Mobileoutlook2014mcd.rk .Revised

Mobile Commerce Dailywww.MobileCommerceDaily.comTHE NEWS LEADER IN MOBILE COMMERCE AND RETAIL

Mobile CommerceOutlook 2014

A CLASSIC GUIDEApril 2014

$595

TM

CONTENTSPAGE

3 INTRODUCTION Retailers embrace mobile commerce with fervor By Mickey Alam Khan

4 APPAREL AND ACCESSORIES Apparel and accessories hit pay dirt with mobile wallets By Kari Jensen and Rebecca Borison

6 AUTOMOTIVE Mobile commerce takes back seat to safety for automakers By Lauren Johnson

8 BANKS AND FINANCIAL SERVICES Banks face growing pressure to address mobile security, payments By Rebecca Borison

10 BOOKS, MUSIC and VIDEO Mcommerce success hinges on context for books, music and video brands By Lauren Johnson

12 BUSINESS TO BUSINESS B2B brands face increasing pressure to offer mcommerce By Lauren Johnson

14 CATALOG Catalogers need broader mobile approach that reaches beyond QR codes By Chantal Tode

16 CONSUMER ELECTRONICS Consumer electronics mcommerce to skyrocket with more sophisticated programs By Kari Jensen

18 DRUGS AND PHARMACIES Personlization is significant mcommerce opportunity for drugstores By Chantal Tode

20 ENTERTAINMENT Entertainment firms must rethink mcommerce strategies for continued growth By Chantal Tode

22 FOOD AND BEVERAGE Food and beverage merchants must differentiate mobile experiences to succeed By Rebecca Borison

24 GAS STATIONS Gas stations will rev up mobile payments to boost loyalty programs By Chantal Tode

25 HARDWARE AND HOME IMPROVEMENT Hardware retailers edge toward mobile as traditional medias role shrinks By Kari Jensen

PAGE

27 HEALTH AND BEAUTY Attribution will help beauty retailers drive omnichannel experiences By Rebecca Borison

29 HOME FURNISHINGS AND HOUSEWARES Home furnishing retailers prioritize content in driving commerce By Lauren Johnson

30 MARKETERS Marketers must mix mcommerce and apps for success By Kari Jensen

32 MASS MERCHANTS, DEPARTMENT STORES AND MALLS Mass merchants tap payments, social to boost mobile strategies By Chantal Tode

34 MEDIA Publishers push mcommerce in native ads to monetize content By Lauren Johnson

36 MOBILE RETAILERS Winning mobile retailers get convenience right to bolster loyalty By Lauren Johnson

37 NONPROFITS Nonprofits look beyond text-to-give to charge mobile fundraising strategies By Chantal Tode

39 OFFICE SUPPLIES Office supplies push mobile envelope with in-store integration By Kari Jensen

41 ONLINE RETAILERS Leading online retailers leverage native-supported mobile platforms By Lauren Johnson

43 SPECIALTY RETAIL/NON-APPAREL Specialty retailers boost mobile strategies with customer intelligence By Rebecca Borison

44 SPORTING GOODS Sporting goods retailers are prime use case for mobile social By Chantal Tode

45 TOYS AND HOBBIES Toys and hobbies retailers play up year-round mcommerce Kari Jensen

47 TRAVEL AND HOSPITALITY Travel and hospitality go local and global with mobile commerce Kari Jensen

PAGE 2 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2014

Mobile Commerce Daily covers news and analysis of mobile commerce and retail. The Napean franchise comprises Mobile Marketer, MobileMarketer.com, the Mobile Market-er Daily newsletter, MobileMarketingDaily.com, MobileCommerceDaily.com, McommerceDaily.com, the Mobile Commerce Daily site and newsletter, MobileNewsLeader.com, Classic Guides, webinars, Mobile FirstLook, the Mobile Marketing Summit, Mobile Women to Watch Summit and the Mcommerce Summit and awards. 2014 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission.

Email: [email protected] site: www.MobileCommerceDaily.com

http://www.mobilecommercedaily.com/newsletter

http://www.mobilecommercedaily.com/advertise

[email protected]

Mickey Alam KhanEditor in [email protected]

Chantal TodeAssociate Editorchantal@ mobilemarketer.com

Lauren JohnsonAssociate Reporterlauren@ mobilemarketer.com

Jodie SolomonDirector, Ad [email protected]

Rebecca BorisonEditorial Assistant

May YeungContent Assistantmay@ mobilemarketer.com

Kari JensenStaff Writer

INTRODUCTION

Retailers embrace mobile commerce with fervor

T he outlook for mobile commerce has never looked brighter as retailers and merchants of all hues em-brace mobile as a key medium that not only drives sales on devices but also to bricks-and-mortar stores where the bulk of retail still occurs.

As this Mobile Commerce Outlook 2014 classic guide will show, mobile commerce is a runaway hit for retailers in an overstored, highly competitive environment where price often trumps brand.

Mobile commerce conducted on the device is the ultimate convenience for time-strapped consumers, while shifting even more control over the purchase-decision process from retailers.

Street savvyForrester Research projected that mobile commerce last year accounted for $20 billion in sales, expecting double-digit growth for the next few years.

The majority of that revenue was generated not surpris-ingly by eBay, Apple, Starbucks and Amazon, as well as retailers such as Macys, Walmart and Target. But the interesting development to watch for in the years ahead is how Main Street retailers have understood that their shopper has changed, and accordingly adapted.

Previous years discussions focused on mobile Web sites and applications. Those two mobile channels now are a given. The emphasis this year and the next is on integrat-ing store operations with online and mobile, thus giving rise to the popular term du jour, omnichannel.

What retailers are vying for with mobile help, of course is a seamless shopping experience across channels. Smart retailers will not worry about ownership of chan-nels, but ownership of the customer experience.

Among other trends to expect are better geo-location of-ferings that recognize customers and prospects in-store, more sophisticated sites and apps that cut down the shopping time, in-store pick-up of mobile orders, more sophisticated search that drives local traffic, targeted mo-PAGE 3 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2014

bile advertising and marketing that drives leads to stores, sites and apps, and the whole notion of mobile payments which seems to focus on plucking out credit cards from the equation. Good luck with the last one.

Eye dataOf course, as with any emerging medium, mobile still has challenges. Chief among them is an issue bedeviling store-based retail and ecommerce: theft of consumer data.

This hazard has yet to visit the mobile operations of most retailers. But a leaky sieve may not be helpful to mcom-merces rapid ascent as a lead and revenue generator for retailers, accumulating mounds of valuable and confiden-tial data along the way.

Please read this Mobile Commerce Outlook from page to page. Feel free to send the articles and document link to colleagues and clients. The insights and analysis in this edition are meant to help readers make smarter decisions about mobile commerce.

For their hard work and dedication, many thanks to team members Chantal Tode, Lauren Johnson, Kari Jen-sen, Rebecca Borison, Jodie Solomon and our awesome art director. The articles in this Classic Guide tell an ob-vious truth: mobile commerce is the present and future of retail.

Mickey Alam [email protected]

Apparel and accessories hit pay dirt with mobile walletsBy Kari Jensen and Rebecca Borison

Apparel and accessories retailers that invest in building loyalty, creating new relationships and clinching those interactions with mobile wallets


APPAREL AND ACCESSORIES

Successful retailers will be those that customize con-sumers experiences and respond to their increasing sophistication. Apparel and accessories retailers will no longer get by with offering only applications and mo-bile Web sites, they will have to enable a wider array of mcommerce features.

At Express, we will continue to evolve our mobile ef-forts as we learn and adjust to the changing landscape, said Liz Crystal, chief marketing officer at Express, Columbus, OH.

Our customers continue to shift many of their behav-iors to be mobile-centric, she said. I think as consumer behavior changes, we will also need to evaluate how we measure and attribute mobile activity to commerce whether that sale happens online or in-store.

Growing mobile salesSpecialty apparel retailers will be forced to embrace the new reality where smartphone users are leverag-ing mobile throughout the path to purchase by offer-ing enhanced mobile experiences that go beyond just the basics.

Initially, marketers thought as mobile as an on the go tool but research shows shoppers grab their phone at home and at-work out of sheer convenience, even in the presence of a PC, said Molly Garris, director of digital strategy and mobile practice lead at Leo Burnett/Arc Worldwide, Chicago. Less was more for the on the go use case, but if people are willing to mobile shop from their couch, marketers need to server up longer form content to add relevancy.

Videos, inspiration guides, articles and other curated content should be available for the shopper who is used to using mobile interchangeably with their PC, she said.

will reap rewards in 2014.

