging mobile experiences on those platforms. as they should be. personalized offers and coupons) de-coupled from the end presentation layer on a specific mobile device. becoming chaff and diluting brand value in the app stores. By employing a reference architecture and building mobile engagement around a foundation of durable services that deliver cross-channel coherence. This foundation should serve as a platform for innovation. Jason A. with new devices released on a yearly basis and significant revisions to mobile operating systems happening as frequently as 2-3 times a year. by de-coupling the complexity from the client tier these organizations will avoid technology lock-in and enjoy the flexibility to rapidly uptake new devices. 198 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 199 . His first experience with mobile was building an application to control a ceiling fan on a Windows CE device while in college. seasonal or promotional 'Throw away' application. investment and maintains their relevance in the consumer’s mobile universe. Oglesby is part of the SAP Mobile Solutions Management organization focused upon Consumer Engagement and Mobile Consumer Applications. Furthermore. Organizations should therefore seek to create a more durable mobile presence that provides a consistent foundation of engagement services (such as loyalty and rewards. is a new experience for many companies. one empowered by advances in online and mobile technologies. As device manufacturers deliver new innovation in every release to stay relevant in this super-competitive market. In other words. They have been released as little more than a mobile novelty. the consumer is demanding and defining their mobile experience. mirroring the relationship users have with their mobile devices.Organizations are challenged with developing mature mobile engagements in an environment where the target is continuously changing. the mobile presence needs to evolve and innovate in lock step with the changes made by device manufactures and the changing attitudes of consumers. while the base interactions with the consumer remain consistent and cohesive across channels. or for that matter the engagement channel itself. Fast-moving mobile The pace of mobile is moving at a velocity that has not been seen before. organizations must deliver value and a relationship that is personalized and intimate. technologies and support new channels as they appear in the market. Consumers in control A significant paradigm shift that we are seeing in mobile is linked to the emergence of the empowered consumer. organizations are challenged with developing mature mobile engagements in an environment where the target is continuously changing. In order to engage the mobile consumer and capture their mindshare on their personal mobile device. he was with Kony Solutions where he served as a senior sales engineer in Banking and financial services. many organizations find themselves today in possession of several disjointed mobile applications.

While showrooming has created challenges for retailers. An RTE would learn this user’s behavior and automatically load the sales page whenever the user launches the app or Website. the user experience should adapt as a person moves between devices such as a laptop to a smartphone. Consumers also expect real-time data that is accurate and consistent across a retailer’s Website and its physical locations. The widespread adoption of mobile has changed customer expectations across every industry. but the solution is clear: building an information technology and customer-facing strategy that capitalizes on mobile attributes such as location. the RTE should self-adapt. Today. especially retail. This will create adaptive and personalized services that get smarter over time through customer -specific data analysis. Consumers expect to research. The best services will learn and adapt to a user’s behaviors over time. Right-time Experiences differ from what retailers deliver today because they are adaptable.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS The Engaged Retailer: How Mobile And Big Data Improve Revenue. learning. and sensor data to delight customers and convince them to come back — again and again. Consumer adoption of mobile devices has grown exponentially with mobile subscribers now amounting to more than 5 billion worldwide. locate and purchase products wherever they are. mobile applications. and prior transactions. which Lopez Research defines as Right-time Experiences (RTEs). will deliver Retailers. Founder and Principal Analyst. and Wal-Mart are now integrating Web and physical retail channels with ‘Site to Store’ options that allow customers to purchase merchandise online and then have it delivered to the store of their choice. RTEs will analyze a person’s transaction history. If the user’s context changes. inventory availability and product reviews. analyze mobile data such as location. Retailers now have to contend with ’showrooming’ — the act of a Adaptive and personalized’ Leading retailers will use big data processing and real-time analytics software to analyze information from mobile devices. or to a tablet. The devices consumers carry are also more advanced and have more capabilities than their simpler counterparts of the past. and predictive. Retention And Profits By Maribel Lopez. such as Best Buy. The challenge is building an information technology and customer -facing strategy that capitalizes on mobile attributes such as location. activity. Sears. 200 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 201 . For example. activity. there are over 1 billion smartphones deployed globally. and Apple alone is expected to ship nearly 100 million tablets in 2013. These smarter services. mobile adoption has also exceeded 100 percent as many individuals carry multiple connected devices. The challenge is huge. mobility also provides tremendous opportunity to reach the customer wherever they are and frequently at the point of decision. Lopez Research customer viewing merchandise in a physical retail store only to then purchase the merchandise online or from another retailer. For example. In many countries. a customer may always prefer to begin their interaction with a retailer by clicking on the sales page of the mobile Website or app belonging to that retailer. and respond with information that is relevant to the individual at that moment. Today consumers are using smartphones while in the store to check pricing. at the point of need to a retailer’s customers and employees. Mobile technologies have become an integral part of the shopping process. Retailers are under pressure to take proactive action to turn mobile into an asset that delivers revenue and customer engagement. the right information or service. and sensor data.

By combining information streams. Power of push With the appropriate opt-in policy. if a consumer is using the retailer’s app. such as Best Buy. and notify customers when photo prints are ready. authentication services. as well as enabling mobile checkout. transaction clearinghouses. and improve overall customer engagement. Tesco offered a new mobile commerce experience by using the walls of a Korean metro station located in Seoul in order to create a 'virtual supermarket' where shoppers can use their mobile devices to choose products and have them delivered. and integrate commerce across channels. Maribel Lopez. retailers can tailor the type and timing of an experience by tapping into contextual items such as location. For example. the retailer could learn if the consumer used a digital coupon. hoping to prompt that customer to stop in on the way home. Communications. Sears. add new customers. For example. shared a promotion or scanned a product code. Care. and solve the customer’s problem. and click-to-call services. there are at least three categories that will help retailers increase the average basket purchase. 202 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 203 . allow them to place an order for the items they want. Wal-Mart also offers a 'Pick Up Today' service. Retailers. more about what services are used. and push notifications to remind its customers to refill prescriptions. and Wal-Mart are now integrating Web and physical retail channels with ‘Site to Store’ options that allow customers to purchase merchandise online and then have it delivered to the store of their choice. a store employee can locate inventory. where she provided analysis on multiple topics including network and service strategies. For example. Retailers that understand and prepare for this paradigm shift will create a sustainable. If a product is out of stock. and. and also what promotions work. and promotions. Maribel was a respected analyst for over 10 years at Forrester Research. if so.Tesco employs mobile devices and video in order to improve care by preventing items from being out of stock in its stores with a “broccoli cam” that monitors its produce shelves and alerts workers via their mobile devices to refill the produce trays when needed. alert customers when a prescription is ready for pickup. which allows customers to check if their desired store has specific items in stock. time of day and device type. If a retailer’s price is higher than an e-commerce retailer. Retailers must take proactive action to turn mobile into an asset that delivers revenue and customer engagement. 3 key categories Right-time Experiences require retailers to connect internal corporate data sources such as pricing. product comparisons. Many retailers will begin to improve customer service by providing their employees with on-the-go access to corporate data. order the product. Walgreens now offers email. enterprise communications and consumer markets for voice. founded Lopez Research LLC in 2008. The Lowe’s employee app gives staff access to product availability and inventory. inventory. An advanced RTE would allow the consumer to pre-purchase the chicken and pick it up at the store. It’s also considering using push notifications to remind customers when to take medications. Prior. a grocer could send a push notification during a customer’s normal commute time after work to remind the customer of a promotion on rotisserie chicken. how. and what they communicate to their customers. a retailer could offer a check-in option with a mobile app that provides relevant offers based on the user’s transaction history. Retailers will improve sales with RTEs that link to external information. While there are many types of RTEs. Get ready to excel Mobile technologies have become an integral part of the shopping process. Moreover. Retailers will use mobile to transform when. Commerce. the store’s manager could offer a competitive price match to close the sale. For example. RTEs will also link applications to Webaccessible data that lives outside the company such as reviews. Tesco employs mobile devices and video in order to improve care by preventing items from being out of stock in its stores with a “broccoli cam” that monitors its produce shelves and alerts workers via their mobile devices to refill the produce trays when needed. SMS. competitive advantage via mobile and big data technology that will undoubtedly put them in position to excel above the rest. Lowe’s has deployed smartphones and several custom apps to its employees. video and data. enable mobile commerce. retailers can learn more about their customers.

January 2013 2. Director Mobile Solutions Management. Most retailers can access an enormous amount of data via point-of-sale (POS) systems. retailers need to harness execute a profitable strategy. and using. Cisco Internet Business Solutions Group (IBSG).” where a customer uses their physical retail store as a place to view products only to then purchase them online . the right information. coupled with shorter product lifecycles and well-informed. It doesn't arm retailers to influence purchasing decisions or add value by presenting consumers with deals. Additionally.11u-2011 is an amendment to the IEEE 802. retail is an extremely competitive industry. At one level. allowing customers sitting on benches in the mall or tables at FOOTNOTE 1. respects personal privacy and provides retailers the analytics they need to deliver 'precision at the point of decision'.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Detect. public hotspots and commercial establishments. retailers must be able to react to events as they happen. This is exciting because it allows retailers to wring additional value out the same technology it formerly viewed a cost component.often with the help of a mobile app that the power of mobility to reach the loyal customers and market to those consumers in real-time. 204 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 205 . Connect And Engage By Mark Dahm. the seamless and secure roaming of devices from 3G/4G cellular to NGH-enabled Wi-Fi Networks in retail stores will make this transition simple and secure. an uncertain economy and low consumer confidence.11-2007 standard to add features that improve interworking with external networks. and consumers are bringing their own technology – smartphones and mobile devices – to help on their shopping excursions. technology has influenced the purchase decision. Fortunately. In a world where Cisco findings show 74 percent of smartphone owners use their mobile phones to get real-time location-based information1. to say the least. retailers that implemented Wi-Fi. But that is information that documents outcomes. It also doesn't equip retailers to contend with “showrooming. Even better if the store staff can do this before the customer asks or knows they need help in the first place. provided by Cisco and other vendors. Senior Manager. for example. Under any circumstances. Wireless Networking Group. make it especially difficult to allows consumers to make a purchase at the all-important moment of decision. Put another way. Business Development. and the loyalty schemes they appreciate. and Jason A. This approach. retailers need to find ways to reach the customer when it matters most. providing insights into the purchases consumers make. Previously. regardless of channel. SA Today’s retail environment is challenging. demanding customers. Oglesby. Clearly. Thriving in this environment means maximizing the profit potential of each interaction. Connected. this means having. Next-Generation Hotspot is about solving the security and usability problems of today’s hotspots to make Wi-Fi as secure and as easy to use as 3G cellular 3. But today.11u3 standard. informed consumers expect the best products at the best prices. focused on reaching the right customers at the right time with the right offer. Today. retailers can meet and exceed these expectations by leveraging Wi-Fi networks to cater to customers based on where they are in the aisles and how they react to offers around them. 802. the channels they use. Detect Retailers can start by leveraging the store’s existing Wi-Fi network to drive a premium consumer experience in store. Cisco Systems. they need to insert themselves in the consumer journey where they can offer consumers (especially their most loyal customers) assistance. IEEE 802. transaction. discounts or useful recommendations. with the advent of Next Generation Hotspot (NGH)2 and the .11 is a family of IEEE technical standards for mobile communication devices such as mobile phones and laptops to join a wireless local area network (WLAN) widely used in the home. Retailers have only a narrow window to make the sale and seize the opportunity. advice and additional offers they are likely to appreciate. and customer contact. focused only on access. To reach the right customers at the right time with the right offer.

