Transcript

The Mobile ConsumerInsights on Global Trends Impacting Mobile Momentum and Customer Engagement

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© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Table of Contents

4 Introduction

5 Devices, Appetite and Use

8 Maturity, Lifestyle and Work

11 PreferencesandLevers

14 MobileWalletOpportunities

17 Conclusion

20 Appendix

The Mobile Consumer: Executive Summary

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Creating demand for mobile services relies on an understanding of mobile user behaviour. The following report provides marketers in the mobile industry with insights on the global trends impacting mobile momentum.

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A global mobile user base is dynamic, complex and increasingly sophisticated in terms of needs and expectations relating to service delivery.

Regional appetite for different mobile services and applications varies dramatically and the ways that users transact and communicate via mobile depends on the activities undertaken. Cultural, economic and technology norms shape regional uses of mobile, whilst an array of user requirements influence preferences towards appropriate marketing channels, relationships and incentives as they shop, spend and surf.

In order to make informed marketing decisions and better understand mobile momentum and customer engagement across the globe,SAP commissioned independent researchamong mobile users across 4 key regions, encompassing 17 countries:

• North America (NAM)• Europe, Middle East and Africa (EMEA)• Latin America (LATAM)• Asia Pacific (APAC)

Many countries within the regions have already reached a level of mobile maturity, yet for others mobile device use is evolving. This varied momentum contributes to differences in mobile ownership, appetite and behaviour.

Growth in smartphone technology and the blur of social, mobile and traditional marketing channels have seen users becoming motivated by a range of complex factors. The greater the sophistica-tion of mobile use, the greater the sophistication of consumer needs. As the commercial elements of mobile interaction continue to take shape, CMOs capitalising on mobile channels need to balance the advancement of mobile functionality with these needs. Not all successful examples of mobility are based on ‘bleeding edge’ innovation. The right service for the right user, marketed in the right way is a simplistic, yet appropriate, mantra for marketing strategy in the mobile sector.

Introduction

RESEARCHMETHODOLOGY12,424interviewswereconductedwithadultsaged18+whoownamobilephone(basicorsmartphone).RespondentscompletedanonlinesurveyinMarch/April2013.ResearchconductedbyLoudhouse,anindependentresearchagencybasedinLondon.

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Mobile devices have always given users the flexibility to communicate with each other on the go – 79% either make or receive calls on their mobile phone daily, with 62% either sending or receiving texts on a daily basis.

Yet the mobile phone in today’s world has become an increasingly powerful Internet tool. Half (50%) of respondents globally access the mobile Internet on a daily basis. The way in which users now transact has subsequently evolved: while enjoying the benefit of greater flexibility, consumers are now more inclined to shop on their mobile device. Indeed, one in three (32%) has purchased products or services over the last 12 months via their mobile phone.

The convenience of mobile communications and transactions has been a significant driver behind the increase in user adoption. Consumers cite the ability to use their device any time of the day (51%), ability to use on the go (51%), convenience

(50%) and speed (50%) as the main benefits of communicating and transacting with service providers through a mobile phone.

Nevertheless shopping behaviour also brings challenges for users. A significant minority (46%) note the hassle of having to enter a lot of personal information as a significant challenge when transacting and communicating via their mobile device. Additionally, 45% express safety concerns with mobile transactions, with 43% citing a lack of access to the Internet at the time of transaction.

Globally, mobile purchasing shows huge potential, with the majority of users (82%) expressing an appetite for buying goods and services through their mobile devices in the future (Figure 1). Over half (53%) have not used their mobile to buy goods, but wish to do so in the future, whereas 29% have used their mobile to do so, and wish to continue. Only 1% has used their mobile to shop for goods and shows no desire to do so in the future.

Devices, Appetite and Use

82% of users express an appetite for buying goods and services through their mobile devices in the future.

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© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Mobile creates an opportunity for marketing strategy, but also carries a risk. Consumer enthusiasm for mobile freedom and flexibility must be respected. The desire to do more on mobile does not represent novelty, or a blind faith in mobile Internet services. It is a calculated response that comes with conditions – to ensure end user engagement mobile must equate to simplicity, convenience or value.