In 2013, many retailers grew mcommerce revenue by more than 100 percent and even up to 1,000 percent, but from a low starting point, according to Sam Ganga, executive vice president, commercial division at DMI Mobile Enterprise Solutions, Bethesda, MD.

In 2014, we expect retailers to take a more contextual approach focusing on delivering tailored experiences de-pending on where you are - in the parking lot, in store, online, at home, he said.

Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2014

The focus will be on the top use cases in each situation, and well see a drive to customizing the user experience based on user needs in each situation. One central theme in this will be that loyalty will become more integrated in the mobile commerce experience.

Bricks-and-mortar retailers will benefit by equipping staff with mobile devices to better offer information and expedite sales and checkouts.

Save the sale promotions will identify consumers who have not made purchases and try to get them to do so

before they leave the store, according to Mr. Ganga.

High-repeat businesses will launch self-checkout apps and mobile wallets to make it easy for consumers to scan items in the store and show their receipts on the way out.

Development and testing will be more challenging in 2014 due to fragmentation in device sizes, operating systems and browser versions.

Reaping mobile benefitsRetailers that are more advanced in mcommerce, will benefit from taking a use case-centric approach to de-signing new services. They must involve user testing in all design and development as often as they can.

This may take a big investment in making sure data is right, rules are relevant, and there are no performance issues, Mr. Ganga said. But this brings tremendous power imagine your brand in the palm of your cus-tomers hand all the time targeting offers based on interests, where they are and how close they are.

This offers a huge upside for revenue and for loyalty.

Mobile commerce takes back seat to safety for automakersBy Lauren Johnson

With more automakers betting on the connected car as the next big way for consumers to man-age their day-to-day lives, promoting safety


AUTOMOTIVE

As more consumers choose to research big-ticket car sales on mobile devices this year, there will also be a big-ger premium placed on tailored mobile campaigns that prove an ROI and ultimately drive sales for automakers. At the same time, automakers will continue to innovate

will play a more significant role than mobile commerce in 2014.

in mobile content.

As mobile commerce continues to skyrocket via smart-phone and tablet device adoption, it will be important to stay flexible and quickly monitor user trends and needs, said Erich Marx, director of social and interactive mar-keting at Nissan, Franklin, TN.

While still important, the desktop experience will soon be the minority amongst devices, he said. As a result, we must develop more innovative thinking to deliver thoughtful, meaningful, immersive content while servic-ing all aspects of consumer research and buying within a mobile environment.

Driving mobile salesWhile mobiles role continues to grow for car research, the majority of consumers will not be buying a car through their smartphones and tablets in 2014. There-fore, the medium will primarily link all parts of the car-buying process together in the upcoming year, particu-larly with mobile advertising.

In 2013, automakers were quick to jump on new adver-tising opportunities such as iTunes Radio to hit targeted groups of consumers to ultimately drive a sales lead or traffic to a dealership.

Going forward, campaigns that target a specific group of consumers are what automakers will strive towards.

Additionally, marketers need to focus on delivering superb mobile sites once a consumer clicks through an ad.

Sites that offer 360-degree views, high-resolution photos and dealer locators will become the norm for automakers.

Increasingly, ensuring on-the-road safety for mobile us-ers will be a focus as well.

The opportunity for the automaker in mobile commerce


in 2014 will largely depend on how integrated their in-frastructure is to insure theres a seamless connection with their point-of-sale, their mobile apps and Web sites and their financial institutions, said Kayla Green, digital strategy director at Saatchi & Saatchi LA, Los Angeles.

Conversely, a challenge for automakers in mobile com-merce in 2014 will be to insure that any mobile-com-merce related activity is integrated into the customer experience in a way that promotes safety while on the road, she said.

Multiscreen usersIn 2013, automakers got a better grasp on how con-sumers are using multiple devices to aid in a big- ticket purchase.

With these initial learnings, automakers will better tai-lor campaigns towards specific groups of consumers this year.

For example, a tablet campaigns should be loaded full of information and research.

On the other hand, smartphone campaigns will include calls-to-action that drive an immediate action.

For example, smartphone campaigns that drive traffic to dealerships, such as click-to-call, maps or a button to request a quote.

At the same time, the focus on multi-screen campaigns poses several big challenges for automakers around at-tribution.

Since consumers are using a variety of devices, attribut-ing a sale to mobile will be an obstacle for marketers this year.

Car buyers are also price fickle and are competitively price comparing on third-party and brand sites. This means that automakers need to be transparent and offer consistent pricing information across each device.

With a significant percentage of mobile auto consumers

time spent on mobile Web sites, it is critical for auto-makers to work with SEM and ad provider partners to examine mobile Web campaigns from both a calls and clicks perspective.

In 2014, this understanding will likely propel automak-ers to better gear their marketing campaigns with mul-tiscreen users in mind, whether by building content spe-cifically for the online experience or using search engine marketing data to cater better to smartphone or tablet usage patterns, said Bill Dinan, president of Telmetrics, Mississauga, Onatrio, Canada.

As mobile wallets and mobile point-of-sale systems take off, consumers are giving out their personal billing in-formation to a variety of wallet and payment providers.

In 2014, financial services will need to move towards standardized security policies or risk slowing adoption by consumers who are concerned following a number of recent high-profile breaches.

There has been a proliferation of card numbers being stored in lots of places, and weve been a proponent to create a new standard for payment security that in sim-ple terms is substituting those payment credentials for a token that is volatile so the token can be used only once and if it were compromised it wouldnt matter because I couldnt use it again for some other purpose, said Domi-nic Venturo, chief innovation officer for payment services at U.S. Bank, Minneapolis.

Weve been pushing for the industry to come up with a better answer to protect our customers and the pay-ment data because the current way that things have been done, well you read about it all the time, there are all these data compromises, and that leads to the very expensive process of reissuing, he said.

I dont know if 2014 will be when the adopting and change happens, but its something that the industry needs to be working through.

ConsolidationWith new mobile wallet and POS services surfacing every day, 2014 will likely see some consolidation in the space, with a few main players leading the way.

As the landscape for mobile-supported financial services

Banks face growing pressure to address mobile security, paymentsBy Rebecca Borison

As mobile payment options continue to prolifer-ate, banks and financial services firms will face significant pressure in 2014 to collaborate on a


universal security solution and to make a bigger push into mobile payments.

BANKS AND FINANCIAL SERVICES

continues to evolve, banks are better positioned to move mobile payments forward but must move to take advan-tage of their strong relationships with consumers or risk being disintermediated, according to Pradeep Moudgal, an analyst at Mercator Advisory Group, Maynard, MA.

Banks have this great infrastructure, and they dont take advantage of it, Mr. Moudgal said. Consumers trust their banks. Their mobile apps have much more built-in security measures.

They have millions of customers who are using their on-


line services, and its in the mobile channel that they can do a lot more because why would they want to give up their advantage to all the disrupters when they already have the client base, he said.

Mr. Moudgal expects the shift to take a while and imag-ines a new ecosystem will evolve in the next three years or so.

Especially with their legacy platforms, banks tend to take longer to make changes.

Core channelAlthough there is a lot of innovation in the financial sector, there are still stragglers who will need to catch up

in 2014.

As consumer expectations rise, banks and financial insti-tutions will have to adapt to meet these changing needs. Banks without mobile check deposit or mobile account managing will not make it.

The last of the laggards are finalizing their core mobile banking products, so basic capabilities, including check deposit are becoming table stakes across the industry, said Brian Stein, managing director at Pervasive Path, Cleveland, OH.

The more dynamic institutions spent 2013 re-archi-tecting those core capabilities onto platforms which can support distinct customizations and innovations and are now poised to control their destiny in 2014, he said.

Mobile can no longer be an afterthought for banks and financial institutions; it must be a core part of their overall strategy.

Mobile should lead the way for more robust middleware that allows for inter-connected systems and a more co-hesive cross-channel experience, Mr. Stein said.

Banks will need to look beyond existing retail banking transactions to servicing the whole customer and their entire set of needs, across the banking relationship, he said.

Better data speeds and applications are propelling con-sumers to watch and listen to full-length music and vid-eos on their smartphones and tablets.

In 2014, Pandora, Hulu and iTunes Radio will increasingly be in a tight spot to monetize content while also keep-ing up a top-notch experience for consumers with con-textually-based ads that drive return-on-investments

Mcommerce success hinges on context for books, music and video brandsBy Lauren Johnson

Athough mobile commerce is on track to grow sub-stantially this year, video and music brands will need to pack as much data as possible into ad-


vertising to create contextual messages that win over consumers wary of making a purchase straight from their mobile devices.