acting as a kind of concierge. This means harnessing network analytics and powerful data analysis to optimize the supply chain (making sure shelves are stocked) and execute the real-time decisions that will allow them to competitively differentiate their retail experience for every customer who walks in the store. the food lounge to log on to the free Wi-Fi network. which is why we call it precision marketing. At its core is the capability to support precision retailing.It's easy to imagine many scenarios where the retailer. along with contextbased information to determine what sort of offers an individual consumer would value and identify the ways to make it personal and relevant in real time. the shopping experience ends with customers scanning a barcode at the register and getting credit for the points collected. allowing the retailer deep insights into how customers interact with their physical environment based upon where they are in the store and what they are doing at that point in time. and they should shown around in a way that pays special attention to showing them the attractions you 'know' they will appreciate the most. The real precision comes when you couple this with a technology like Cisco’s Wi-Fi access and analytics to provide indoor location services. Brands and Consumer Product (CP) companies also benefit because this approach gives them new opportunities to interact with their customers. That was then. The next step will be solutions that leverage the indoor-location combined with analytic capabilities to optimize the in-store experience for consumers and retailers. Engage As we have shown. which prompts them to launch the store’s mobile app. the store staff can also get in on the action. But an even bigger part of this is harnessing technology to help customers when they need it most. Finally. insights into customer sentiment allows retailers to refine their offers in real-time to accelerate revenue generation and encourage customer loyalty. In practice this means being able to analyze customer purchasing history. This will pave the way for a connected shopping experience that will bring real-time and location-based deals to shoppers and allow retailers to improve customer service and more accurately track ROI. could personalize the shopping experience and deliver assistance — even before customers ask for it. using the app’s location service. Some retailers also used the network to access B2B mobility applications to manage inventory or activate signage. This capability allows retailers to achieve much more than the vision of one-to-one marketing. which is all about influencing in-store buying decisions via special offers based on the consumer's past purchases and explicit preferences. They are investments that will help retailers reach the next level. context-aware offers and assistance customers will find genuinely useful and valuable. Imagine customers carrying a smartphone into their favorite store. or an appliance that is extremely energy efficient. act decisively and affect outcomes. the technology and analytics are coming together to allow retailers to radically redefine the relationship they have with their customers. They should be greeted at the door. It's easy to imagine many scenarios where the retailer. Part of this is building the capabilities to enable shoppers to make smart decisions and receive instant discounts on their mobile devices to put towards their purchases and loyalty programs. customer profiling preferences. As the following scenario shows. equipping them to deliver real-time. Leveraging the Wi-Fi network intelligence. managing even in a high-volume shopping situation to have a one-on-one relationship with them in real-time. They are able to quickly find and assist customers looking for clothing in their size. and new possibilities to work with retailers to create 206 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 207 . could personalize the shopping experience and deliver assistance — even before customers ask for it. acting as a kind of concierge. Meanwhile. The automatic check-in feature rewards the consumer with loyalty points and the store manager receives customer shopping details (with opt-in permission). in store inventory information. store management tracks the ROI of the deals and offers sent through the mobile app and can even forecast inventory levels based on current customer consumption. instantly connecting to the store’s Wi-Fi network. But its also about arming retailers to accelerate insight. Today it's becoming increasingly clear that these Wi-Fi networks aren't an opex cost. branded by the retailer. Connect The benefit of combining indoor location based services with analytics is to deliver the capabilities that will allow retailers to understand and fulfill customer needs. We believe that retailers should treat customers like old friends coming for a visit.

It's important to stress that — out of respect to personal privacy and simply because it's good business practice — retailers can only see 'dots' on a dashboard that represent consumer footfall. It's also very exciting for retailers and their business ecosystem because precision retailing equips them to overcome the dilemma that plagues all marketing: trackability. Retailers can also leverage these real-time insights to improve their operations. Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 209 . First and foremost. Through data the system gathers and the information customers volunteer the system learns and adapts to consumers over time. based on real-time analytics and feedback.The next step will be solutions that leverage the indoor-location combined with analytic capabilities to optimize the in-store experience for consumers and retailers. their activity speaks volumes about the products and offers they like.” Real-time information and analytics removes the guesswork. Revolutionary retail This is just one way that the brand or CP can be part of the shopping experience. His first experience with mobile was building an application to control a ceiling fan on a Windows CE device while in college. More importantly. the department-store magnate John Wanamaker observed. new opportunities Retailers can harness network analytics and powerful data analysis to improve their relationships with loyal customers and track the success of sales tactics. All this is visualized on a heat map that shows where customers ('dots') are spending their time — and money. This is the way to build — and deepen — consumer engagement and break the barriers that exist today in reaching consumers. In practice. Over a century ago. for instance. the technology that powers precision retailing gets smarter over time to satisfy. enabling retailers to deliver personalized offers and cross-sell based on items customers have in the shopping carts. he was with Kony Solutions where he served as a senior sales engineer in Banking and financial services. I just don’t know which half. This is possible because of the option consumers have to rate offers. using channels that range from print ads and coupons. Retailers are therefore equipped to monitor — in real-time — how specific offers and promotions within the store are performing. Jason Oglesby is part of the SAP Mobile Solutions Management organization focused upon Consumer Engagement and Mobile Consumer Applications. meet — even predict — customer needs. information and insights that retailers can gain by just asking their customers has its merits. and adjust their strategy accordingly. which is cloud-based and powered by precision retailing. the brand or CP has the opportunity to get closer to the consumer while they are in the store and thus better manage their brand and product information. Rather than being in print ads or online. Armed with this insight the retailer can experiment with placement and promotions to catch customer interest and drive sales. They do not have the capability to identify individual customers as they walk through the store premises. Previously. Mark Dahm is a seasoned professional with a twenty year history of success in Silicon Valley and international markets in the disciplines of Sales. After all. Service Provider and “Connected Consumer” markets. this technology gives retailers new visibility into customer activity at the aisle level. Say. when they are delivered. Traditionally. including consumers. to online destinations where the consumer logs on to learn new and interesting ways to use Kraft products in preparing a meal. or in their purchasing history. One indication is where consumers are going based on traffic patterns. consumers will be able to receive a limited number of offers that are specifically tailored to them as individuals based on preferences they established (a combination of consumers' actual consumption and the information they opt in to volunteer). Finally. 'I like this one' or 'I don’t like that one'. Business Development and Product Management. they can be loaded into the retailer's system. What a brand can do with the coupons is almost radical. Take a brand like Kraft. It's easy to imagine scenarios that completely revolutionize who engages with the consumer and how. Moving forward. They can evaluate each promotional campaign and then select the one that delivers the best results for the store — and its customers. panel participant and recognized expert for Wireless and Mobility strategies in the Enterprise. retailers can run these experiments. that there is a ‘cold spot’ over by toys. Efficient operations. they control their brand and promotions through media. Mark is a sought after spokesman. He has an established track record with Global 100 companies and has held leadership positions with four start-up companies. 208 shopping experiences that benefit all stakeholders. Imagine a scenario where the consumer enters the store and can receive relevant coupons directly from the brand via the retail system and store them in their wallet to be accessed and redeemed at the checkout. instead of being assaulted by thousands of offers and being overwhelmed by choice. “I know half my advertising dollars are wasted.

two-thirds of which were used by commuters on a daily basis.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Public Transport Drives Personal Loyalty By Pierre Bourbonnière. Montreal’s transport authority. Using the mobile app allows commuters to receive notifications about available rewards from STM business partners. In addition to storing all fares and monthly passes purchased by the owner.500 business partners. By 2012 the transport authority reported some three million loyalty cards were in circulation. delivered by a smartphone app. to thank existing customers and attract new ones. To achieve this ambitious goal required a revolutionary new loyalty program. Given the central role that mobile plays in the lives of Digital Natives. such as monthly newsletters and additional insurance if the card is lost. riders are prompted to input their specific preferences. promoters Against this backdrop. as well as time-strapped commuters. a key customer segment. such as email addresses. users raised on the Internet. That formula is what makes this an extremely unique program. In practice commuters can load the transit smart cards at one of over 200 fare vending machines and use it for travel using the STM Instant gratification system of subways and buses. STM was resolved to launch a pilot that would last for a period of six months. including the Opera de Montreal. A prime example is Canadian transport authority Société de transport de Montréal (STM). to download the mobile app. Head of Marketing at Société de transport de Montréal Loyalty programs are commonplace across the retail industry. and even a few surprises. STM wanted to avoid being ‘just another loyalty card that collected points’. The aim is to build an ecosystem of more than 1. that commuters volunteer in return for value-added services. Context matters By leveraging the CRM solution of its vendor. along the way. restaurants and other hobbies. While STM was quite satisfied by the uptake of the smart card offer. which has launched an innovative mobile customer rewards pilot program. and at the right place. launched in spring of 2012. STM can delve into OPUS rider histories and preferences to create and deliver personalized. it also saw the untapped opportunity to take the program to the next level as part of a larger strategy to increase ridership by 40 percent by 2020. but now other verticals are exploring such schemes to help them drive revenue and keep customers. that would create excitement — and value — for commuters by offering them relevant real-time offers aligned with their preferences and location. and in some cases emails sent to Opus card holders. The pilot. Once downloaded. making sure the identity of the individual commuter remained hidden. such as their interest in sporting events. a smart card allowing passengers the ability to load their tickets and monthly passes and providing for extra convenience and security. Thus. called STM MERCI using SAP Precision Marketing. the mobile app approach effectively places the STM at the forefront in the field of customer relationship strategy 210 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 211 . Of course. Interestingly. geo-localized offers to commuters on the move. The key to success is offering the right individual the right offer at the right time. introduced the Opus card. In 2008 Société de transport de Montréal (STM). inviting commuters via public advertising in stations. recognizing that personal privacy is paramount. internal STM company research had also determined that the youth demographic. the card can also store customer information. It wanted to build an ecosystem of partners and offers that would “reward users on the spot” for their continued loyalty. STM made the decision to release a mobile app for the popular iPhone smartphone. would be particularly positive toward a loyalty scheme that could deliver ‘instant gratification’. announcing plans to follow later with an app for the Android platform. STM partnered with a vendor that created a firewall between marketers and commuters. cultural arts.

Clearly. “It’s our way of thanking and attracting new customers to public transit. In addition. not just transport. as well as over 125 local retailers. STM is well progressed in developing strategy that will not only generate additional ridership. where he was in charge of premium services such as Concierge. ranging from coffee houses to specialty shops. As Michel Labrecque.of local events. information they have volunteered in return for relevant offers. these customers benefit from relevant offers — as well as a reward scheme — that respects their privacy and personal tastes. STM chairman. In the backend STM’s ability to segment geo-localized promotions ensures that notifications are a match with the commuters demographics and personal preferences. Transformational model Precision Marketing is a retention program for STM’s most valued customers. The launch of this program responds to a need expressed by a portion of customers. and its ecosystem of partners. “We’ve grown from an era where 1. and then reward them for choosing an alternative route or time.” Against this backdrop. to seek new ways to use mobile to reward individual consumers for their loyalty. They also appreciate being rewarded for their loyalty. Prior to this Bourbonnière held a variety of marketing positions at Air Canada and Aeroplan. STM wanted to avoid being ‘just another loyalty card that collected points’. The program. it will also generate a significant amount of revenue from business partners and retailers eager to connect with the transport authority’s captured audience of commuters. preferences and needs of its commuters allows STM. and Aeroplan benefit packages.2 million customers travelled anonymously in public transit to a world where we can communicate directly with every person. Having deep insights into the habits.” Labrecque concluded. and as a way of encouraging the occasional commuter to move up to a monthly or annual pass. or just enjoying the ride to downtown attractions. Express check-in kiosks. put it in a company press release. Whether they are waiting at a bus stop. The objective of the program is to understand customer preferences and then answer these requirements using a CRM solution that delivers promotions that they can genuinely appreciate because they are personal and relevant. rather than adding to the problem. Maple Leaf Lounges. Pierre Bourbonnière has served as Director of Marketing at STM for the past five years. This is more achievable thanks to STM’s c-level decision to harness mobile to take its loyalty programs to the next level. behaviors. To achieve this ambitious goal required a revolutionary new loyalty program. the mobile app approach effectively places the STM at the forefront in the field of customer relationship strategy. Precision Marketing can also help smooth out peak travel by advising customers of better options. to deliver offers and notifications that are suitable to the real-time situation and personalized to the individual customer. They’ve told us that they want access to solutions in mobile technology that will improve the customer experience. which connects directly with commuters on the move has the potential in all verticals. 212 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 213 .