Furthermore, 80% of users agree that organisa-tions should use any available technology to make life easier for their customers. Such is the expectation of interconnectivity amongst today’s consumers, that users are willing to hold service providers accountable if they fail to uphold high standards. Indeed, over half (54%) agree that they would switch to a different service provider if they could interact with them better on their mobile phone.

Not used mobile to buy goods but want to 53%

Net: Want to buy goods / more on mobile: 82%

Figure1Appetite for purchasing via mobile

Used mobile to buy goods and

want to do it more 29%

Used mobile to buy goods and content 1%

Not used mobile to buy goods and

content 17%

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Such is the reliance of mobile phones in emerging markets that 83% of users believe that having their mobile lost or stolen would really affect their personal productivity, compared to 70% in developing markets and 52% in mature markets.

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Just under two-thirds (63%) agree that, compared to 12 months ago, they use their mobile phone for more activities other than making calls and texting. However, the degree to which this is occurring across the globe varies between countries. Three distinct groups emerge when looking at the extent to which people use mobile devices: mature, developing and emerging markets (Figure 2).

• Emerging markets: South Africa, India, Saudi Arabia, Chile, China, Mexico

• Developing markets: Spain, Brazil, Russia, Colombia, Egypt

• Mature markets: Japan, USA, Germany, France, Australia, UK

While emerging markets show a greater pace of change, mature regions appear more reserved. These groupings show significant differences in mobile appetite and mobile lifestyle. Enthusiasm for mobile devices is evidently stronger in devel-oping markets, and this leads to a stronger appetite for mobile phone use. Some 96% of users in emerging countries express a desire to use their mobile to buy goods or services in the future, compared to 59% in mature markets.

Such is the relationship with mobile services in emerging markets that 75% of users agree that they rely on their mobile phone to help manage their lifestyle, compared to 69% in developing markets and 45% in mature markets.

Figure2Agreement with statement: “Compared to 12 months ago, I use my mobile phone for more activities other than making calls and texting/sending”

87%

Mexico China Chile UKSpainBrazilRussiaColombiaEgyptSouthAfrica

IndiaSaudiArabia

USAGermanyFranceAustralia Japan

86% 84% 83% 80% 74% 69% 67% 66% 63% 63% 50% 47% 47% 44% 38% 37%

Emerging mobile markets Developing mobile markets Mature, saturated mobile markets

Global 63%

Maturity, Lifestyle and Work

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Yet the reliance on mobile seen in emerging markets is not a smartphone-only phenomenon (Figure 3). Only in mature regions is there a strong link between smartphone sophistication and lifestyle influence. In emerging and developing markets Internet-enabled and more basic devices are equally likely to influence owner lifestyles.

Such is the reliance of mobile phones in emerging markets that 83% of users believe that having their mobile lost or stolen would really affect their personal productivity, compared to 70% in developing markets and 52% in mature markets.

There are many factors that underpin these regional trends, but they can be summarised into three key areas:

• Economy: GDP growth and relative consumer momentum in BRIC and similar economies

• Infrastructure: Mobile network and mobile Internet services outperform legacy telecoms infrastructure in some developing regions

• Device culture: Basic handset use and transactional SMS services are more prevalent in developing and emerging regions

Figure3Agreement with statement: “I rely on my mobile phone to help manage my lifestyle”

87%

Egypt India SaudiArabia

ColombiaGermanySpainChileBrazilSouthAfrica

ChinaMexicoRussia JapanUSAUKAustralia France

85% 79% 80% 79% 78% 74% 77% 67% 69% 61% 61% 58% 60% 64% 50% 49%

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73% 78% 70% 75% 69% 75% 68% 64% 51% 47% 45% 43% 38% 27% 26% 32% 21%

Smartphone owners

Basic phone owners

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The rise in the sophistication of mobile devices has coincided with a similar increase in the scope and variety of purchases made through mobile phones.

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.

Preferences and Levers

The rise in the sophistication of mobile devices has coincided with a similar increase in the scope and variety of purchases made through mobile phones. Users who make purchases via mobile are most likely to buy entertainment services (43%), pay telecoms bills (42%) or purchase music downloads (40%) (Figure 4b).