BOOKS, MUSIC and VIDEO

for advertisers.

In 2014, well see music streaming companies like Pan-dora, iTunes Radio, and Spotify deliver more personalized content and better ad targeting capabilities based on all of the customer data they collected, said Dirk Rients, senior vice president and director of mobile at DDB Chi-cago, Chicago.

Due to the continued growth of mobile video, brands will start to tightly integrate commerce opportunities, such as purchasing a product straight from a video, he said.

One challenge that remains is that a majority of con-


sumers are still somewhat hesitant about making a purchase from their mobile device. Putting all the avail-able data into context is a significant opportunity for both music and video brands and will ultimately attract more advertisers.

Fueling mcommerceMusic and video advertising is fueling mobile commerce with ads that are targeted towards specific groups of consumers.

In 2013, Apple made a big splash with the launch of iTunes Radio, an ad-supported free music streaming ser-vice that is built into its iOS 7 operating system.

The service takes a direct hit at Pandora with an al-most identical user experience and is an attempt for the manufacturer to rejuvenate its iAd mobile advertising business. Spotify also significantly pivoted its business from a subscription-based mobile platform to an ad supported one.

The growth in ad-supported platforms suggests that premium subscriptions are not working on mobile, and these companies cannot bank on consumers paying for media to drive their businesses.

Instead, music and video platforms will need to create relevant and hyper-targeted advertising opportunities for marketers to run commerce-enabled campaigns to keep the money flowing.

Additionally, the need for targeted ads is crucial for mu-sic and video brands since consumers are more bom-barded than ever by the amount of content that they are accessing across all devices.

Consumers are experiencing content overload, having more options than ever in terms of what they are listen-ing to, reading, watching, etc., so it will be key to take approaches that stand out from the clutter, said Heidi Browning, senior vice president of strategic solutions at Pandora, Oakland, CA.

The best way to do this is to serve consumers engaging

and relevant ads and experiences, she said.

Second screen experiencesAs more brands look to incorporate mobile into mul-tichannel campaigns, video advertising will become an important way for marketers to drive sales from television ads.

Marketers have been working to crack the second-screen nut for years, but the opportunity around mobile com-merce is still new.

For example, linking up a TV spot to a targeted com-merce-enabled mobile ad is an opportunity that few marketers fully leveraged in 2013. To pull this off though, marketers will need to work to make the shopping expe-rience as seamless as possible.

We already know that mobile video harnesses the sight, sound and motion of video to deliver a TV-like experi-ence in apps in incredibly compelling ways, said Will Kassoy, CEO of AdColony, Los Angeles.

In 2014, marketers will increasingly deliver their videos on mobile combined with engaging, interactive rich me-dia calls-to-action to drive even more ROI, he said.

Over the past few years, B2B brands have steadily rolled out online commerce.

However, these mobile and Web efforts can no longer be treated as extensions for sales, much in the same way that digital has transformed B2C companies.

It used to be the case in 2008, 2009 and 2010 that companies could focus on platforming or re-platform-ing just to sell online and worry about mobile later, said Andy Hoar, senior analyst at Forrester Research, Cambridge, MA.

What has really changed in the last year or so and will be significant going forward is that companies can no longer develop mobile in series it has to be done in parallel, he said.

Giving mobile priorityAs more companies look to streamline sales, many B2B companies are steadily taking their services digital with online and mobile commerce sites and applications.

These companies typically choose a platform to roll out commerce.

This can be an expensive process, but ultimately helps the brands establish an online presence.

At the same time, many of these B2B brands are re-plat-forming their digital commerce platforms.

These companies are taking home-grown online systems and revamping their sites.

Since B2B brands must create online and mobile services in tandem in 2014, sites and apps will be tailored to spe-

B2B brands face increasing pressure to offer mcommerce By Lauren Johnson

With mobile commerce now the norm for the majority of business-to-consumer brands, business-to-business marketers must develop


Web and mobile initiatives in conjunction in 2014.

BUSINESS TO BUSINESS

cific devices with unique content.

Mobile development for these brands is typically done by a third-party or vendor.

According to findings from Forrester Research at the end of 2013, 10-15 percent of online traffic for B2B com-panies was mobile while five to 10 percent of B2B sales happened via mobile.

Part of the reason why mobile makes up such as small


portion of B2B sales is because of the wide price ranges of a sale. The average order value can be anywhere from $45 to $45,000.

However, the amount of sales made via mobile is only on the upswing, and B2B brands should brace now for the change in clients checking out from their smartphones and tablets.

Other research from Forrester found that only 50 per-cent of B2B brands have a mobile strategy, meaning that brands will have to map out their mobile initiatives for the long-term in 2014 to justify investments.

For example, B2B companies can rev up some of the slip-ping sales that are going online with location-based fea-tures that drive in-store traffic.

Additionally, B2B brands will empower employees with smartphones and tablets to increase sales and engage-ment with clients.

In some ways, the mobile use case has renewed the val-ue of the stores, which is really where this is all heading, Mr. Hoar said

Its not just online which I include mobile with or offline which is just stores, its and, he said.

Business challengesDespite the need for synced up desktop and mobile ex-periences, B2B marketers will be challenged to develop effective digital teams in 2014.

For example, a B2B brand may have an in-house ecom-merce team, but mcommerce is outsourced.

Additionally, some B2B companies might be still in the process of developing a Web site and may not be ready to fully embrace mobile for a new set of initiatives.

Consumers are now trained to expect seamless mobile experiences across B2C brands and retailers, mean-ing that clients will expect the same from B2B brands going forward.

Therefore, B2B brands should leverage their own cus-tomers for better insight on the types of features that mobile sites or apps should include.

Think from the outside in, said Rick Chavie, vice presi-dent of omnicommerce at hybris, Montreal, Canada.

Get strategic customers involved in your mobile initia-tive so you focus on what they will find most helpful, whether self-service for simpler transactions or what improved capabilities they believe your sales associates should have, he said.

Catalogers need broader mobile approach that reaches beyond QR codesBy Chantal Tode

Catalog retailers are likely to be casting about in search of a meaningful way to interact with smartphone users now that enthusiasm is waning


CATALOG

The quest for a successful mobile strategy will take on added urgency in 2014 following another holiday sea-son of robust gains in mobile traffic and sales for many retailers. While catalogers, for the most part, have been slow to adapt to mobile in part because of their limited resources, this could be the year many commit to mobile in a bigger way thanks to the growing number of options available.

For many catalog-centric brands, weve found that theyve been slow to adapt to mobile activities, said Lois Brayfield, CEO at J. Schmid and Associates, Mission, KS. Its critical that as consumers become more engaged in mobile activities, brands present a mobile-enabled site.

The challenge, especially for the smaller guys, is one of expense and resources, she said. It will certainly help as more platforms offer a one-stop-solution.

Beyond QR codesMany catalogers who placed QR codes in their print cat-alogs with the idea of enabling smartphone users to scan the bar codes and find out more about a product or order it online have abandoned this strategy, per Ms. Brayfield. This is because too few consumers were willing to take the necessary steps for so little pay off.

Some catalogers are now experimenting with augment-ed reality and watermarks as a replacement for QR codes but, in 2014, look for catalogers to also take a closer look at enhancing the online shopping experience for mobile users. This will include optimizing email promo-tions for mobile, organizing products in high level, easy to find categories on Web sites so users can easily tap through selections, adding PayPal as a payment option on mobile and creating a shared cart that can be saved across devices.

for QR codes as way to mobilize print catalogs

As shoppers increasingly browse and buy on mobile devices, it will be critical that catalogers create a mo-bile experience that allows customers to find what they want quickly and easily, and also gives them multiple options for buying, said Paige Mazzoni, vice president of marketing at MarketLive, Petaluma,CA. Responsive design is an important technology to implement to en-sure that displays are automatically adjusted to the spe-cific device being used and that pictures and content are completely visible.


Customers have come to expect a seamless experience between their devices, and responsive design helps en-sure that experience, she said. Social channels should also be integrated, to take advantage of buzz generated by groups of customers.

Many opportunitiesCatalogers will also need to use analytics to gain a bet-ter understanding of how mobile shoppers are engag-ing with them. This means determining which areas of a Web site are most visited from a mobile device and then highlighting these on a mobile commerce site.

Key to the success of these efforts is the need for cata-logers to not look at mobile as a one-time tactic but as a bigger opportunity that should be integrated as part of a broader multi-channel campaign. This means providing relevant content or engagement for each platform that consumers are shopping on.