Mobile operators advised their customers to text. what is hailed as the biggest storm to hit the North Eastern seaboard in history. some enterprising people prepared for the imminent rise in mobile use by setting up services where consumers could create a Twitter account. 2012. Companies should also harness mobile to deliver information and assistance easily and quickly to their customers. Across the area companies prepared for the impending disaster.PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED) CONNECTION WITH YOUR CUSTOMERS Utilities Customer Engagement By Haridas Nair. SAP Typical engagement model Hurricane Sandy. Twitter reported more than 20 million tweets about the storm between October 27 and November 1. Mobile usage showed a peak in New York City on October 29. While during times of crisis and power outages. Improving self-service is key to increasing customer satisfaction and encouraging lasting loyalty. In fact. maintaining a customer link during such disasters has become a challenge. Even during normal days mobile has its advantages as a channel that allows these companies to extend the reach of their services to their customers. saw those affected turn to their smartphones to get information from utilities companies about when electricity would be restored. During an emergency. this shouldn’t be the only interaction between utilities companies and their customers. For utilities companies. Storms like Hurricane Sandy show that call centers and Websites aren’t effective when it comes to informing customers. allowing utilities companies to reach out to customers and thus maintain a customer link. "don’t call” once the storm hits. Meanwhile. when Hurricane Sandy whipped across the Eastern seaboard. Indeed. and we can be sure a significant number originated from people using a mobile device. Vice President. mobile offers tremendous value as it reduces the burden and cost on call centers and enables Confirm restoration of service Welcome and validation Action your desire • Request services info • Start/stop service • View bills • Make payments • Update account • Analyze consumption View outage information Report service issue • Capture a photo • Select an address • Enter information • Receive confirmation Service issue status Figure 1: Based on data from the author 214 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 215 . But mobile is not just a robust and critical channel in the wake of natural disasters. people use mobile devices to gain information to determine and plan the impact of the disaster. mCommerce Products and Solutions. allowing them to send and receive tweets via SMS. mobile provides a perfect channel.

integrate and orchestrate transactions across multiple backend systems. should consider the following four requirements: Scope of channels. The service must offer support for mobile phones. This represents an ideal way to initiate a two-way interactive communication. What would a customer expect and what should a utilities company need to deliver? Figure 1 shows a typical engagement model. In fact an outage provides the perfect opportunity for a utilities company to respond using mobile to deliver a push notification or text message. detailing the relationship between what customers would want to accomplish and how mobile can support this. Keep in mind that certain actions that require the customer to type in data are best handled via the Web channel. update their data and change service. The service should be able to scale to tens of thousands even to millions of users. Support applications. as well as access updates and view outage information. The functionality that customers expect on their mobile or tablet device include services around bill payment. as well as messaging and online channels. where perhaps the most used function is checking your balance. Span of platform. Utilities companies planning and designing such a customer-focused mobile service. and the ability to report service issues. It’s an exchange that ensures crews can fix lingering problems before they leave the area. one which can handle business logic. It is a full-fledged mobile consumer service. The platform that will support such a service needs to be a robust transaction platform. Key capabilities Clearly. the best solution is one that provides richness of functionality required for engaging with customers on the mobile. backed by a platform that SAP utilities Figure 2: Based on data from the author 216 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 217 . one that also allows the utilities company to receive immediate customer feedback on restoration. The service needs to support Web or mobile Web apps that enable customers to register. consumption analysis. and even handle payments.self-service. Scale of service. mobile allows utilities companies to begin and maintain a two-way dialog with the customer. provides the robustness required for a consumer mobile service. Encouraging engagement Mobile is an ideal channel for interaction and engagement. one that has to handle peak loads. More importantly. smartphones and mobile Web. what could such an application look like? What functionality would it need to support? Unlike a mobile banking app. closely followed by bill pay – utilities companies must be much more focused on taking customer self-service to a new level. An application that can support these capabilities is more than just another mobile app. So.

Additionally. he was responsible for driving the strategy and evaluating emerging technologies for the three to five year horizon within Information Technology Solutions Group at Sybase. In the background thermostats connected to the network can work in conjunction with smart meters to provide customers proactive advice on managing their energy consumption and provide optimum setting recommendations. Interactive tools can also be provided in the application to understand the consumption patterns of individual rooms and devices. With this goal in mind. and the extension of Mobile Commerce to new industries like Utilities and Retail at SAP. By delivering analysis of usage customers can better manage their consumption. will trigger a move to smart meters as consumers demand more information about their services delivered to their mobile. they will also reap rich rewards as customers move to self-service channels to solve issues. and manage their billing and payment history on the go. This. Once consumers become comfortable consuming information about utilities use on their mobile. Prior. Understanding usage is the first step to managing consumption. in turn. They are also empowered to use selfservice and accomplish what they set out to do on their own terms. Utilities companies will not only benefit from delivering a convenient and cost-effective service to their customers. report outages or simply check their bill. allowing them to regulate the settings for heat and air conditioning remotely anytime anywhere using their mobile phone. anytime — convenience they are sure to appreciate. Enabling customers to perform a simple task on their mobile goes a long way toward encouraging customer engagement and cementing long-lasting loyalty. key capabilities necessary for such an application would need to include: • View and pay current or past bills • Update Account Information • View service details and report service problems • Display outage information or report a new outage • Receive important alerts from the utility company The benefits of moving to a mobile-enabled engagement channel are many. The mobile channel also enables delivery of important service notices that can either be pushed to the app or requested from inside the application. 218 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 219 .In fact an outage provides the perfect opportunity for a utilities company to respond using mobile to deliver a push notification or text message. access timely information. Haridas Nair is responsible for driving the strategy and solutions for Multi-Channel Banking and Mobile Commerce spanning Mobile Banking. The future of Utilities Customer Engagement on mobile is just dawning. customers have access to their account anywhere. be notified when payment is due. This paves the way for utilities companies to deliver new offers and services that are personalized right into the application — precisely when customers are using it Management and engagement Another benefit of moving to a mobileenabled engagement channel is the data and insights it delivers both utilities companies and their customers. They can even report services issues using the in-built camera on their mobile device. Mobile Payments. And a bright future it is! The possibilities are endless and customers will benefit tremendously from being able to use mobile to manage their consumption. Customers can pay at their convenience. As utilities companies deploy such solutions to customers they will also learn more about usage and interaction. they will also welcome other services that put them in control. Mobile Money across Banking and Telco industries. and control energy use remotely.

sparking new excitement around mobile payments opportunities. and creating some confusion around the many different categories and subcategories of mobile payments. cloud-based wallets) that organizations are using to enable commerce. PART 7: 220 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 221 . Fast forward.PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL Innovation around mobile payments has been driven by the desire of ecosystem players — banks. involve merchants and empower consumers to pay the way(s) they want. NFC. mobile operators and third party providers —to enable person-to-person payments and develop mobile wallet strategies to secure competitive advantage. we explore the strategies of leading players and retailers (PayPal Germany. In this section. and mobile commerce has arrived. Starbucks) and evaluate the many mobile payments technologies (QR codes.

Starbucks customer transactions through the mobile payment channel are estimated to have risen more than 20-fold in the last 7 quarters. and also makes it easier for customers to earn them. Between August 27 and September 9. we estimate that Starbucks customers had carried out 26 million mobile payment transactions. and the app even helps give directions to the nearest stores. and Starbucks is leading the way globally in terms of demonstrating a successful implementation of a mobile payment solution. beverages and coffees and learn about new offers. Customers can associate their prepaid ‘My Starbucks Rewards’ cards with this application that then enables them to use it for their day to day purchases at Starbucks’ outlets. Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 223 . Consumers can also use the application to top-up their My Starbucks Rewards card balance. called ‘mobile pay’. Since its launch in January 2011. as a feature of its iOS and Android app in January 2011. Starbucks mobile payment solution Promoting the channel Starbucks has run a number of campaigns. Starbucks ran a mobile advertising campaign through its mobile payment channel to increase store traffic. This is a substantial flow of cash.PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL Starbucks: A Mobile Payments Case Study By Sam Gellar. explore the nutritional value of food. Analyst. 2012. One-time setup activity In-store activity Customer downloads Starbucks App on her mobile phone Or Customer downloads Square Wallet on her mobile phone She places her order and plays using the mobile app on her handset Handset generates a barcode which is scanned at the coffee shop Customer associates her Starbucks card with the download app Or Customer associates her credit/debit card with the Square Wallet Customer enters a Starbucks outlet with her mobile handset Customer gets reward points in her account which can be redeemed later Figure 1: Based on data from Portio Research Ltd Note: as of January 2013 rewards program is not associated with Square Wallet Key Performance Indicators – Starbucks U. and it has increased transaction volumes successfully. at the end of the first full year of being in service. In Q4 2012 Starbucks also struck a partnership deal with Square and launched its mobile wallet service across its stores. and initiated reward schemes to encourage its customers to switch to using the new mobile payment channel. In October 2012. 222 As shown in figure 2 below. Starbucks ran a mobile campaign called 12 Star Dash to encourage customers to use the Starbucks mobile app to pay for 12 drinks in order to receive a US$5 eGift. with the holiday quarter witnessing a near 2-fold increase quarter-on-quarter. the majority of whom voluntarily receive communications from Starbucks. the enhanced loyalty program offers fully digital rewards. S. Portio Research Starbucks launched its mobile based payment system. Though the ‘My Starbucks Rewards’ loyalty program already boasted more than 10 million members. and revenue for its new Verismo System home products.

monthly mobile payment transactions crossed the 1 million mark in March 2011 for the first time. mobile payment transactions per month (In million. Q1 2011E-Q4 2012E) Starbucks U. As figure 3 depicts. Over the next 224 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 225 . the number of mobile payment transactions is estimated to have risen exponentially. January 2011E-December 2012E) Mobile payment transactions per quarter (in million) 45 40 35 30 25 20 15 10 5 0 2 Q1 2011E 4 Q2 2011E Q3 2011E Q4 2011E Q1 2012E Q2 2012E Q3 2012E Q4 2012E 7 13 27 42 Mobile payment transactions per month (in millions) 18 16 14 12 10 8 6 4 2 0 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 31 16 2011E Figure 3: Based on data from Portio Research Ltd 2012E E = estimated E = estimated Figure 2: Based on data from Portio Research Ltd Thereafter. and quickly reached the 3 million mark by October 2011 in a short span of only 9 months since launch.Starbucks U. mobile payment transactions per quarter (In million.S. crossing the 26 million transactions per quarter mark by the quarter ending June 2012.S. realizing a more than 300 percent year-on-year growth rate. We estimate that Starbucks ended the last quarter of calendar year 2012 with 42 million mobile payment transactions during the holiday quarter.