Figure 4a groups various types of mobile purchases into three distinct categories: Tickets, Bills and Retail. These groups represent a spectrum of purchase complexity and motivations:

• Tickets: simple purchases of paper or virtual tokens that provide access to a service or event

• Bills: mandatory payments for goods or service already received or utilised

• Retail: physical items purchased and commonly dispatched by post

Various marketing levers to encourage mobile use against each purchase type were evaluated to understand user preferences for things such as prompts or characteristics of the operating environment. Findings from this evaluation describe a relationship between purchase ‘drivers’

More sophisticated purchases need more complex levers

Figure4aDrivers for different purchase types using mobile

TicketsThose who have purchased tickets by mobile:

• Would pay more by mobile if incentivised by brands/services

• Would like to sign up for service/promotion via mobile

BillsThose who have paid bills by mobile:

• Would pay more via mobile if easy interface/ incentivised by brands and services

• Would like to research products via mobile

RetailThose who have bought goods by mobile:

• Would pay more by mobile if receive regular order updates/if accepted by more retailers/if incentivised by brands and services/greater choice of payment methods

• Would like to sign up for service/ promotion via mobile

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.

and purchase types that aligns the complexity of what is paid for with a sophistication of the journey to the item or service itself.

For example, simple promotions are preferred when buying tickets, whilst order updates, tracking and payment choice prompt more complex purchases. Indeed, 64% agree that a greater choice of payment methods would encourage them to make a purchase from an organisation. Ease of use and the need to research are more prevalent when paying a bill.

This ‘sophistication correlation’ can also be seen in other activities conducted on mobile phones outside of purchases specifically. When looking for simple information (such as checking the status of an order), it is security assurances, discounts and speed of interaction that are likely to drive user behaviour. When executing actions (such as com-municating with a customer service department) users’ needs change, as they expect a greater level of choice, in-depth help and personal interaction.

Figure4bPurchase types using mobile

Entertainment Telecoms bill

Music downloadsBooks/e-books

Clothes/footware/other attireTickets for travel/transport

Utility billsElectronic appliances

Groceries/foodTravel/holidays

Home furniture/goodsJewellery

OtherDon’t know

43%

42%

40%

40%

34%

2%

14%

9%

16%

21%

29%

30%

31%

39%

Base: Those who have bought via mobile (n=3966)

Tickets Bills Retail

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Ease of use is a core principle that will accelerate user adoption of mobile transactions and should not be overlooked at any stage of the services delivery process.

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.

Mobile Wallet Opportunities

Figure 5 shows that checking mobile phone usage data and researching products, prices and tariffs are all activities which users would like to do on their mobile phone and which they also feel are relatively easy. However, transactional activities, such as paying a bill or banking, are felt to be more difficult to conduct on mobile devices. Users undertake simple tasks more frequently, yet express a desire to undertake ‘high value’ exchanges and transaction although the additional complexity compromises adoption.

Despite the relative complexity of transactional

activities and mobile commerce, there is a signifi-cant opportunity for Internet brands to develop these processes for future customer engagement. Consumers are interested in paying a bill, making a bank transfer and submitting usage data for utilities via mobile devices, but there is a threshold to cross.

The demand for more streamlined transactional process is reflected in customers’ expectations of the ‘mobile wallet’. Users perceive mobile wallets as a way to pay bills (54%), buy goods online (51%) and a way to check their bank balance (50%).

Figure5Opportunities – ease of mobile interactions vs. demand for mobile interactions

Paying a bill

Buying goods

Paying money to a friend or family member

Signing up to a service or promotion

Entering a competition

Changing contact details or personal information

Communicating with a customer service department

Checking usage data for my mobile phone account

Researching products, prices or tariffsChecking the status of an order

Responding to a promotion or making use of an offer

Making a bank transferChecking usage or submitting

usage data for utilities

Setting up a new account

Hard Easy

Lessdemand

Moredemand

Ease of doing on mobile phone

Wou

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do

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mob

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A further 47% expect mobile wallets to enable bank transfers between accounts. Consequently, 71% of respondents, globally, agree that mobile phones will be more important as a payment method in the future.

Smartphones and the mobile apps boom increase the potential and sophistication of mobile services

and offers. Coupled with the promise of greater insights via ‘big data’ analytics and the advent of more subtle and intricate customer relationships, there is an inevitable complexity surrounding the future of mobile. Ease of use is, however, a core principle that will accelerate user adoption and should not be overlooked at any stage of the services delivery process.