First and foremost, brands must become mobile/tablet enabled, J. Schmids Ms. Brayfield said. This is an im-portant investment in the future.

Catalog mailers should begin testing mobile as part of their communication strategy, she said. For instance, sending specific offers while alerting customers that their catalog will arrive in the next day. Or, offering a discount a week after theyve received the catalog.

Consumer electronics mcommerce to skyrocket with more sophisticated programsBy Kari Jensen

C onsumer electronics retailers and brands must position themselves in 2014 to gain consumers allegiance and trust by meeting or beating com-


CONSUMER ELECTRONICS

Price and availability motivate these consumers. So mobile-savvy retailers will respond by bolster-ing - or creating - loyalty programs and enhancing in-store experiences.

Showrooming behavior is more prevalent in consumer electronics than anywhere else, said Jay Fiore, vice pres-ident of marketing at DMI Mobile Enterprise Solutions, Bethesda, MD. One recent study by Ipsos Media showed that 42 percent of consumer electronics shoppers who used their mobile devices in-store ultimately made their purchases online.

Leading consumer electronics retailers have come to re-alize they cant hold back this tide, he said. Theyve got to align with shopping behaviors and become part of the mobile experience - make personalized offers to mobile users in-store.

Let them know theyll beat any offer, Mr. Fiore said. [Incentivize] the consumer to buy from them - either in the store or online.

Bolstering mcommerceIn 2014, consumer electronics retailers and brands will benefit by becoming consumers confidant, creating mo-bile channels for consumers to interact with them, make requests and reap rewards.

Throughout the year, more consumer electronics retail-ers will drive increasingly attractive, interactive, sophis-ticated mobile experiences with consumers. If they fail to do so, they will be left behind.

Mr. Fiore forecasts huge, huge growth for consumer electronics mcommerce in 2014.

Consumer electronics is the product category most fre-quently bought via mobile device, he said. And mobile

petitors prices and offering incentives via mobile.

commerce is projected to continue to grow at an incred-ible pace.

BitWizards, for instance, says global mcommerce rev-enues should reach $119 billion in 2015 - thats nearly 100 times the level in 2009, which was $1.2 billion.

Advancing mobileThe main challenge that the consumer electronics sector


faces in 2014 is that few brands and retailers are taking advantage of advance mobile technologies.

Thats the biggest challenge and also the biggest oppor-tunity, because once they do adopt these, business will boom, said Walt Geer, vice president product strategy at PointRoll, New York. The second challenge is earning consumers trust.

Everyone wants to drive interaction rates, but its harder

to get consumers to trust your brand, he said. Today, few people trust the experience of buying a CE (con-sumer electronics) product through a mobile banner.

Gaining trust in users is the biggest challenge.

One way to gain that trust is to pay close attention to ad design, and to the sites where the ad runs.

It is time in 2014 for consumer electronics to push the envelope - and do usability testing.

That is, make sure you understand how your users en-gage with your brand, and why, Mr. Geer said. What colors do your buyers like to see in CE ads?

What ad designs lead to CE purchases? he said. Test those out every time, so when you make a big ad spend, youll know its for something good.

CE brands, like all brands, want to differentiate them-selves, he said. So I recommend they be bold, but test before making the big buy.

Personalization is significant mcommerce opportunity for drugstoresBy Chantal Tode

While the big national drugstores chains are al-ready leaders in leveraging mobile to enhance the shopping experience, they cannot rest on


DRUGSTORES AND PHARMACIES

their laurels in the quickly evolving mobile space and must embrace greater personalization in 2014 so as not to lose customers to the competition.

With their positioning as convenience retailers for ev-eryday items, drugstores are well suited to take ad-vantage of the growing role that mobile plays in consumers lives.

From photos and prescriptions to coupons and in-store navigation, retailers in this competitive sector will con-tinue to advance their mobile strategies with new appli-cation and Web site features intended to make it easier

to shop their stores over the competition.

The importance of mobile commerce to drugstores and related retailers will continue to grow in 2014, said Tim McCauley, senior director of mobile solutions at Wal-greens, Deerfield, IL.

Consumers are seeking top-notch experiences as they increasingly make shopping decisions on mobile and tablet devices, he said. Retailers need to be prepared to meet customers needs in a relevant and meaningful way, so that shoppers dont select a competitor.

The area of mobile commerce will likely experience more opportunities for personalization, which help to create greater loyalty and affinity for the brand.


In-store advancesMobile coupons are one important area for drugstores that is ripe for further innovation in 2014.

While mobile makes it easy for shoppers save and re-deem coupons, retailers are still challenged by matching a mobile coupon to an in-store purchase and solving this equation will be a big focus this year.

The use of mobile inside drugstores will grow in 2014 via a focus on new app features such as in-store navigation as well as with Bluetooth Low Energy beacons that en-able retailers to deliver offers at the hyper-local level.

While in-store mobile will offer drugstores significant opportunities to drive sales and create more relevant experiences for shoppers, retailers will need to be sure they properly address privacy concerns or risk making customers uncomfortable.

Mobile paymentsThis is likely to be the year that drugstores move more aggressively into mobile payments.

While the mobile payments space is still evolving, leading drugstores are watching the success that coffee houses, gas stations and other everyday retailers are having in payments.

Drugstores recognize the potential to enhance customer loyalty via payments and are moving beyond a wait-and-see approach to actively looking for ways to take action. For example, CVS is one of the partners in MCX, a mobile payments solution being developed by a consortium of retailers and whose launch is imminent.

Drugstores will also continue to innovate mobile solu-tions designed to make it easy for customers to order photo prints or refill a prescription.

Such services are a prime example of why mobile is such an important category for drugstores, with Walgreens reporting that it sees more than 40 percent of print or-ders coming from mobile and more than half of online prescription orders.

Mobile has been adopted faster than any other tech-nology in history and it provides a compelling way to bring pharmacies closer to their patients, said Mark Cullen, CEO of Mscripts, San Francisco. Whether it be to refill medications, improve medication ad-herence, link incentive programs and more mo-bile can serve as the bridge for services within the pharmacy to the patient population and enhance brand loyalty.

Pharmacies are well positioned to capitalize on mobile momentum in 2014 by implementing mobile technolo-gies, he said. Helping patients remember when to refill and pick up will make the most difference in terms of customer satisfaction and loyalty.

Mobile and email campaigns can include coupon offers to further incent them to purchase items with the phar-macy and remain loyal.


ENTERTAINMENT

Entertainment firms must rethink mcommerce strategies for continued growthBy Chantal Tode

While entertainment companies jumped quickly into mobile, there is still significant upside po-tential when it comes to driving ticket sales In 2014, entertainment firms will need to improve their mobile content strategies now that apps are nearly ubiq-uitous and social media sites beyond Facebook continue to gain in popularity. With mobile traffic to entertain-ment sites likely to continue to grow in the coming 12 months, marketers need to insure their commerce and engagement strategies are seamless.

We see as much as 30 percent of traffic to entertain-ment sites coming from mobile already, so the opportu-nity is already significant but is only going to grow as mobiles share of entertainment traffic becomes larger, said Dan McDevitt, joint managing director of Woot Me-dia, Manchester, Britain.

For entertainment producers the key challenge is how to encourage purchasing from a mobile device, he said.

Although mobile commerce is on the up, particularly for micro-payments, its still behind where it should be based on how much time consumers spend on mobile and the share of advertising spend mobile accounts for.

Click to buyWith Woot predicting a further 60 percent growth in mobile and 25 percent growth in tablet traffic to en-tertainment properties in 2014, it will be more impera-tive than ever that consumer experiences are conducive to purchasing.

While entertainment companies are leaders when it comes to enabling users who see an ad for a film to click through and buy a ticket, the volume of click-to-buy ads for films is still relatively small considering the signifi-cant potential here. This is likely to change in 2014 as mobile use becomes more sophisticated.

Mobile offers a unique advantage for entertainment ad-vertisers, said Mollie Spilman, executive vice president at Millennial Media, Baltimore, MD. Through mobile commerce tactics, like click-to-buy tickets, advertisers entice and empower consumers through utility-driven functionality.

In Q2 2013, 25 percent of entertainment advertis-ers on the Millennial Media platform leveraged mobile commerce as part of their campaign, as compared to 11

and engaging consumers, given the continued growth in the consumption of entertainment-related content on mobile.


percent of advertisers on the platform as a whole, she said. This percentage will increase in 2014 as consumers continue to become more comfortable using their mobile devices for transactions.

Beyond FacebookEntertainment companies need to have robust mo-bile content strategies to support their advertising and ticket-buying efforts. To date, many have come out with apps and built a presence on Facebook for their films.