Starbucks U.S. a year after launch.S. January 2011E . Figure 4 shows the various mobile payment transaction milestones achieved by Starbucks U. implying a weekly rate of more than 2 million mobile payments transactions for Starbucks U.S. Q1 2011E-Q4 2012E) Mobile payments revenue per quarter (in US$ million) Cumulative mobile payment transactions (in million) 160 140 120 100 80 60 40 20 0 August 2011: crossed 10 million April 2012: crossed 50 million December 2011: crossed 25 million September 2012: crossed 100 million 200 180 140 120 100 80 40 60 40 20 0 8 Q1 2011E 189 137 118 17 Q2 2011E 53 30 Q3 2011E Q4 2011E 69 Q1 2012E Q2 2012E Q3 2012E Q4 2012E M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 2011E Figure 4: Based on data from Portio Research Ltd E = estimated Figure 5: Based on data from Portio Research Ltd 2012E E = estimated 9 months.December 2012E) Starbucks U. cumulative mobile payment transactions (In million.S.S. figure 5 charts the revenues achieved quarterly by Starbucks U. cumulatively. from the date of service launch and up to the end of December 2012. In line with the number of transactions. thereafter marching on to cross the US$100 million mark in 2Q 2012. the revenue from mobile payment transactions has also increase more than 20-fold over a period of 2 years. this figure is estimated to have crossed the 10 million monthly transactions mark. Revenues are estimated to have first crossed the US$ 50 million mark in the 4th quarter of 2011. and the next 50 million a mere 5 months. As far as revenues driven through the mobile payment channel are concerned. In total. and inching close to the US$200 million mark in 4Q2012. through mobile payments received.Starbucks U. We forecast that the next 150 million transactions thereafter will be completed in less than 4 months total.S. is estimated to have carried more than US$600 million in revenues from 226 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 227 . The first 50 million transactions took 16 months. mobile payments revenue per quarter (In US$ million.

mobile payments revenue 94.S. cumulative mobile payments revenue (In US$ million.3% Cumulative mobile payments transactions (in millions) 700 600 500 400 300 200 100 0 Crossed US$ 50 million in revenue Crossed US$ 100 million in revenue Crossed US$ 400 million in revenue Non .7% Q1 Q2 Q3 2011E Q4 Q1 Q2 2012E Q3 2012E E = estimated Mobile payments revenue 6. The various revenue milestones are captured in figure 6. Non .3% Figure 7: Based on data from Portio Research Ltd E = estimated 229 228 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets . January 2011E-December 2012E) Starbucks U. revenue break-out (in percent. and Starbucks is leading the way in terms of demonstrating a successful implementation of a mobile payment solution.S. This is a substantial flow of cash.Starbucks U.S. As a percentage of Starbucks U.7% Figure 6: Based on data from Portio Research Ltd transactions carried out by customers using the new mobile payment channel. ending December 2011. mobile payments accounted for just over 1 percent in its first full year of payments revenue 98. 2011E and 2012E) 2011E Mobile payments revenue 1. total revenues.

everyone always has their phone to hand •• Requires no signature •• Receipts are digitally delivered into the Square app installed on the phone •• Enhanced overall customer experience during check-out Supporting the Starbucks Card as a payment source Making the My Starbucks rewards benefits available to the Square Wallet while paying Figure 8: Based on data from Portio Research Ltd 230 231 . as depicted in Figure 8. This is shown in figure 7. and possibly cheaper. Sam Gellar has more than six years of experience in the telecoms space. simplified. revenue planning and industry research and data analytics.December 2012E) Revenues are estimated to have first crossed the US$50 million mark in 4Q 2011. and handling a wallet. a year after launch. covering both the fixed-line and wireless sectors. aesthetically pleasing mobile POS terminal that facilitates frictionless payment acceptance •• Enhanced customer experience during check-out •• Transparent.way forward (In US$ million. Tipping Benefits and success factors For Starbucks •• An extremely simplified. Way forward The Square Wallet will further enhance the payment experience at Starbucks by including additional features. however. credit card processing fees Ability to pay with the customer’s name/ hands-free checkout This contribution. January 2011E . For customers •• Hassle-free payment channel – no more fumbling with cash or credit cards. has grown rapidly.Starbucks mobile payments . Geller specializes in VAS related product management. and our estimates show that it is already nearing 6 percent for the second full year ending December 2012.

also spoke out at against NFC at the DLD conference in Germany earlier this 1. who says 'I want this NFC thing. and public Wi-Fi networks. A secure element (SE) is a tamper-resistant platform (typically a one chip secure microcontroller) capable of securely hosting applications and their confidential and cryptographic data (e. there are many other payment scenarios that NFC cannot support. NFC payments fail to accomplish the single greatest need of merchants. if NFC will become the standard for mobile payments." • Keith Rabois. several industry executives have recently voiced these concerns. such as when paying for tickets at a subway station. however. NFC is much easier to use and more secure than existing versions of Bluetooth or other wireless technologies. or even pay for goods and services. especially when the payer and the payee are not connected to a network. which is reducing transaction fees. Most retailers were waiting for widespread smartphone adoption before worrying about mobile payments. president of PayPal. and technology companies defined the Secure Element1 to securely store private data (such as credit cards) on a mobile device and transmit that data using NFC. NFC is a good technology for some mobile payment scenarios.S. such as transaction fees. POS costs. Simply put. when NFC payments were designed. Merchants are also concerned that NFC payment solution providers would serve up advertisements for products from competitive retailers. Interestingly. merchants and retailers were absent from the discussion. It remains to be seen. Mobility Solutions for Retail.PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL Weighing The Alternatives To NFC By Mickey Haynes. Mobile payments with NFC and the Secure Element was designed many years ago. to conclude that the ideal solution may be a combination of 'all of the above'. Others did not understand the sweeping changes that mobile payments could bring. as well as many others unrelated to mobile retailing. VP and Assistant Treasurer of Wal-Mart." • David Marcus. many merchants and retailers have their own private label credit cards that they want to encourage customers to use because they have low transaction costs. and credit card dispute resolution overhead. ubiquitous. If retailers and merchants had been part of the discussion. thus requiring minimal changes to the existing payment ecosystem. points out that NFC has no value proposition for consumers and merchants and stated: "I've never met a single merchant in the U. In addition. there are other payment methods that have evolved that are far more focused on harnessing the unique capabilities of mobile to enable payments and — ultimately — encourage engagement. which tends to discourage rather than encourage use. will help to drive widespread adoption of NFC over time. they would have insisted that any payment solution should decrease the costs and risks of plastic credit and debit cards. money transfer and omni-channel payments. SAP Near Field Communications (NFC) is an interesting new technology enabling the exchange of data between two machines. NFC is a wireless technology to exchange data between two machines that are close to each other. key management) in accordance with the rules and security requirements set forth by a set of well-identified trusted authorities 232 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 233 . More importantly. The aim was to enable customers to store credit cards on their mobile phones instead of in their wallets. stated "…I don't think [NFC is] becoming a technology that will handle payments. Global Principal. • Mike Cook. Also. Unfortunately. These scenarios. NFC opens many exciting scenarios for shoppers such as the ability to tap a product and see a video. such as prepayment. However. banks.g. unlimited 3G and 4G networks. COO of Square. before wide adoption of smartphones. NFC effectively blocks merchants from getting these cards to the top of the wallet. mobile operators. This evaluation of FOOTNOTE the alternative mobile payment technologies outlines the benefits and drawbacks. Several years ago. PCI compliance costs. interact with a smart poster.

Pros A Cloud Wallet offers great potential. bypassing the queue. neither the customer’s mobile device nor the POS are connected to a network. She then pays for items form her phone. etc. blogs. to transfer money to other individuals. to prepay for goods and 234 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 235 . to bypass the POS. such as coupons and offers. Based on data from the author FOOTNOTE 1. kiosk. the retailer’s customer relationship and mobile marketing strategy • Facilitate top of wallet capability for the retailer’s private label and gift cards • Provide a holistic solution that supports different mobile and multi-channel payment scenarios • Improve. movie tickets. ecommerce engine. etc. stored value. In the Aisle Buying scenario.year1. "Retailers say NFC stands for Not For Commerce. the customer just gets another phone and accesses her data in the cloud. A customer should be able to pre-order and pre-pay for items like coffee. tablet. the customer selfscans items as she shops. The retailer also benefits. It has the ability to store all payment types — credit. and other self-serve environments. or to make purchases on devices other than phones. Nearly any kind of data can be stored in the Cloud Wallet. the ideal mobile payment solution must: Key aspects of an ideal mobile payment solution Omni-channel Pay ahead Pay at POS (offline) In some cases. the retailer can reduce its dependency on expensive credit/ debit infrastructure and business processes. groceries. Following is the use case for each mobile payment method. which means lower transaction costs. In all of these scenarios. food. including mobile. Aisle buying • Reduce transaction fees associated with credit and debit card transactions • Work with. where it is stored securely. it is important to understand what retailers expect from a mobile payments solution. arguing that NFC might actually make the retail experience worse. bypassing the POS. The Cloud Wallet can easily be connected to personal finance software to upload itemized transaction data and to manage budgeting and forecasting. bank accounts.. she need not worry about canceling all her cards if she should ever lose her phone.— in the cloud where they can be accessed anywhere and by any channel." he told the audience. outlining the benefits and drawbacks to each. Pay at POS (offline) If either the customer’s mobile device or the POS is connected to the network it is considered an online transaction. train stations. If it does happen. or any other kind of personal information. the customer’s Cloud Wallet connects to the payment device (POS. Cloud Wallet In a Cloud Wallet.S. not counter to.) through a cloud payment service to make the transaction. From a retailer’s point of view. This method offers a wide variety of payment options and a very high level of security.wsj. etc. or at least not degrade. This is a common scenario for vending machines. Customers should be able to buy products from the retailer’s eCommerce site as well as in store products. Since credit card data is never transmitted to the retailer. Figure 1. While it is beyond the scope of this article to examine the merits of these statements and their applicability to other markets outside the U. Since the customer’s credit card data is never actually stored on the phone.. the customer experience at store checkout A holistic mobile payment solution must therefore handle the five key payment scenarios outlined below. A mobile payment solution should be omni-channel. and have it ready when she arrives. debit. Cloud Wallets can be used to do transactions at the POS. gift card. the customer stores one or more forms of payment in a secure online account. PC. or POS. Customers should be able to purchase items from the store and pay for them in advance.

A customer who buys a mobile gift card is much more likely to spend faster and is less likely to go to a competitor.
Cons Today, Cloud Wallet transactions that are funded by credit/debit cards would be charged at card-not-present rates, which are higher than a standard swipe fee. POS modifications may also be required to communicate with the Cloud Wallet. The retailer would need to carefully monitor the customer experience to ensure that it would not slow down the queue. Evaluation The Cloud Wallet scenario does not immediately appear to reduce transaction fees, which is one of the primary goals of the retailer. However, new security offered by mobile devices like multi-factor authentication and location awareness could lead to a much more secure model than mag stripe credit cards. New security features could also lower transaction fees. It is widely expected that, in the near future, credit card providers will offer new ways of handling Cloud Wallet transactions that would be charged at card-present rates.

A private Cloud Wallet (one that is built by the retailer for that retailer’s own customers) could be very interesting, but customers will not want to set up 100 different Cloud Wallets with 100 different retailers.

Cons POS modifications would be required to accept the new tender type. Competition for customer mindshare could develop since PSPs are very interested in collecting data on customer spending habits and selling advertisements that could enable a third party to pop up an advertisement at the decisive moment in an attempt to steal the sale. Evaluation This solution does have the potential to reduce transaction fees. What's more, it could work with all of our key payment scenarios. However, it might open up a channel to advertising that could threaten to get between the retailer and his customer. This model is very attractive, but it seems there is money on the table. The retailer might actually be able to get better rates than the PSP is offering by simply doing what the PSP is doing. The PSP can make money at both ends, charging both the retailer and the customer a transaction fee. If customers are willing to pay extra for debit and credit, then retailers should just build their own Payment Provider system without the risks of opening the door to a third party.