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71% of respondents, globally, agree that mobile phones will be more important as a payment method in the future.

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On its current trajectory, mobile occupies a tempting combination of loyalty card, cash, research tool, location tracker and credit card.

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.

Conclusion

The commitment to mobile as a recognised ‘transactional device’ changes both the marketing potential and data capabilities offered by mobile services. On its current trajectory, mobile occupies a tempting combination of loyalty card, cash, research tool, location tracker and credit card. This transition raises the stakes for organisations marketing and connecting to customers either exclusively via mobile or as part of a multi-channel mix.

Brand loyalty becomes essential as any business on the mobile browser has the potential to own the customer relationship and all service providers now compete for mindshare in a space that was once the exclusive domain of telecoms businesses. The research points to five key elements that should inform CMO thinking to best tackle the challenges that lay ahead.

ThePaceofChangeThe Mobile Consumer research survey shows an international mobile user community running at different speeds, maturing at different rates and presenting different opportunities, creating marketing complexity. Emerging economies are more enthusiastic about a mobile future and make a more overt connection between mobility and its impact on their lives. They are less reliant on leading edge technology to drive behaviour and eager to try new things. Mature economies, such as Japan, US and UK are more reserved, sceptical even, about mobile pace and potential, but recognise the significance and value of more integrated, easier-to-use mobile environment offering a broader spectrum of mobile services.

AdoptionOptions‘Macro-momentum’ may differ across each region, but within each group the research also shows that users express preferences around the functionality and models of engagement based on the type of mobile activity they undertake. Checking a train time is about ease of use, buying the ticket is about speed and security, but reserving a hotel room or buying a travel case for the journey online requires all kinds of prompts and assurances: payment choice, status checking, incentives and customer service.

OpportunityOptimisationUsers enjoy undertaking simple information-based activities as they are easy and, in return, convenient to do. Yet complex functionality brings with it practical challenges. A significant opportunity exists for mobile service providers and brands to capitalise upon. Providers should understand that users now expect to be able to engage at a higher level, and they seek to do so simply and effectively. Providers are tasked with meeting and exceeding these expectations.

SimpleMobilitySimplicity forms the basis of why users embrace mobile technology – adoption of services is accelerated by ease of use. Simplicity brings with it convenience, and this in turns creates benefits for users. However these benefits can be compromised by unwanted complexity and security threats. The mobile industry should seek to minimise, or at least appease, such concerns going forward. In practice a careful balance needs to be maintained. Whilst simple functionality is

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fundamental, if security is the source of complexity issues, it is often a necessary price to pay.

SmartphonetoSmartServicesAs the level of device sophistication starts to become commonplace, a transition from focusing on ‘device tech’ to service becomes more apparent. As a result, consumers will be increasingly influenced by service excellence over technology sophistica-tion. This places pressure on the marketing and operational infrastructure of business selling and

providing services via mobile – technology companies have to become more ‘service-centric’ and service businesses (banks, retailers, etc.) have to adapt to working in a complex mobile environment. As the landscape transforms, mobile brands must understand their customers better in order to fully realise and capitalise on the customer relationship. By doing so, mobile providers and brands will be better placed to engage users and create higher value services in the future.

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Providers should understand that users now expect to be able to engage at a higher level, and they seek to do so simply and effectively.

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Consumers will be increasingly influenced by service excellence over technology sophistication.

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CountryBreakdown

USA USA 1072

EMEA UK 1159South Africa 638France 513Germany 523Russia 1043Egypt 500Saudi Arabia 502Spain 564

LATAMBrazil 1012Mexico 513Colombia 514Chile 583

APACChina 1000India 1050Japan 651Australia 587

Research Methodology12,424 interviews were conducted with adults aged 18+ who own a mobile phone (basic or smartphone). Respondents completed an online survey in March/April 2013. Research conducted by Loudhouse, an independent research agency based in London.

Appendix

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

AboutLoudhouseAs part of Octopus Group, Loudhouse is one of the UK’s leading performance and influencer marketing agencies, working with blue chip clients in technology, business services, finance and retail sectors.

Formoreinformation,gotoloudhouse.co.uk

AboutSAPAs the market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device, SAP empowers people and organisations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 195,000 customers to operate profitably, adapt continuously, and grow sustainably around the world.

Formoreinformation,gotosap.com


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