However, they will need to review these strategies in

2014 and possibly change gears to insure continued mo-bile success.

Additionally, as mobile users increasingly engage with a variety of social media platforms beyond Facebook, including Twitter, Vine, Pinterest and others, entertain-ment companies will need to insure their mobile social strategies are getting in front of the desired audience. Its fine to build an app, after all everyone is doing it, but with everyone building an app these days its going to be more important to have agility on existing plat-forms as well, said Leslie Poston, senior social media strategist at Flightpath, New York.

Engagement and analytics on platforms like Vine and other mobile apps that exist to share and entertain will do a lot more for those in entertainment in the long run than just having an app, she said.

Its not enough to rely on Facebook anymore, either. With constant changes to the algorithm and limitations on what people can see and do with Facebook on their mobile devices as Facebook remains shockingly behind in its mobile design, Facebook should only be one portion of your entertainment platform.

Food and beverage merchants must differentiate mobile experiences to succeedBy Rebecca Borison

With a surplus of mobile applications available to consumers, food and beverage merchants will look to add value and create better mobile


FOOD AND BEVERAGE

experiences for customers in 2014 by leveraging mobile payments, social promotion and loyalty strategies.

For example, Dunkin Donuts already offers a mobile-payments enabled app, and the company recently added localized offers and Passbook integration as well. Look-ing ahead, Dunkin Donuts will continue to think of ways to enhance the experience on the app, according to

an executive.

It will be more important than ever to differentiate yourself and add value, said Scott Hudler, vice presi-dent of global consumer engagement for Dunkin Brands, Canton, MA. At Dunkin Donuts, we encourage a cul-ture of learning and experimentation with new tech-nologies, but at the end of the day, we go back to the consumer experience.

Consumers are faced with more messages and apps than ever, so we always go back to what value were adding and think this approach has made a big difference with our guests, he said.

Moving into next year, we see specific opportunity for brands to grow within their mobile payment applications, social promotions through these mobile applications and handheld devices, and the increase and/or development of loyalty programs.

Streamlined dining experiencesRestaurants, cafes, bars, grocery stores and bakeries have all been experimenting with mobile POS systems and bill-paying, and these systems will continue to grow in adoption and become more streamlined in 2014.

The current list of mPOS systems and checkout applica-tions is endless, and the list will most likely face con-solidation this year. The food and beverage industry will have to figure out what the future of checkout looks like, providing consumers with the easiest and quickest way to pay a bill.

Were seeing a substantial increase in electronic POS systems like Belly, Touch Bistro and Square, with iPads becoming a standard choice for establishments, said Will Turnage, vice president of technology and invention at R/GA, New York.

Automating and systemizing the process for managing tables and alerting customers via mobile devices makes the overall dining experience more streamlined and con-


venient for everyone, he said.

Restaurants are following the lead of social media by providing a real-time way for customers to pay on their terms. Many companies are experimenting with new ways to pay and interact in restaurants (TabbedOut, My-Check), giving consumers more autonomy when its time to check out.

Commerce shiftAccording Scott Thaler, executive vice president of digital growth and innovation at Zimmerman, Fort Lauderdale, FL, consumers rank restaurant and food research as one

of their top activities on mobile. He expects this trend to shift to commerce quickly, significantly impacting the space.

Mobile will affect all aspects of the food and beverage merchants in 2014, from store locators to reservations to the actual in-store payment.

While consumers have jumped on board with most mo-bile offerings from restaurants and cafes, the payments and checkout factor may take a bit more effort from the merchants in terms of convincing consumers to join in.

Consumers will continue to have distrust of the safety of mobile payment systems, Mr. Thaler said. Especially some specific demographic targets who are not native to the digital space.

That is why marketers have to closely consider the expense and effort that they will need to put into the implementation of any type of operational change, he said. Minimizing both budget and effort to test a new program is a safe way to test what programs you might want to expand.

There is no doubt that mobile commerce will continue to affect the food and beverage category.

Gas stations will rev up mobile payments to boost loyalty programsBy Chantal Tode

Expect a much bigger role for gas stations and con-venience stores in mobile payments in 2014, based on the success of some initial efforts and the grow-


GAS STATIONS

ing impact mobile is having on everyday purchases such as gas or coffee.

More gas stations and convenience stores will also look for ways to integrate their loyalty efforts with mobile payments to drive convenience and use for both. Another key area of focus for these retailers will be on integrating their loyalty efforts with mobile payments.

As mobile commerce technologies continue to evolve expect to see more new ways to pay at the pump and in store in 2014, said Sarah Hodkinson, director of market-ing and sales strategy at PayPal Media Network, Boston.

Consumers are becoming increasingly familiar with mo-bile as a method of payment and through new initiatives to drive habituation through time saving conveniences and offers that enable the consumer to save money we can expect to see a ramp in adoption of these new ways to pay, she said.

The everyday spend category of gas stations, conve-nience stores and grocery is a key vertical for mobile payment adoption by consumers.

Driving customer convenienceGas stations and convenience stores are all about conve-nience and so is mobile, meaning strategies that pair the two make a lot of sense for smartphone users.

Retail stores in general are the most popular commercial venues where consumers use their mobile device, ac-cording to research from JiWire. Drilling down further, within the retail category, convenience stores are the second most popular retail venue where consumers use their mobile device at 18 percent compared to 28 per-cent for clothing stores.

Savvy gas station and convenience stores will leverage this knowledge to develop comprehensive mobile strate-

gies for engaging with shoppers both before they visit a location and while they are physically present.

According to our 2013 Mobile Path to Purchase study, mobile is the main source of information for the Gas & Convenience category 2/3 of mobile users did not le-verage any other form of media for information, said Sarah Ohle, director of marketing intelligence at xAd, New York. Mobile users want to make a decision right away, often within the hour, and the majority do go on to make a transaction after their mobile search.

When first looking for information on gas and conve-nience, many people are still undecided so there is plenty of room to influence their decisions, she said. Marketers should leverage this immediate need and reach people during their search to impact their purchase decisions.

Proximity and priceThe evidence of mobiles importance for the gas station sector is growing, which will spur more chains to jump in during 2014.

One very active chain in mobile is 7-Eleven, which has an active SMS program and a robust app that is regularly updated with mobile offer.

Cumberland Farms, Speedway and Kangaroo Express are also active in mobile.

One key strategy that will gain steam next year is geo-fencing, with PayPals research showing that the gas and convenience sector saw the biggest lift 68 percent - in click-through rate performance for mobile ad campaign by deploying geofencing.

Location and Price are keys to conversion - to aid in consumers desire to convert, marketers should offer convenient comparison tools and deals, xAds Ms. Ohle said. Finally, mobile users are accessing their devices on-the-go and typically trying to find locations within 5 miles. The combination of proximity and the right price will bring them in the door.

Hardware retailers edge toward mobile as traditional medias role shrinksBy Kari Jensen

Hardware and home improvement retailers have not been the swiftest to embrace mobile but they have made a few inroads, with key opportunities for


HARDWARE AND HOME IMPROVEMENT

further growing including mobile loyalty, coupons and social media.

Consumers who are looking to make a home improve-ment are increasingly using mobile tools to help them shop online to find inspiration, research the materials necessary to buy and locate nearby stores. Mobile is also a key technology for hardware and home improvement because it can be an effective way for shopppers to find what they are looking for in large stores.

This industry is not known for moving quickly towards new technology, said Pat Murphy, vice president of business development at Funmobility, Pleasanton, CA. However, they know that what theyve been doing in the past, print ads, circulars, etc., are becoming less and less effective.

My strong recommendation is that they accept that mobile is here to stay and they get started, even if they only want to test in a specific market or group of stores, he said. Start connecting with their customers one to one and see how powerful mobile can perform if done correctly.

Mobile inspirationWith consumers spending a significant amount of time looking for inspiration for their home improvement proj-ects, mobile is ideally suited to help them get in a few minutes of research when they have a couple of minutes of downtime.

For this reason, it is imperative that home improvement retailers have strategies in place with mobile social sites such as Pinterest and Instagram, where consumers are increasingly going to look for inspiration.

Such strategies will help home improvement retail-ers connect with younger consumers who are new home buyers.

Look for these retailers to do more mobile social compe-titions asking consumers to take pictures of their com-pleted home improvement projects and post them.

Savvy home improvement retailers will also look to part-ner with home improvement apps such as Houzz, that were developed to make it easy for home improvement customers to find inspiration and products at all once.