While working out the transaction fee issue, the Cloud Wallet could be used to fund a stored value account, or gift card, to reduce transaction fees. Cloud Wallets could also link directly to bank accounts for ACH/EFT transfers, which would nearly eliminate transaction fees. Realtime debit to checking accounts would be the ideal solution for the retailer. The Cloud Wallet offers maximum flexibility to pay with whatever instrument a customer chooses, however they choose, through any channel. It supports all of the four key payment scenarios that we have outlined. To avoid the card-not-present fees, a Cloud Wallet could be integrated with an NFC wallet. This would enable NFC to be used for checkout at POS and cloud to be used for everything else. Since complex POS modifications would be required, Cloud Wallet providers need to work with POS software companies to integrate their capabilities directly.

Payment as a Service In this payment scenario a customer funds an account with a Payment Service Provider (PSP) using the payment method of their choice. If the consumer chooses credit or debit as a method, the customer pays the transaction fee. EFT or ACH transfers are usually free. Once the consumer has funded the account, she can begin shopping at any retailer who accepts the PSP. The PSP guarantees retailers a fixed rate transaction fee that is usually more expensive than debit, but less expensive than credit. Pros The average cost per transaction for the retailer is likely cheaper than what it pays today. This new form of tender eliminates the dependency on debit/credit cards infrastructure and PCI compliance.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


The Cloud Wallet offers maximum flexibility to pay with whatever instrument a customer chooses, however they choose, through any channel.

Mobile Gift Card The most successful mobile payment solution so far is the mobile gift card. In the U.S. Starbucks, Target, and Dunkin’ Donuts have adopted this strategy. In this scenario a customer buys a mobile gift card using a credit or debit card. The customer can top up the gift card, or set parameters to auto top up. To pay, the customer simply launches the mobile app and displays the barcode. The POS is equipped with a barcode scanner that reads the barcode, which is just a gift card number, and processes the transaction as it would if the consumer had an ordinary gift card. Pros A customer who buys a mobile gift card is much more likely to spend faster and is less likely to go to a competitor. Sales velocity and repeat business increase. The app is also very easy to use for consumers. There are no software changes required at the POS since the barcode simply emulates a gift card number, which the system already knows how to process. Cons Since the customer tops up her gift card with credit/debit card information that is

stored in the cloud or on the mobile phone, the retailer must pay a card-not-present transaction fee which is higher than a swipe fee (see Cloud Wallet section). If the card could be topped up via a direct debit (EFT or ACH) transaction rather than to a debit or credit card, much of this fee would be eliminated. There is a hardware investment required to purchase barcode scanners that can read the barcodes off a mobile phone. The app would be most successful at retailers with frequent re-purchase cycles, such as grocery stores, restaurants, and gas stations. Customers may not want to download an app from every retailer with whom they want to pay with mobile. Ideally for the customer, one app (like the Starbucks app) could be used to pay at many different retailers. Evaluation This solution does not reduce transaction fees because of card-not-present transactions. However, it could be changed to use direct debit so that it actually would reduce transaction fees. This solution would work very well with a retailer’s customer strategy. It could also deliver all of the key

payment scenarios. Overall, Mobile Gift Card payments would be much more lucrative if the top up transaction were cheaper (or free); if the POS hardware was not required (or was cheaper); and if it worked ubiquitously across many retailers. The takeaway In this evaluation of mobile payment technologies, it's clear that there are upsides and downsides to every mobile payment method. But rather than focus on advantages and shortcomings of each, it's important to take a Big Picture view and see the massive benefits of a solution that combines them all. Indeed, the best solution would be a single mobile app that works similarly to the Starbucks app but would work at many different retailers and be based on direct debit rather than on card-not-present transactions. This would dramatically lower transaction fees for retailers and offer a very convenient payment solution for customers. Meanwhile, an integrated NFC + Cloud Wallet approach has the potential to offer the most flexibility while keeping

transaction fees at card-present rates for some mobile payment scenarios. To deliver the ideal mobile payment solution key players in the ecosystem — including banks, mobile operators, retailers, device manufacturers, and others — must come together, to solve challenges and maximize benefits. This will allow them to not only satisfy their specific business needs, but it will ultimately equip them to engage and win over the customer. Mickey Haynes leads business development globally for mobile in the Retail and Consumer Products industries at SAP. In this role, he consults with key global Retail and CP customers to develop mobile strategies, architects mobile solutions with internal and partner development teams, and evangelizes strategy within SAP. Previously, Haynes was the Principal Mobility Architect for The Home Depot, the fourth largest retailer in the U.S., where he initiated the mobile commerce program and led the enterprise-wide mobile strategy.


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets



A Serious mPOSition
By Sirpa Nordlund, Executive Director of Mobile Financial Services, Mobey Forum

In the last eighteen months there have been more than 30 mobile point of sale (mPOS) solutions launch around the world. This article considers the implications of this trend for banks during what is a pivotal time in the evolution of their customer relationships with merchants.
We have all heard predictions of how emerging mobile payments will reduce or even kill cash, but in terms of actual solutions the market has remained quiet, with one exception: the mPOS device, which has begun to launch to market throughout Europe, North America and Asia. This fast growing cash killer has not emerged via consumer handsets, but through micro merchants, who have until now, relied on cash as their primary means of accepting payment. With mPOS devices growing in popularity, and with merchants showing a real interest, you can tell mobile payments are starting to get close to the mainstream. A variety of stakeholders are getting in on the act. Social payments company, iZettle, for example, recently launched in the U.K.

with mobile network operator Everything Everywhere. The offer enables merchants to accept transactions using an iPhone, iPad or Android-based device with a neat plug-in card reader. Hot on its heels is O2, a mobile operator that has also announced the launch of a new mPOS service in partnership with Visa Europe and Global Payments. This service allows merchants to accept credit and debit card payments by connecting a chip and PIN pad accessory to their existing smart phone or tablet.

be able to achieve such volumes in the time required to ensure commercial sustainability, so it will be no surprise to see many of these start-ups dropping off the mPOS map as the market continues to take shape. Out of all the players, the banks have been notably hesitant to engage with mPOS technology, and not without good reason. Most of the mPOS devices launched in Europe are chip and signature (or even magstripe and signature) and are, therefore, not EMV compliant. The lack of certified devices available on which a user can enter a PIN (noting that a mobile phone does not constitute a ‘certified device’) has been one of the main factors slowing the development of this new segment, and will inevitably result in an increase in fraud in the market. These are important factors to bear in mind when considering a possible roll-out of a new acceptance infrastructure. The development of this ecosystem is a significant step for all stakeholders as the industry moves away from a traditional closed-loop environment to open distribution, where suddenly becoming a merchant simply requires a user to download an app onto a mobile device and respond to a few questions. Distribution has gone digital.

What mPOS has done is provide a vehicle for third party stakeholders, like mobile operators and innovative start-ups, to engage merchants in territory that has traditionally been held by the banks and payment schemes alone.

Nimble newcomers However, there are concerns about how the market is developing. Most mPOS device providers are start-ups. To their credit, these start-ups have been able to innovate in an area where there has been very little movement for the past 30 years. Most of the solutions currently available, however, have been built on newly established payment networks, which may well increase security risks for a stand-alone payment infrastructure. Also, in order to turn a profit for the provider, mPOS devices need to process a high volume of transactions. Not all providers will


Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets


we are already beginning to see mPOS solutions climbing up the value chain to the bigger and more lucrative high street stores. but especially to merchant customers. It can enable them to refine. And to ignore this market. will soon see an mPOS terminal capable of integrating a complete merchant database. Equally important is for banks to stay on top of the technology evolution and develop and follow a solid technology strategy within product line development. convenience purchases from big branded merchants are also well suited to this model. Reaching new heights As this continues. This segment includes those that have not been able to afford an expensive EMV1 certified point-of-sale (POS) device. personalize and market their range of products and services in accordance with individual customer preferences. where she held several management positions and was also involved with the business development of NFC. So. This erosion of the banks’ corner comes at a difficult time.In 2013. one that will defend their traditional space and guard against them being marginalized by other players in the ecosystem. and those that for a variety of other reasons have no available payment option aside from cash. Every bank knows that maintaining rock solid relationships with merchant customers is fundamental to its future prosperity. account management and more. Lower cost. which have historically enjoyed some of the highest levels of customer loyalty across any industry sector. Mobile Financial Services (MFS) stakeholders widely acknowledge that value added services. what they are offering. it is hard to see how they will be able to lay claim to any of the resultant streams of data. together with the value based schemes that accompany this kind of sale. Tapping new segments New mPOS devices are initially targeting an untapped segment: the micro merchants. The value chain. This level of intelligence is needed if a sound market engagement strategy is to be formed. mobile couponing and loyalty rewards will play a vital role in driving widespread consumer adoption of mobile payments. inventory management. it is vital that banks stay close not only to their customers. Prior. Nordlund served ten years at Nokia. and how their customers value the increased convenience and opportunities. investing time strengthening relationships as the MFS landscape evolves. some of the most successful providers. Merchants on the other hand. Euro-pay. Even though the current market entry point for mPOS is via micro merchants. but especially to merchant customers. such as JCPenney. The customer profiling data generated through value added services can be hugely valuable to banks. many of In 2013. As the hardware continues to develop. it is vital that banks stay close not only to their customers. to engage merchants in territory that has traditionally been held by the banks and payment schemes alone. especially high street retailers. along with supporting functionality for customer interaction. marketing. such as e-voucher promotions.S. FOOTNOTE 1. and is responsible for the direction of Mobey Forum initiatives and for overseeing the operational management of the group. these practices are unfamiliar to banks. well known stores in the U. together with those with the biggest investors. like mobile operators and innovative start-ups. just at a time when the banks would really benefit from forging closer ties with their merchant customers in order to shore up their expertise in MFS. so if the banks don’t establish a presence here. they are gradually being squeezed out of the market. Sirpa Nordlund currently serves as Executive Director of Mobey Forum. These factors mean that this is a segment with no competition. is to ignore a much bigger picture. investing time strengthening relationships as the MFS landscape evolves. which started from e-receipts that enable customer recognition and a direct marketing channel. What mPOS has done is provide a vehicle for third party stakeholders. Nordstrom and even fast food chain McDonald’s are now using mPOS devices to reduce queues and make the payment process as pain-free as possible. are experts. mPOS solutions will play a key role in collecting and channeling this data.. Only by doing so can they hope to maintain a watch on who else is approaching them. mobile merchants who do not have continuous access to electricity. MasterCard and Visa 242 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 243 . Large. Unfortunately. will climb way up into the clouds.

