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Mobile Meets Retail at MWC 2012
Mobile phones have already changed commerce but we are still at the very beginning of the transformation.

Mobile financial services were again a central theme at the Mobile World Congress in Barcelona. Several of the presentations on the topic were hosted in the venue's largest auditorium, which marked a significant upgrade from one year back and highlights the level of attention that the subject is receiving. Comparing the themes of the presentations this year to those of the previous year provides a snapshot of how the discussion has evolved. At MWC 2011 the presentations on NFC revolved around mobile payments and the revenues that network operators can have the opportunity to generate. This year the focus was much more on the value added services that can be provided to both consumers and merchants as smartphones enter retail. At the end of the day it is the added value that will cause consumers and retailers to adopt mobile wallets, not the prospect of tapping a phone instead of swiping a card. The uncertainties around what business models mobile network operators will adopt have similarly become more clear. The consensus is now that revenues can be generated by charging merchants for the new value added services that can be offered as mobile wallets are adopted and mobile phones become an integral part of customers' holistic shopping experience. Business models that require consumers to pay a monthly fee or that build on operators taking a share of the interchange fees were discussed last year but have by large been abandoned now.

Exactly what these value added services will be is at the moment less clear, and most of the innovative services that will be used have most likely not been conceived yet. Nevertheless, the often cited loyalty and coupon programs are clearly an integral part of the equation. Mobile loyalty programs enable consumer to store loyalty cards in their mobile wallets, whereas electronic couponing enables better targeting and more efficient issuing of offers and simplifies the redemption process for the consumer. However, the real transformation is achieved when marketing, social, analytics and location-based services come together to transform the retail experience for consumers and enable merchants to gain vast amounts of new insights on the behavior of their customers.

Retailers and brands invest enormous amounts of money into marketing across a wide variety of channels with the goal of driving foot traffic and influencing the purchasing decisions of consumers. However, retailers have very limited if any insight into how their customers are behaving. Commonly merchants do not know that a certain customer has entered the shop until her loyalty card is swiped at the point of sale. If a consumer enters the store, walks around and looks at products, and exits without making a purchase the merchant will not even know that the customer has been in the store. However, all of this will change significantly during the following years as mobile phones penetrate and transform the retail shopping experience. Location data is at the center of several of these emerging services and applications. Examples include Foursquare, which enables people to find and check in at places and collect rewards, and Shopkick, which gives users rewards for entering a store and helps them navigate around the shop floor. Similarly, NFC tags will make their way into marketing channels such as billboard advertisements and to the shop floor where they for instance can enable consumers to retrieve more detailed information on a product and its availability. All of these new applications and ways of interacting with consumers are coming together as mobile meets commerce to shape the most significant transformation that the retail industry has seen for years.

Lars Kurkinen
www.berginsight.com

LI2014
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