In-store assistantMobile is also heavily used by home improvement cus-tomers when they are inside a store to research products and look at reviews. This means that retailers will contin-ue to build up their mobile presence online so shoppers do not end up at a competitors Web site. This should include mobile video how-tos, shopping lists and other useful information.

Mobile apps that have an in-store mode to help shoppers find what they are looking for, read reviews and deliver


offers will also begin to appear.

One important area of focus for home improvement re-tailers will be on building an opt-in mobile loyalty data-base as the importance of email wanes.

Funmobility reports that the value of a mobile opt-in subscriber to a hardware store is between $1,022 to $1,322, with hardware dealers seeing mobile lift every month from $20,000 to $48,000.

Consumers on average own four email addresses and younger customers are using it less and less replacing it with text, Mr. Murphy said. I had one retailer lament to me that he has an email database of 46,000 and he sent out his holiday promotion and got only 200 opens. Retailers have to accept that younger customers and especially women prefer mobile coupons over paper, he said.

They have to continue to test and learn, there are no easy answers or guaranteed solutions. The key is to get in the game and build your mobile loyalty list and connect with your customers using the technology they live with every day.

Attribution will help beauty retailers drive omnichannel experiencesBy Rebecca Borison

As health and beauty retailers include mobile in more aspects of the purchase cycle, the need to focus on attribution to determine which tactics


HEALTH AND BEAUTY

are driving sales will be more important than ever in 2014.

Health and beauty retailers are leveraging mobile for all sorts of commerce-related actions, be it booking an ap-pointment, purchasing a product or locating a store from which to shop. This year, these retailers will need to fo-cus on determining what works and what drives sales.

Attribution is the opportunity in 2014, said David Shim, founder and CEO of Placed, Inc, Seattle, WA.

By directly measuring the impact of dollars invested in mobile, the health and beauty category can identify the tactics that drive sales replacing vanity metrics like CTR and app installs, he said.

OmnichannelAs opposed to thinking of mobile as an independent tac-tic, smart health and beauty retailers will be looking at it as a part of a bigger multichannel picture. The tagline is no longer mobile-first, but rather omnichannel.

The omnichannel experience is going to be critical in 2014, Mr. Shim said. Within health and beauty, mobile ad targeting can drive awareness, apps enable research and enhance in-store experiences and payment and lo-cation drive attribution.

In-store has been an area of focus in 2013 with show-rooming going mainstream, but the sector should re-member that there is a world of opportunity outside of the walls of bricks-and-mortar retailers, he said.

Retailers such as Sephora can attract out-of-store pur-chases via mobile in addition to bringing consumers in-store. To do so, however, retailers need to insure that they have a smooth and easy user experience on their mobile sites and applications, making it simple for consumers to purchase via mobile. They can also make their ads shop-

pable with various technology such as augmented reality and digital watermarking.

BeaconWhile Mr. Shim encourages health and beauty retailers to think beyond bricks-and-mortar, it is still important to provide the best in-store experience possible.

Rob Murphy, the vice president of marketing at Swirl, Boston, expects to see health and beauty retailers em-

brace Bluetooth Low Energy beacons available from Ap-ple, PayPal and others this year in significant way.

In 2014, we expect to see indoor location beacons in tens of thousands of stores as major retailers adopt this exciting new technology, Mr. Murphy said. In-store beacons will radically change the health and beauty shopping experience by enabling retailers to deliver per-sonalized offers and content precisely when the shopper is making buying decisions and is ready to spend.

Personalization has particular significance in the health and beauty sector where products are inherently spe-cific and unique to a consumer. If a store can look at a consumers purchase history and notice that someone has purchased an anti-frizz conditioner, for instance, the store can recommend a complementary product that helps reduce frizz.

The opportunity for beacon-enabled in-store marketing is huge and long-term success will require health and beauty retailers to carefully consider the customer ex-perience and the level of control, flexibility, and security that are required, Mr. Murphy said.

This exciting new capability is developing quickly and retailers are already jumping on board, he said.


Home furnishing retailers prioritize content in driving mcommerceBy Lauren Johnson

Despite the growing opportunity for home furnish-ing retailers to drive incremental sales from mo-bile applications and sites, they must hone in on


HOME FURNISHINGS AND HOUSEWARES

developing social and video content in 2014 to keep the mobile momentum going.

Home furnishing retailers will put a greater emphasis on engagement since decor and furniture can often be big-ticket purchases that require long periods of research.

Home goods have been one of the more recession resis-tant categories and we anticipate the trend to continue in 2014, said Edward Deutscher, operating vice presi-dent of digital technology at HSN, St. Petersburg, FL.

Customers are also increasingly shopping for home goods while they are on the go, from their mobile devic-es, he said. Weve seen an increase in purchases being made on tablet devices, particularly for big-ticket items because of the enhanced ability to view larger items.

Smaller home products across our HSNi brands are per-forming well on smartphones.

Big-ticket mobile merchandisingMarketers will need to incorporate mobile technologies that are aimed at showing consumers the dimensions and quality of products.

Home furnishing retailers such as IKEA and Home Depot turned to augmented reality in 2013 to demonstrate how a piece of furniture would fit into a consumers home.

Additionally, marketers will rely on augmented reality as a way to bring static pieces of collateral to life.

Prioritizing contentIt is no surprise that consumers are increasingly becom-ing more comfortable buying big-ticket items through their smartphones and tablets as retailers develop more sophisticated apps and sites.

However, mobile commerce will remain a relatively small

opportunity for retailers in driving revenue, particularly on smartphones with smaller screens

Forrester Research predicts that smartphone-generated sales will bring in $22 billion, or six percent, of total online sales in 2014.

The research firm forecasts that mobile will rake in $27 billion in online sales by 2014, which will be equivalent to eight percent of all online sales.

For flash sales sites such as One Kings Lane, mobile com-merce has become a crucial way to display limited-time merchandise to consumers, despite the hefty price tags.

Beyond commerce, social content is a big opportunity for home furnishing retailers in 2014 to inspire consumers with home design ideas.

Adding more mobile-specific content that can shared via social networks or email will likely be leveraged by more home furnishing retailers in 2014 with the goal of even-tually driving sales.

In particular, Pinterest is driving significant traffic to re-tailers mobile sites from consumers curating their favor-ite products.

Pinterest also released its API in late 2013 so that retail-ers can display top-pinned items on sites and apps.

Initial brands to leverage Pinterests tool include Target, Zappos and Walmart. However, given that home decor is one of the top product areas on Pinterest, home furnish-ing retailers are likely candidates for leveraging the tool in 2014 to take content strategies to the next level.

Commerce will continue to be part of our mobile strat-egy in 2014, and delivering decorating inspirations and ideas via mobile channels will also become increasingly important to online lifestyle brands such as One Kings Lane in the year ahead, said David Yu, chief product of-ficer at One Kings Lane, San Francisco.

Marketers must mix mcommerce and apps for successBy Kari Jensen

Marketers must dive head first into mobile com-merce in 2014, integrating mobile across their organizations in order to make gains.


MARKETERS

To get it right in 2014, marketers must push themselves to create a mobile ecommerce program featuring an ap-plication or portfolio of apps.

Their mobile-optimized Web sites should reroute users to an app download to keep the momentum going.

Marketers need to have a strong app capability to showcase their products, said Paul Rostkowski, presi-dent at Varick Media Management, New York. These apps need to be able to target specific users, markets and product types.

Mobile and tablet use is on the rise, providing fantastic opportunities for ecommerce marketers, he said. For example, 50 percent of Facebooks ad revenue came from mobile [in 2013].

I predict ecommerce to reflect the same makeup in 2014, with a large percentage of revenue coming from mobile applications.

Favorable ingredientsChallenges for marketers in 2014 will include under-standing that intricate sites with flashy creative and lots of video content will strain the bandwidth of some mo-bile carriers, according to Mr. Rostkowski.

Phones with poor connectivity will load these sites slow-ly, which could result in abandonment. There will most likely be some limitations to the speed at which users can access content and products on their phones or tablets.

Opportunities for marketers in 2014 exist in that user adoption of mobile and tablet over desktop will continue to ramp up, according to Mr. Rostkowski.

Theres also an opportunity for B2B marketers to lever-age mobile as a platform to reach their targeted business

segments, he said.

The rapid growth and usage of both smartphones and tablets for shopping will shape mcommerce in 2014 versus 2013.

Smartphone penetration will grow to 80 percent in 2014, up from 74 percent in 2013, according to eMarketer.

Tablet growth is projected to be 64 percent in 2014, up from 52 percent in 2013. There will be an additional 20 million smartphone users in 2014 versus 2013, according

to Dan Hodges, managing director at Consumers in Mo-tion, New York.