In Germany PayPal has completed a successful trial of its PayPal QRShopping solution and shares its strategy to change the entire end-to-end shopping experience across all screens. companies jockeying for position. send money and request money immediately through their mobile phone. nor the disruptive players such as Google and Apple have a role in our value chain. In 2013 PayPal expects to process US$20 billion in mobile payment volume. And. In recognition of this shift PayPal is working today to secure its competitive advantage as a firstmover in cross-channel commerce. To this end PayPal enables payments through mobile Web or mobile apps. Enabling mobile payments and commerce is paying dividends for PayPal. credit cards or promotional financing. And. Anywhere And Via Any Screen By Tobias Zadow.PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL PayPal: Enabling Payments Anytime. starting with mobile. an area we feel will be key to differentiation moving forward. depending on whether the customer uses plastic cards or accounts. but that hasn’t stopped companies from competing for advantage. this milestone has been reached. In practice customers send money without sharing financial information. In the interim it’s critical to enable commerce using the channels consumers currently have at their disposal. payments — and this value chain — will evolve to bridge commerce in the digital and physical worlds. consumer behavior the company hopes to inspire — and influence — by leveraging existing technologies such as QR codes to bridge the physical and digital worlds. The space is crowding fast. where proximity technology plays a central role. there is the bank or the credit card company. mobile operators and credit card 244 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 245 . But PayPal is also fast becoming a giant in mobile commerce. of course. There are no clear winners or losers among the enabling technologies. releasing a mobile app available across multiple platforms that processed US$14 billion in mobile payments volume in 2012. Business Line Manager Mobile DE. Success is all about making the right technology choices to have huge impact on global commerce and the consumer experience. more than 3x the volume it processed the previous year. PayPal PayPal is perhaps best known as one of the leading electronic payment providers in the online e-commerce world. Neither mobile operators. It’s really quite simple: there is the merchant and there is PayPal. While PayPal is thought to have its roots firmly in online commerce. Lines blur The lines between e-commerce. and the channel through which the purchase is made becomes less and less a distinguishing factor. with banks. In 2012 the company processed US$14 billion in mobile payment volume – more than 3 times the mobile payment volume of US$4 billion it processed in 2011. mobile commerce and commerce are blurring. Of course. the company was actually founded to transfer money between Palm Pilot PDA mobile devices back in 1998. PayPal is clearly on a path that will also see it integrated as a payment method at the point-of-sale. prompting PayPal to tap back into its corporate DNA to power payments using the mobile channel. Another area of interest for PayPal is payment at the pointof-sale. with the flexibility to pay using their account balances. Next on the company agenda is multi-channel commerce. bank accounts. The idea was a bit ahead of its time and so the founders decided to focus energies on e-commerce until mobile finally crossed the chasm. Clearly. a mobile app for all smartphone platforms that allows users to pay for goods and services. At the end of the day it all becomes commerce. Moving forward it is clear that global commerce leaders will be the players that build the capabilities to enable commerce across all screens. The first step was the release of PayPal Mobile. To fully appreciate PayPal strategy in this area it is important to understand how we view the value chain.

According to the MasterCard Mobile Readiness Index1. Specifically. we use a standard QR code. we also build some integration to their system so that product information is synchronized. We embrace everything that makes sense to us as we work to provide customers a secure and stable way to transact. Overall. Thus. Sticking to our strategy of bringing out solutions based on existing technologies. The trigger can be a poster at a bus stop.” Specifically. Important lessons Vast differences between demographics also meant that merchants reported mixed results. is encouraging. if they so choose. an advertisement in a magazine. a flyer in a package. Importantly. willingness and usage of mobile payments. Of course. In practice the mobile app allows consumers to scan the QR code of a given item. the app lays the groundwork for a larger multi-channel approach that will allow our merchants to use the channels at their disposal — at that place and time — to encourage commerce. We also prefer to deliver solutions based on already existing technologies. through this app. connects directly to the retailer’s system. which is why we have launched a solution using QR codes.mastercard. mobile payments in Germany at the end of 2012 accounted for over ten percent of total payments volume processed by PayPal. For German consumers payments have to be simple and secure. Merchants have used all of these channels — and more — to enable the purchase of items through the shopping window offered by the app. where consumers can pay directly with PayPal. one that they set up the first time they connect their PayPal account with the app. a commercial on TV or a price tag modified to display a QR code. consumer uptake of mobile payments in Germany. We count over 30. In the back-end PayPal. indicating that a strong consumer awareness campaign could yield positive results. We expect these numbers to increase significantly over the next two to three years. Today the item will be delivered to the consumer. FOOTNOTE 1 mobilereadiness. we can say results since the launch in March 2012 have exceeded our expectations.In recognition of this shift PayPal is working today to secure its competitive advantage as a first-mover in cross-channel commerce. namely a mobile app that allows people to make payments without having to learn — or trust — a totally new way of transacting. Take flower shops. including major retailers. that way. Indeed. choose a special size or color and then add it to a virtual shopping basket within the app. where we count more than 12 million users. there is a bright spot: in actual usage Germany tracks more strongly than its familiarity numbers would suggest. QRShopping PayPal is 246 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 247 . Germany scores less than half the index average (nine percent versus 20 percent) in mobile commerce familiarity. However. They authorize the order with a four digit PIN. Germany has an excellent environment for mobile payments to grow and flourish — provided consumers awareness increases from its current low level. That is why PayPal Germany has focused its efforts on providing a simple solution. it also changes in our system. While PayPal prefers not to disclose the volume of payments made using the QRShopping app. but in the future it will be also possible for the consumer to take the purchase with them. one that sends people who happen to scan the code with an app other than the PayPal QRShopping app — directly to a PayPal landing page where they can read more about the app and the solution.000 downloads and dozens of pilots involving local merchants. This growth is truly significant if we consider that Germany is hardly a market you would associate with high mobile commerce readiness or awareness of mobile payments. up from around just four percent in the beginning the of the year. an area we feel will be key to differentiation moving forward. if the price changes in the merchant system. This way we close the circle and create an ecosystem that benefits our merchants. and there are currently no plans to support other devices. Since the trial took place in time for the holiday season. Impressive progress The PayPal QRShopping app is available for the iOS and Android platforms. PayPal Germany unveiled the PayPal QRShopping solution in 2012. the Index finds that Germany “scores low on consumer familiarity.

mobile is both an additional payment channel and a bridge that connects the different worlds of commerce. That way. mobile and even purchasing on the go. In one particularly interesting pilot.the merchants benefitted from the fact consumers had gifts and home decoration top of mind. shoppers would just need to install a small module. consumer electronics shops reported very positive results. an Apple premium reseller that traveled to trade shows in a remodeled school bus to showcase the newest innovations in Apple devices could finally close the circle. this demographic. The next step is to test more shopping contexts to identify the variables that come together to encourage commerce on the move. one that was already enamored of technology immediately embraced the idea of scanning a special barcode to order an Apple device from a location that wasn’t really even a store. this was a clear case where the mobile app was competing head-on with established consumer behavior — namely. mobile payments are a catalyst for all commerce: storefront. It’s all about finding out what works. it can happen where the customer is. which would be free and cater to commerce online and off. In other words. Interestingly. commerce is not linked to a place in the physical or digital world. And this behavior also gave us at PayPal an idea. anyplace and by any means. While some retailers will no doubt see this technology as a great way to enlarge their store virtually to create more revenues per floor space. At the other end of the spectrum. We also want to roll this solution out to a broader group of merchants and offer integration modules for several types of shopping carts. providing consumers a chance to literally buy what they saw on exhibit. the flower shops did see a jump in online orders processed by the standard online shop. showing that advertising QR codes on posters prompted consumers to remember to make their order from the shop’s Website. Put another way. Predictably. While numbers of orders were processed. online. Global perspective in consumer sentiment in Germany 100% 75% 50% 25% 16% 11% 20% 3% 4% 9% 19% 17% 21% 4% 9% 12% 8% 2% 5% 5% 9% 6% 0% P2P POS m-comm Familiar P2P POS m-comm Willing P2P POS m-comm Using Country score Index average Leading country score Figure 1: Based on data from mobilereadiness. The broad features of mobile devices allow us to change the way people are shopping and how merchants interact with consumers. and then sharing this information with our merchants. cash and cards — and a lack of awareness about mobile payments. our QRShopping solution also provides independent merchants the flexibility to conduct commerce when and where it suits the customer. We see mobile payments as a catalyst for innovation. confirming our observation that the customer demographic — tech-savvy consumers and early adopters — and context are decisive in driving multi-channel commerce. This is why 248 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 249 .com/germany Multi-channel commerce Our vision is to enable payments anytime.mastercard. In our view. But mobile is not the only screen.

Smartphones are with us in every situation — every day. car navigations systems and smart TVs — to deliver their offers and encourage loyalty. to sharing a product review with their social network. one that allows companies to connect with the people who use their apps and communicate helpful and relevant information. rewards. Last year Apple officially took the wraps off Passbook. deals. PayPal provides payment options that offer our ecosystem of merchants the flexibility they demand to transact the way they want. And it’s getting easier and easier to engage with apps considering the inclusion of GPS. Put another way. but is also means more transparency. retailers venues — and more. smartphones aren’t really smart unto themselves. mobile shopping doesn’t necessarily have to take place on a mobile screen. The rise of these third-party apps has created the need for a new kind of conversation. manage our social and business lives. and analyst research estimates that the total 45 billion app downloads forecast for this 250 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 251 . allows us to see beyond mobile to innovate the entire shopping process. it’s all about communication. all day. including Germany. boost loyalty. where he is responsible for driving mobile across markets including Germany. and increase customer engagement.PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES AT RETAIL How Apple’s Passbook Ushers In The Third Mobile Marketing Wave By Joe Beninato. Urban Airship Mobile shopping doesn’t necessarily have to take place on a mobile screen. and figure out what to do next and where. tablet. accelerometers. Our focus is to change the whole end-to-end shopping experience and that means picking up the customers very early in their shopping experience by empowering them to find product information or deals using their mobile phones. people are increasingly moving away from personal computers and using their smartphones to conduct business and make daily decisions. and will even grow. From researching products. The pressure on the transaction price in retail is significant. As a result. That’s where PayPal will come in with solutions to support our merchants and enable them. cameras and more. being a bank and an Internet player. The app aims to replace every paper ticket or plastic gift card consumers traditionally carry in their wallets.  Multiple studies find that the use of mobile apps surpasses use of mobile Web browsers. It’s the mobile apps that have given these devices the information and authority to play a major role in their daily lives. people also rely on their mobile phones at every stage of the consumer journey. and instant commerce that can take place because tight integration enables the ecosystem — PayPal. using the channels they choose. They’re the medium that’s with us wherever we go and allows us to record our daily routines. thus ‘mobilizing’ many of the loyalty programs and offers provided by airlines. and us. stay up to date. Tobias Zadow started his career at the commerce software provider Intershop. the merchant and the customer — access to up-to-date inventory and product information. Austria and Switzerland. It also means allowing them to choose between different payment methods once they make the decision to purchase. The consumers’ love affair with apps has changed the way we think about marketing. Merchants everywhere. However. More screens means more opportunity. are exploring ways to harness the many screens their consumers are exposed to in a routine day — mobile. Apple’s Passbook is the new mobile marketing imperative: learn how to leverage it to drive sales. ATMs. General Manager. PayPal can offer that flexibility because our own corporate DNA. a new feature of its iOS mobile platform that collects coupons and boarding passes into an easy-to-use interface on Apple devices including iPhone and iPod. to shopping. Ironically. where he worked on the mobile commerce product strategy. to take advantage of additional revenue potential beyond transactions in value added services such as couponing. Significantly. people reach for their smartphones. Digital Wallet. In 2011 Zadow joined PayPal.

Turning mobile upside down: Enter Passbook Solutions like Apple Passbook lower the barriers to entry for both businesses and consumers. For a bit of clarity. we have seen remarkable results that directly impact the bottom line. increase customer engagement and most importantly. Forrester included push notifications as part of its messaging mandate. As more companies fine tune their push messaging campaigns to drive mobile relationships with their customers. Web pages and banner ads. marrying their intent to mobile loyalty and reward programs. The next step in a mobile strategy is push notifications to help drive customer engagement and loyalty. received through email.  Marketers can more easily close the loop between mobile acquisition and conversion. making push notifications mobile’s primary system of engagement. while Major League Baseball trademarks and copyrights are used with the permission of MLB Advanced Media. push notifications are messages sent from the app directly to the devices’ ho me screen or to the notification center. SMS. Businesses can more rapidly and inexpensively have a persistent presence on consumers’ devices through passes that can be dynamically updated on the fly. 252 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 253 .P. recognizing it as a must have communications channel alongside traditional mail. We’ll assume at this point that we all understand SMS and its power to help acquire customers. Contrary to SMS messages. Push messaging allows businesses to send targeted messages that bring users back to the app to help build loyalty.year — double the number of downloads in 2011 — will be nearly seven-fold by 2016. Fortunately. And for both businesses and consumers the whole process is more streamlined. Marketers can more easily close the loop between mobile acquisition and conversion. telemarketing. while consumers have everything they need on one device with time-and location-relevant popups automatically helping them maximize their value. drive sales. integrated and convenient. there are several tools that can be used to help businesses build mobile relationships with their consumers. Starbucks pass is coming soon. which means no relationship with the carrier is required. Consumers can easily add passes to their phone. In 2012. social media and SMS. push notifications are sent over the data network. L. email. Effective push messaging has been shown to double app user retention and quadruple engagement. All rights reserved.