Winning combinationThe outlook for retailers that embrace mobile is bright, he said. Amazon, eBay, Wal-Mart and Macys have all seen positive bottom line results from their mobile efforts.

Mobile-influenced retail sales are expected to grow to $1 trillion in 2016, up from $158 billion in 2012, accord-ing to a Deloitte study and Consumers in Motion esti-mates, Mr. Hodges said.

Those companies that provide their consumers with choices will gain market share, he said.

The mobile ecommerce consumer is way ahead of most marketers allocation of budgets. Retail marketers that use traditional media mix modeling will be at a disad-vantage in allocating budgets to drive sales.

Our strong recommendation is to accept the reality that smart screens offer consumers the ability to interact with your brand 24/7, Mr. Hodges said.

Test, learn and scale in rapid innovation cycles is the key to success in a radio changing market, he said.


Mass merchants tap payments, social to boost mobile strategiesBy Chantal Tode

With mass merchants experiencing significant growth from mobile commerce during the 2013 holiday shopping season, it will be criti-


MASS MERCHANTS, DEPARTMENT STORES AND MALLS

cal for these retailers to further advance the shopping experience in 2014 for smartphone and tablet owners through a focus on payments, social commerce and mobile wallets.

The potential of mobile commerce is by no means lost on mass merchants such as Target, Walmart and others, as they aggressively invest in mobile solutions on a number of fronts, including in-store, online, native applications and point-of-sale.

With consumers spending growing amounts of time on their mobile devices, advertising budgets in this channel are also growing quickly.

Mobile commerce is a critical part in terms of how we are going to market and how we are connecting with consumers and making sure we are meeting them where they are at, said Ravi Jariwala, director of public rela-tions at Walmart, Bentonville, AR

We saw over 50 percent of our traffic to Walmart.com between the period of Thanksgiving and Cyber Monday came from mobile devices, he said. Last year, at our highest point during the holiday, we maybe got it up to 40 percent.

So, the fact that we are now over 50 percent really speaks to the growth that we are seeing in mobile and I think that is why it is going to continue to be critical to leverage that platform.

Cashless consumersOne important area of focus for mass merchants in 2014 will be on how to meet the needs of cashless consumers for whom digital interactions are eliminating the need to carry cash, coupons as well as plastic credit, debit and gift cards.

Over the past couple of years, mass merchants have re-

acted to the trend toward a digital economy by integrat-ing with Passbook and other digital wallets and promot-ing their own digital gift cards.

However, in 2014 look for a more focused, centralized approach to mobile payments.

For example, MCX, a consortium of leading mass mer-chants, is developing a mobile payments solution that is expected to launch soon.

In 2014, merchants and department stores will need to do a better job of updating strategies that react to the cashless society consumers crave, but also give them what theyre looking for in a mobile experience to drive sales across channels, said Tory Patrick, account director and leader of the retail technology practice at Walker Sands, Chicago, IL.

As consumers continue to adopt cashless strategies for shopping - our 2014 Future of Retail Study demonstrated that one in five consumers dont carry any cash and three in five carry less than $20 and those numbers were much


higher among younger generations - there is still a rela-tively low amount of consumers - only 8 percent - that are using Passbook-like mobile applications to pay for goods, she said.

Social shoppingAnother important area of focus for mass merchants will be social shopping. Retailers have been talking about leveraging technology to enhance the social aspects of shopping for years but some real strides were made in 2013 thanks to developments such as Twitters social commerce strategy and Pinterest giving retailers a way to feature pinned items on their own sites.

Look for retailers to build on these initial efforts in 2014 to simplify the shopping experience on mo-bile, where small screen sizes require innovative merchandising strategies.

There is a huge shift towards social commerce on mo-bile and that will continue to grow in 2014, Ms. Patrick said. Currently six in 10 consumers interact with brands on social media - even further 53 percent of consum-ers have had a YouTube video influence a purchase deci-sion and 17 percent have discovered a product through Pinterest.

Brands that want to be successful in 2014 will need to find a way to tie together not only the in-store and online/mobile commerce experience, but also the social commerce experience, she said.

Publishers push mcommerce in native ads to monetize contentBy Lauren Johnson

With advertisers increasingly demanding to prove mobiles value and readers consuming content on their smartphones and tablets at


MEDIA

unprecedented levels, mobile commerce will need to play a central role in publishers mobile initiatives in 2014.

With publishers such as Cond Nast now hitting 50 percent of traffic from mobile, 2014 will be the year that publishers will finally be forced to figure out mon-etization on sites and applications. This means taking a cross-platform approach that follows a reader across multiple screens.

Mobile commerce in 2014 will be more cross-platform than ever before, said Drew Schutte, executive vice president and chief integration officer at Cond Nast, New York.

It will also be more integrated directly into advertising than it has been, especially in native formats, he said. There will also be an increased use of data to drive con-textual and real time ad executions.

Commerce prioritiesAdvertisers increasingly want to take advantage of con-sumers glued to their mobile devices to drive direct sales from campaigns.

These readers already trust the publishers content when it comes to recommending products and servic-es, giving advertisers an advantage in connecting with publishers readers.

Publishers will need to take their existing content and add other elements such as location and motion to drive commerce for advertisers campaigns.

With the power of the banner ad dwindling, native ad-vertising is another way that publishers are tackling the need for relevant ads that fit in with other forms of content.

Often times, these native ads can be misleading as edito-

rial content, and publishers and organizations will have to set standards for the industry in 2014 to keep the momentum around native advertising going.

Additionally, publishers will need to find ways to make their mobile and native advertising units scale. The growth in digital consumption of content means that

advertisers want to reach more consumers than they have traditionally with big print media buys.

To help with building out native advertisers, publishers will turn more to programmatic ad buying by developing their own ad exchanges that let advertisers bid and buy inventory in real-time.

Print to mobileIn addition to leveraging mobile commerce within mo-bile sites and apps, publishers will activate their print pages with calls-to-action that drive sales.

Print-to-mobile technology is nothing new, but up until recently it has only been used by publishers to link read-ers to additional content.

In 2014, this will change as publishers offer print adver-tisers more ways to drive mobile traffic and conversions from glossy ads.

Magazine media are increasingly becoming a more im-portant point of inspiration for shoppers along their path to purchase, said Ed Knudson, executive vice president of sales and marketing at Digimarc, Beaverton, OR.

We expect more publishers to enable their audiences to seize that inspiration by providing shopping and shar-ing capability from print their most widely circulated platform, he said.

However, this also requires publishers to stick with one universal print-to-mobile technology so that readers do not need to download multiple apps to interact with the pages of a print magazine.

For example, Hearst Corp.s House Beautiful became the first magazine this year to leverage Digimarcs digital watermarking technology to bring advertising content to life.

The magazine has previously incorporated digital water-marks into editorial content for several years.

What we are seeing now is just the beginning of what

publishers are going to be able to do with mobile com-merce, said Kate Kelly Smith, senior vice president of the Hearst Design Group and chief revenue officer at House Beautiful, New York.

Our readers have always looked to us for ideas on what to shop for, and now they expect mobile commerce ca-pability to take that next step through to purchase, and were excited to bring that to them, she said.

There is tremendous opportunity for publishers in this space.


Winning mobile retailers get convenience right to bolster loyaltyBy Lauren Johnson

A s more consumers turn to their smartphones and tablets to shop, mobile retailers will need to win consumers over in 2014 with top-notch and in-


MOBILE RETAILERS

tuitive mobile shopping experiences to clinch sales.

Despite the growing volume of traffic, mobile still rep-resents only a fraction of online sales for retailers. For mobile commerce to grow, retailers need to look beyond cookie-cutter mobile sites and applications with richer features including virtual sizing, predictive product rec-ommendations and high-resolution photos.

In late 2012 and 2013, we saw mobile consumers exhib-it some rabid mobile shopping behavior, surpassing the PC-based Web in terms of frequency and engagement, said Adam Guy, senior vice president at Millward Brown Digital, New York.

They did this in spite of a mobile shopping experience that was less than satisfying, he said. In 2014, we ex-pect the convenience and immediacy of mobile to fur-ther trump the higher-quality and more functional expe-riences like the PC.

This will test the capacity and usability of mobile retail-ers. The ones who get it right will gain near-term share plus convert promiscuous shoppers into loyal buyers.

The fast laneWith mobile hitting upwards of 40 percent of revenue for flash sales sites Gilt and Rue La La in 2013, it is clear that traditional Web companies are bracing for a mobile-first shopping world.

The consumers that visit these online-only retailers are also accessing the brands more frequently. Research re-leased from Millward Brown at the end of 2013 shows that online pure play retailers such as Amazon or eBay average 5.8 monthly visits from a mobile shopper. On the other hand, bricks-and-mortar retailers only av-erage 2.9 monthly visits from a mobile shopper. This sug-gests that as retailers get more comfortable shopping

from their devices, they are looking for features that go beyond utility functions such as store locators that bricks-and-mortar retailers already have in place.

Instead, consumers are turning to their mobile devices for some of the features that are more exclusive to on-line retailers, such as frequent merchandising or tailored mobile-only offers.

Two thousand and fourteen will see greater investment in mobile where the emphasis will be on strengthening the customer experience, said Lauren Freedman, presi-dent of the e-tailing group, Chicago. Consumers will drive those desired experiences given their increased consumer adoption across the board.

Test and learnTo keep up with the natural advantage that online retail-ers have in the space, bricks-and-mortar retailers must step up to the plate with mobile in 2014.

Showrooming moved on from a novelty to the norm for retailers in 2013 with Best Buy, Staples and Toys R Us all embracing the mobile price-checking tactic to cre-ate more compelling in-store experiences. From in-store modes that help consumers navigate a store to reward-ing check-ins as part of a loyalty program, there is no doubt that retailers prioritized the in-store experience in 2013.

However, many of these efforts were pilot programs that were only tested at a handful of stores. This is likely to change in 2014 once retailers understand the impact of mobile from the recent holiday season.

I think retailers will view 2013 as the inflection-point year for mobile, moving from something to watch, to something that must be done and done well, said Nikki Baird, Denver-based managing partner at RSR Research.Lots of retailers have been experimenting, but the per-formance [of the 2013] holiday season will be enough to get them all to move those experiments into the main-stream.

Nonprofits look beyond text-to-give to charge mobile fundraising strategiesBy Chantal Tode

Redirecting mobile fundraising strategies in the face of growing questions about the viability of text-to-give programs will be an important focus for


NONPROFITS

nonprofits in 2014 as these organizations increasingly adopt a more holistic approach to reaching smartphone and tablet owners.

Nonprofits text-to-give strategies were delivered a cou-ple of blows near the end of 2013 with carriers all but eliminating support for premium texts and an update

to the Telephone Consumer Protection Act complicat-ing SMS marketing. With the amount of time consumers spend on mobile devices continuing to grow, nonprofits increasingly recognize the need to be in front of these consumers with a comprehensive, integrated strategy. Like any other organization that attempts to engage its supporters via mobile devices, charities must stop view-ing mobile engagement segmented by platform type, said Jim Manis Founder and CEO of the BBB Mobile Giv-

ing Foundation, Arlington, VA.

Messaging, apps, ads, and the web are all a part of the same symphony that delivers its music to you directly, and often in concert with other channels including so-cial, television, and radio, he said.

When you get those texts and tweets in sync with browsing, downloads and ad placements you can start applying a truer measure of the impact of mobile that define metrics against diverse goal sets including mis-sion awareness, donor acquisition, donor engagement, and funds raised.

Replacing text-to-giveText-to-give has been an important strategy for nonprof-its for a several years, enabling many to raise significant funds for specific natural disasters.

However, going into 2014, it is unclear how big a role text-to-give will have going forward.

The first difference we see as 2013 closes and 2014 ar-rives is the rapid decay in the interest around text-to-give, said Dale Knoop, founder and CEO of Raz Mobile, Overland Park, KS. We have many customers who have given up on text-to-give for reasons like cost, lack of do-nor info, lack of real-time reporting, no crowd-funding potential and on and on.

As mobiles importance continue to grow as a tool for searching the Internet and consuming digital content, one area where some nonprofits will place a greater emphasis in 2014 will be on developing robust mobile Web sites.

At the close of 2013, nonprofits are discovering that they have a growing amount of mobile traffic coming to their main URL and that relying on their PC site to serve mobile visitors is not the path they should take in 2014, Mr. Knoop said.

There are two reasons driving this, he said. One, Google could and will likely lower your search rank relevancy

without a mobile-optimized site available to mobile visi-tors to your main URL.

Two, there are reports coming out that nonprofits could be missing 50 percent or more of donations since their PC donation page, which is all they have for mobile visi-tors, is too hard to complete on a phone.

Social mediaNonprofits will also increasingly tap mobile applications and social media, including hash tag marketing, to raise funds along the lines of Googles One Today app that enables users to donate one dollar to charities and the holiday fundraiser for the Oregon chapter of Childrens Heart foundation that leveraged a mobile-optimized Facebook app.

In 2014 we see nonprofits no longer viewing the need for a great mobile experience as optional as they see oth-ers following the best practices as laid out by Googles change in their search algorithm and as they come to grips with the fact that their PC donation page is just too hard to complete on a mobile phone, Mr. Knoop said.


Office supplies push mobile envelope with in-store integrationBy Kari Jensen

T he office supplies sector will create more opportu-nities for consumers to use mobile devices to in-teract with displays and products in-store in 2014.


OFFICE SUPPLIES

Retailers will expect consumers to search and browse online with their mobile devices while in-store, whereas in the past that was not always a given. Savvy retailers will equip sales staff with tablets and smartphones so they can better service consumers.

Mobile in-store engagement is a trend that is red hot right now, said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston. Office supplies are a highly commoditized product line, so it is often not necessary for consumers to hold and touch every single SKU, before they buy.

Because of this, the office supply sector is a perfect sec-tor for smart retailers to experiment with product-less retail environments, that are powered exclusively by mo-bile, he said. QR codes and NFC tags can allow prod-ucts to link themselves to a mobile commerce experience that allows a consumer to convert the sale via a device they trust, [such as] their own smartphone.

And digital wallets like Google Wallet or PayPal Express Checkout can allow this sale to happen in one click.

Touch commerceIn 2014, for example, Unbound Commerce, will position for growth in office supplies by rolling out its touch commerce initiative, which will use large format touch-screens to allow consumers to engage via mobile com-merce, in-store.

The retail environment becomes a trigger point for in-tegrated mobile sales, delivered on a consumers smart-phone, or delivered in-store via these large screen touch kiosks, Mr. Kerr said. Staples has already announced several mobile concepts stores, and we expect to see more of this in 2014.

The biggest challenge the office supplies sector will

face in 2014 is the same challenge that many retailers are facing.

This is the threat of category killer online giants like Amazon, and their ability to undercut pricing and offer free shipping, etc., said Mr. Kerr.

Since office supplies retailers almost always have physi-cal stores and the accompanying overhead, they will need to be extremely aggressive with pricing, and ex-

plore brave new frontiers, that allow consumers to take advantage of the personal customer service they want, while also getting quick shipping and prices that match what they can find elsewhere, online, he said.

Expect new competition in the office supplies consum-ables /accessories markets from hardware and consumer electronics companies, as they are seeing greater mar-gins on these items than their core hardware products.

Just as Hewlett Packard went into the paper and print-

ing product sectors, look for Samsung and others to expand their offerings, said Jay Samit, executive vice chairman at Rock Dome, Los Angeles.

The combination of smartphones and cloud services will enable more people than ever before to work from home in 2014, so the small business /home office sector will see a major spike in sales of office supplies.

Making [applications] that anticipate office supply needs will be the secret to capturing this market, Mr. Samit said.

Another big change for 2014 in office supplies will be products designed for life on the go.

New wearable accessories for smartphones and smart watches will allow road warriors to increase their pro-ductivity, Mr. Samit said.

The biggest change in 2014 will be 3D cameras on most new smartphones, he said.

Similar to Microsofts Kinect for Xbox, these new Androids and iPhones will be able to be controlled hands-free.

An added benefit will be the ability to identify fore-ground images from background, so expect lots of people hanging small green screens in their cubicles or offices to make fun selfies, he said.


Leading online retailers leverage native-supported mobile platformsBy Lauren Johnson

T o stay ahead of the game in 2014, online retailers will move on from outsourcing mobile applications and sites to platforms that natively support the


ONLINE RETAILERS

medium to keep pace with consumers constantly chang-ing mobile expectations.

Online retailers have an advantage over bricks-and-mor-tar retailers when it comes to mobile since consumers are already accustomed to shopping online and are now doing so from their smartphones and tablets at record levels. However, retailers that treat mobile sites and apps differently than Web sites with cookie-cutter de-signs will lag behind those who integrate mobile i

Mobileoutlook2014mcd.rk .Revised

Documents

Transcript of Mobileoutlook2014mcd.rk .Revised