Think of Passbook as a hybrid connection to your consumers. regardless of vertical. The consumer downloads the app or adds a pass to Passbook. It’s a relationship that spans the following phases and stages. sending through email. The app stays on the consumer’s phone and is used regularly. what is your Passbook strategy? 254 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 255 . use of loyalty cards. The possibilities are endless with managing the entire customer lifecycle within Passbook and each company will have various uses for Passbook as all companies. a competitive lock-in. Mobile relationship cycles As with any marketing solution where marketers have clear methods for achieving their acquisition. email. Global mobile traffic (Growing rapidly to 13% of internet traffic) 13% in 11/12 15% 10% 4% in 12/10 5% 1% in 12/09 0% 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 Figure 1: Based on data from Urban Airship Mobile loyalty.and location-relevant pop-ups automatically helping them maximize their value.consumers have everything they need on one device with time. We are already seeing customers integrate payment into their mobile wallets. banner ads. Mobile trial. SMS. Another powerful opportunity for companies is mobile payments. you now have a direct relationship with them on their mobile device and you can now message them directly. This is encouraged through periodic and valuable push messages and additions of passes in the form of coupons. Mobile lifetime value. The consumer receives a physical promotion in the form of SMS. Many analyst reports predict significant numbers of consumer brands will integrate payment into their branded mobile apps by 2015. The consumer receives a message about a helpful feature from the app or redeems their pass. You extend an offer. Mobile discovery. The consumer receives a message from the app or from the pass. Mobile conversion. banner ad or a pass. the same can be said for the mobile relationship. The consumer does a search within the app store or a Web search. tickets. The consumer finds value in the app and uses it regularly. Mobile engagement. engagement and retention goals. and once the consumer downloads the pass to their phone. So. increasing customer engagement and driving sales. mobile payments and more. are interested in increasing brand awareness.

000 0 Smartphone Mobile phone Figure 2: Based on data from Morgan Stanely research estimates. 256 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 257 . location. This is all very powerful information coming directly from the device which is ALWAYS with your consumer.000 3. location history and so much more. Therefore the number of actual smartphone and mobile phones devices in use is likely higher than the user data shown here. eDaycare (acquired by Arrowsight). deleted it an hour later or made a purchase. KPCB Kleiner Perkins Note: one user may have multiple devices. You need to speak to your customers today and you don’t have time to wait for engineers to build passes and send messages for you. Since graduating from MIT with a degree in aerospace engineering. Despite tremendous ramp so far smartphone user adoption has huge upside 6. interests. Digital Wallet. You’ve segmented your customers by gender. he has worked with more than fifteen startups. When. investor or advisor. purchasing habits.Global smartphone vs mobile phone users 2012E To stay focused on your core business. And not having an app is no longer an excuse for not establishing a relationship with your customers on their personal devices. and the non-profit Churchill Club. To stay focused on your core 5B mobile phone users 5000 Global users (MM) 4. There are no more excuses for not having a mobile strategy today. Actively involved in the Silicon Valley startup community. In a matter of minutes you can build a pass to be delivered right to someone’s smartphone or tablet with an offer that will stay with them until they use it. You know your business better than anyone else. it’s imperative to partner with a company who gets mobile relationship management. It’s time to take matters into your own hands.000 1B smartphone users 1.000 2. serving as founder. Marketers can now build passes in a matter of minutes to reach your most profitable and loyal customers. Joe Beninato is responsible for the strategy and execution of Urban Airship’s passbook initiatives. it’s imperative to partner with a company who gets mobile relationship management. Make that information work for you in the most lucrative and growing space today mobile. As the General Manager. Beninato has served on the board of directors for Presto. You can see if that person has downloaded the pass. employee.

and how we have integrated mobile phones into our daily routine. What’s next? With the rise of digitization. 258 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 259 . can help companies across all verticals create new products and services. to healthcare and financial services have amassed terabytes of information about their legions of customers. There are significant— and competitive — advantages to leveraging Big Data. enterprises in industries ranging from telecoms and media. transformed commerce and impacted our society at all levels. Device penetration. and even spawn entirely new businesses.PART 8: CLOSING THOUGHTS: THE ROAD AHEAD PART 8: CLOSING THOUGHTS: THE ROAD AHEAD The growth of mobile over the past two decades has been unprecedented. already highly valued as a way to help meet the evolving needs of customers and spot important market trends. has reshaped entire industries. In this section. we explore this future and the emergence of new business models that will be based on little bits of information collected over vast networks to delight customers and increase operational efficiencies will rule the day. This digital treasure trove.

The hard truth is that computing should (and must!) become human literate. or the vision of machine-to-machine (M2M) communications that companies have worked towards for more than a decade. to pills and packaging. As we approach the timberline. and how we have integrated mobile phones into our daily routine.” Since the rise of mass-market computing— some 25 years ago—we have been climbing a mountain of technological change. taking us from a state where information was contained in PCs and devices to a space where. the number of microprocessors will climb into the trillions. in a new collective default state of ‘connectedness. Device penetration. No one disputes the evolving phenomenon itself. Instead. but alone they are not suited to lead the next phase of the Information Revolution. preparing to unleash and exploit trillions of opportunities will require us to build an entirely new information architecture. towering over the current landscape. that will impact every single one of us. the world of Trillions will encompass much more than the Internet of Things. What’s next? MAYA Design. To discuss the outcome — in all its majesty and complexity — is beyond the scope of this article. rigorous (yet fluid) and open (yet controlled). one very different from the Internet we know today. It’s steeper. just when we think the summit can’t be too much farther ahead. allowing it to flow and flourish.PART 8: CLOSING THOUGHTS: THE ROAD AHEAD Big(ger) Data Pushes The Boundaries By Mickey McManus. For a start. we will live in the information. should be charged with writing the codebase of humanity’s future. guides us through the wonders and challenges of “the next information revolution. It must be designed from the bottom up to liberate information.’ The number of computing devices now surpasses the number of humans on the planet — and the momentum shows no signs of stopping as companies build microprocessors into everything from cars and clothes. largely inevitable. Maya The growth of mobile over the past two decades has been unprecedented. we are arguably on the cusp of a fourth revolution: the Age of Trillions. Moreover. though some argue that it is merely a continuation of the PC revolution. And we must work to ensure that control over much of the data isn’t once again concentrated in the hands of a few powerful companies. a leading pervasive computing design firm. information isn’t ‘in’ anything. transformed commerce and impacted our society at all levels. Already industry manufactures more transistors than grains of rice and. This means saying good-bye to the notion that geek culture. in a few more years. It’s a fantastic and unprecedented journey that lies ahead. has reshaped entire industries. And the terrain? The uncharted territory at the intersection of pervasive computing and people. But there are some hugely important developments. our connectedness can breed catastrophe if we fail to be disciplined (yet adventurous). a much bigger mountain comes into view. Programmers may be the gods of the microworlds they create. Let’s call that one Trillions Mountain. Let’s call it PC Peak. which thrives on obscurity and sees technology as a pleasurable end in itself. More importantly. creating a world literally permeated with computation. We think that pervasive computing represents a profoundly different relationship of people 260 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 261 . Systems morph into ecosystems where simplicity is supreme and interoperability becomes a sacrament. thanks in part to the advance of mobile. the vast network that will take shape when embedded sensors gain the ability to communicate. That’s precisely backward. President and CEO. Context adds value Today. and the inspiration behind the new book Trillions: Thriving In The Emerging Information. In a trillion-node-network computing is turned inside out. We will also have to abandon the idea that people should become computer literate.

communicating with themselves and with us. In fact. But the real excitement starts when these microprocessors join the conversation. false or misleading storytelling will be the emperor who has no clothes. businesses. context-aware offers.The explosion of sensors points the way to a hyper-relevant future where companies can tap into Big Data to understand the in-the-moment context of the consumer to deliver real-time. and that eventually it will be understood as a distinct epoch of human history. After all. in the heyday of advertising big business was made by convincing consumers that a story about a particular brand was true. for example. Triggered by the person’s presence the package could light up to get their attention or even suggest the consumer buy another product to make the meal complete. This has allowed us to piece together formerly unrelated records about businesses that uncover indicators of fraud and deceit that would have otherwise been completely hidden. could ‘manage’ that purchase process all the way down to the real-time delivery of a relevant discount coupon to the customer’s mobile device and chalking up new loyalty points to the supermarket club card. As an intrinsically networked phenomenon. executives and even locations associated with each organization. context-aware offers. to information. Over time. hired everyone back and got back to business-as-usual. introduces new and radical transparency. he simply closed down the business. the company behind the brand (and its activities) was essentially hidden within a black box. after he didn’t pay his suppliers or staff. Transparency and transformation Banking and finance will also be transformed by pervasive computing. even brands. A decade in the era of pervasive computing will bring unimaginable changes. at MAYA we are working on this right now. In reality he changed his address to the address next door. are naked when seen through the Trillions lens. The accelerated feedback loop and radical transparency of Trillions will drive a blending of marketing and product development so that customers’ true stories and passions about a brand will take center stage. and the social network of products. developing prototype packaging that can ‘sense’ when consumers — people who likely appreciate the product or intend to purchase the product — are nearby. enabled by sensors everywhere that infer what we want and need. an outcome that has the potential to change the rules — dramatically. the explosion of sensors points the way to a hyper-relevant future where companies can tap into Big Data to understand the in-the-moment context of the consumer to deliver real-time. The impact on all industries will be profound. and as the credit rating fell. Framing the information in a Trillions mindset. We have worked with a commercial credit ratings agency to enrich its stockpile of business and credit data with unique identifiers for the companies. In the case of retail. One example that stands out is a businessman who made a habit out of opening companies that started with a good credit rating and then plummeted 262 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 263 . fired all the employees and disappeared. In this scenario tortilla chips could suggest a spicy dip as an accompaniment. Banks. it will also continue the historical trend of acceleration. While storytelling will continue to be a powerful means of inspiring and setting the context for a brand. For example.

The value of the information you collect. the needs you discover. To explore the emerging value at the intersection of design. His work has been published in Bloomberg Businessweek. enterprises in industries ranging from telecoms and media. It’s all about understanding the value of your information and planning for an economy built on t-commerce (trillions commerce). McManus co-authored Trillions: Thriving in the Emerging Information Ecology (Wiley 2012). Data exhaust Today. collate. New business models based on little bits of information collected over vast networks will rule the day. New revenue streams in the form of highvolume micro-transactions will become viable. services — everything — because technology and data have come together to make it all possible. But the biggest benefit may be to your customers. and principal of MAYA Design. a leading technology design and innovation lab. and if you don’t move fast enough you become food for something else. to healthcare and financial services have amassed terabytes of information about their legions of customers. After all. distribute and monetize what futurist. McManus spearheaded the launch of MAYA’s Pervasive Computing practice to help companies kick-start innovation around business challenges in a vastly connected world. and the behaviors that you can foster is inestimable. the Wall Street Journal. very big number. allowing a new breed of companies to get in on the action. Fast Company. and Harvard Business Review. anything multiplied by a trillion is an interesting number. This approach to Big Data can fuel big(ger) growth for your business. Trillions is a very. virtually throwing it away. communications. can help companies create new products and services.” Little wonder that Fortune magazine has dubbed Big Data ‘the next big thing’. Fortune. technology. This digital treasure trove. In the Age of Trillions every product becomes an accessory to every other product or service. optical sensors on those same garage door openers can capture information about the degradation of paint on car surfaces that may be invaluable to paint manufacturers. CEO. In the Trillions world there will be no waste. and even spawn entirely new businesses. applications. Add trillions of sensors to the mix and Big Data gets even bigger. Mickey McManus is president. the vibration sensor in my garage door opener can share what it learns in real-time with the tens of millions of other door openers across the country to detect earthquakes (not just moving garage doors). Big Deal On the face of it. author and consultant Alan Moore calls the “black gold of the 21st century. there is a lot of what I like to call ‘exhaust data’ that companies do not yet capture or monetize. you could argue that embedding trillions of sensors into devices (from watches to washing machines) and consumer touch points (from in-store displays to outdoor signage) lays the groundwork for Big Data and even bigger opportunities for companies that collect. Big Data. already highly valued as a way to help meet the evolving needs of customers and spot important market trends. New business models based on little bits of information collected over vast networks will rule the day. even demand.New revenue streams in the form of high-volume micro-transactions will become viable. In 2005. For example. which is why we strongly advise companies to explore ways to foster relationships (even with strange bedfellows) and make sure that their products are part of the information flow. people that will have come to expect. the patterns that emerge. The importance of this change cannot be overstated. Consider what could happen if you harvested and shared all the information your current products could capture or ‘know’ about their surroundings and use over time. With the rise of digitization. and business. Additionally. There are already significant— and competitive — advantages to leveraging Big Data. Nothing goes to waste. relevance in marketing. we’ll have a kind of information carbon cycle that will close the loop on data the way that the carbon cycle in nature recycles the building blocks of life. Instead.  264 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 265 .

business to business (B2B) and machine to machine (M2M) business opportunities.800 outlets across Indonesia. www.500 branches and 830 ATMs 266 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 267 . and world class services AbacusConsulting promises a deep scale. Celcom is part of the Axiata Group of Companies. holds a DBBL Dutch-Bangla Bank Limited (DBBL) started operation is Bangladesh's first joint venture bank. in line with evolving technologies and consumer behavior in Malaysia. and technology driven intent. www. www. Currently the largest mobile broadband and corporate services Celcom Axiata Celcom is Malaysia’s first and foremost mobile telecommunications provider with over 12. 330 Mikro Laju units. www. PT Bank Tabungan Pensiunan Nasional Tbk. with more than 180 million customers across 10 Asian markets. and 54 cash/payment First Tennessee Bank The 4. First Tennessee has the leading combined market deposit share in the counties where it does business and one of the highest customer retention rates of any bank in the country. It offers a comprehensive suite of banking products and Over the CIMB CIMB Niaga was established as Bank Niaga in 1955.cimbniaga. software companies. Accenture Mobility helps organizations embrace business to employee (B2E). DBBL's other focus is Corporate Social Responsibility (CSR). which consists of pensioners. www.gsma. Due to its investment in this Cisco Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. one of the world’s largest telecommunications companies.9 percent stake in CIMB Niaga.APPENDIX Company Descriptions AbacusConsulting Through a combination of latest business methodologies. AbacusConsulting also has a strategic focus on developing and delivering mobile commerce solutions to financial institutions and telecom sectors. technology services and outsourcing company.7 million The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo. as well as organizations in industry sectors such as financial services. DBBL has become one of the largest donors and the largest bank donor in Bangladesh. with approximately GSMA LATAM The GSMA represents the interests of mobile operators worldwide.celcom. media. HBL has grown its branch network and become the largest private sector bank with over 1. Spanning more than 220 countries.abacus-global. state of the art technological micro/small business owners and productive poor through more than Accenture Accenture is a global management consulting. CIMB Group. Celcom is now moving towards integrated multi-access and multimedia services. www. (NYSE:FHN) provide financial services through more than 170 First Tennessee Bank locations in and around Tennessee and 19 FTN Financial Group offices in the U. including handset makers.S.btpn. The bank has won numerous international awards because of its unique approach as a socially conscious bank.000 people serving clients in more than 120 countries. industry focused. equipment providers and Internet companies. and abroad. business to consumer (B2C). transport and utilities. From the onset. The target is to help the clients realize their dream of being the market leader. through an expanding delivery channel network of 974 offices across Indonesia that includes 590 branches.fhnc. Malaysia’s second largest financial services provider and one of ASEAN’s leading universal banking groups.dutchbanglabank. HBL HBL was the first commercial bank to be established in Pakistan in 1947. www. healthcare. the GSMA unites nearly 800 of the world’s mobile operators with more than 230 companies in the broader mobile ecosystem.500 employees of First Horizon National BTPN Founded in 1958. www. the focus of the bank has been financing high-growth manufacturing industries in Bangladesh. (‘BTPN’) is a leading mid-size and publicly listed commercial Bank in Indonesia focusing on serving the mass market segment.

" www. Staffed by senior analysts with decades of industry experience. www. connecting consumers.across the country and a customer base exceeding five million 268 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 269 . settlement and securities depository. and evangelize the use of the mobile channel. merchants. running a business and managing finances – MyClear Malaysian Electronic Clearing Corporation Sdn. is a technology design firm and innovation lab founded in Lopez Research Lopez Research LLC. Ooredoo (formerly QTel) Ooredoo (Qatar Telecom) provides a full range of telecommunications services in Qatar and across its presence in 17 countries.habibbank. more secure and more efficient for everyone. The name is based on an acronym coined by the industrial designer Raymond Loewy. Financial Process Exchange (FPX). and services.maya. as well as the suppliers who serve them. The MMA is an action oriented organization designed to clear obstacles to market MMA The Mobile Marketing Association (MMA) is the premier global non-profit trade association established to lead the growth of mobile marketing and its associated technologies. establish mobile media guidelines and best practices for sustainable growth. software vendors. its main objective is to provide an efficient and reliable infrastructure for e-payments. MasterCard MasterCard (NYSE: MA) is a technology company in the global payments industry. www. Nawras. www.myclear. HBL is also the largest domestic multinational. (MyClear) is a wholly-owned subsidiary of Bank Negara Malaysia. governments and businesses in more than 210 countries and territories. is a market research and strategy consulting firm that specializes in IT and communications technologies. and a consolidated customer base of IDC Financial Insights IDC Financial Insights assists financial service businesses and IT leaders.mastercard. i nsurance. Bhd. bank-driven business association working to accelerate the evolution and adoption of MFS. and stands for Most Advanced Yet Acceptable.idc-fi. as well as information-rich services and environments. to help companies design more usable and useful technology products. in making more effective technology decisions by providing accurate. www. enterprise IT leaders as well as telecom providers.lopezresearch. The company’s mission is to understand how mobile transforms business by integrating with other market trends such as social. with a significant presence in the MENA region and Southeast Asia. and securities and investments industries. include all members of the mobile media ecosystem.7 million as of June 2012. representing nearly fifty countries around the globe. It develops white papers which offer advice and guidance to banks and other stakeholders within the MFS ecosystem. financial subsidiaries in Hong Kong and the U. traveling. environments. Interbank GIRO. The company's tag line is "taming complexity. Direct Debit and MyMobile services. affiliates in Nepal. founded in 2008. Its companies include Indosat. Maya MAYA Design Mobey Forum Mobey Forum is a global. interbank funds transfer. For payment services. a leading international communications company. Incorporated in October 2008. With a presence in 25 countries.mobeyforum. Kenya and Kyrgyztan and representative offices in Iran and China. Ooredoo is part of the Qtel Group. It operates the world’s fastest payments processing network. cloud and big data technologies. Nedjma and Tunisiana. MasterCard’s products and solutions make everyday commerce activities – such as shopping. www. www. www. It has established a pervasive computing practice to help companies design smart connected products. Its clients include start-ups. networking vendors. The more than 700 member companies. and insightful fact-based research and consulting services. Nigeria. Lopez Research combines survey-based research and predictive analysis to gain insight into coming trends. timely.mmaglobal. MyClear provides the e-Debit. For retail services. MyClear provides real-time high value interbank funds transfers and operates the national check clearing system. our global research analyzes and advises on business and technology issues facing the banking. Pennsylvania.

market development and product Calif. and thought leadership and advice on navigating these challenges for specific companies and the industry at large. Walgreens. RBS Citizens As part of the Royal Bank of Scotland Group (RBS).com RSR Research Retail Systems Research (RSR) is the only research company run by retailers for the retail industry. subscribers and network operators. The firm provides regional reports. SAP helps companies of all sizes and industries run better. Its studies specialize in the products and services connecting mobile customers. sparking exceptional consumer experiences.3 million customers everyday on the island of Montreal. warehouse to storefront. industry trends and futures to facilitate decision-making and SAP As market leader in enterprise application Shift Thought Shift Thought specializes in knowledge relating to Digital Money. www. adapt continuously.urbanairship. In response. Yankee Group forecasts that the mobile revolution is a $3 trillion market opportunity and dramatic changes brought on by this revolution will play a larger role in the lives of consumers. www. workers and enterprise decision-makers. It provides subway services at 68 stations and with 228 bus lines. Warner Bros. a division of The 451 Group. RBS Citizens Financial Group is one of the world's leading commercial banking institutions. Yankee has made the mobile revolution its complete focus as a research and advisory services provider. and its affiliation with RBS allows it to extend its reach to more than 38 countries. and offers a wide range of customised research 270 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets 271 . desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. RSR provides insight into business and technology challenges facing the retail industry ecosystem.stm.yankeegroup. players and regulatory environments. competitors and strategic partnerships. Shopkick. and Waze. providing local expertise and in-market operations on a global basis. Portio Research Portio Research Ltd is an independent research company that provides highquality reports on the mobile and wireless industry. with international headquarters in Singapore. Urban Airship Urban Airship enables brands to build relationships with their customers through services that streamline delivering highly targeted. and has won best public transit company in North America in 2010. www. Shift Thought has developed the Digital Money SAGE technology to analyze and share knowledge across multiple perspectives including digital money market opportunities. www. Billions of push messages and tens of thousands of passes are delivered monthly.citizensbank. is the preeminent research and advisory firm equipping enterprises to grow revenues and profit in the mobile world. via mobile devices and in store. offering public transit to more than 1. www. RBS Citizens has non-branch offices in more than 30 states in the U. cross-platform mobile push messages and Apple Passbook passes. www. technologies. www. Groupon. country entry strategy and advice on business development. driving app engagement and increasing customer loyalty and lifetime value for leading brands such as CBS Interactive.paypal. www. PayPal provides a fast.S. monitoring market developments in this rapidly growing industry across 32 key services and 200+ country markets.000 customers to operate profitably. PayPal enables global commerce. PayPal is an eBay (NASDAQ:EBAY) company headquartered in San Yankee Yankee Group. and grow sustainably. giving a clear picture of the market. safe way to pay and get paid STM STM is La Société de transport de Montréal. SAP applications and services enable more than 197. From back office to boardroom.PayPal With more than 123 million active accounts in 190 markets and 25 currencies around the world.retailsystemsresearch.portioresearch. Amanda Roulstone Assistant to Peggy Anne Salz Mobile Commerce Guide Editorial Direction Diarmuid Mallon Carmel Coscia Project Managers Verena Wiszinski Ashley Lorenz Shahzia Banth Design Boing Design Paris BoingDesignParis@yahoo. Publisher and Chief Analyst Developed and produced Peggy Anne 272 .

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