It's no secret that mobile commerce has exploded this year. People are glued to their mobile devices, period. With a shift toward mobile and tablet commerce, we anticipate that these two types of devices will continue to play an increasingly important role in the marketplace. 2011 has been a good year for mobile and tablet, and we've identified seven key trends that will continue evolving as this space widens and expands. Let's get into it.
Oh, and if you want to check out our other top trends lists, take a peek at our founder Richard MacManus' top social web products, Jon Mitchell's top web-based consumer products, Dan Rowinski's top mobile products and John Paul Titlow's top five online music trends.
1. Just Gimme My Mobile Wallet, Man
There are a lot of deviations of a mobile wallet, and everyone does it differently. Essentially, the mobile wallet is exactly what it sounds like: A service that stores everything you would normally put in a physical wallet, including debit and credit cards, coupons and loyalty cards, in a mobile wallet. Not all wallets store data on the phone itself; SCVNGR's LevelUp and PayPal, for example, store data in the cloud. Your mobile wallet arrives empty, just like an wallet. You decide what goes in it.Google's mobile wallet works off of an NFC chip called the Secure Element, which acts like a secure wallet and differentiates this product from being just an app. It's also separate from the phone's main operating system and hardware.
Google launched its Wallet program in late May. The official launch (yes, a beta) happened in September. Google chose MasterCard as its official partner in the realm of mobile payments using near-field communications (NFC). At the time of launch, Nexus S 4G on Sprint with Citibank and payment network MasterCard was the only phone compatible with Google Wallet.
The industry is preparing for Wallet, but the consumer side isn't quite there yet. In September, however, Visa also signed a licensing deal to include credit and debit cards in Google's Wallet program.
MasterCard's has begun its shift toward technology innovator thanks to its new partnership and investment with mFoundry. This solidifies MasterCard's commitment to the field of mobile payments.
PayPal has a slightly different vision for its mobile wallet. With a wallet in the cloud, consumers can select a payment instrument (credit card, debit card, bank account) and then use any Internet-connected device to enable that purchase. Really, PayPal wants to be technology agnostic, meaning that its mobile wallet should work on any device regardless of the operating system. In mid-November, PayPal unleashed its mobile wallet that features a card and a smartphone app that lets consumers store credit cards, gift cards, frequent flier miles and more.
Speaking of mobile wallets, whatever happened to Apple's iWallet? NFC never did come to the iPhone4S.
2. Where NFCs Will Go, Few Do Know
NFC (near field communication) enables the exchange of data between devices (typically, mobile devices) that are in close proximity to each other. NFC devices are used for more than just payments, though - they can be the link between real world actions and consumer-facing or back office systems. While card issuers love NFC options, they would force payment processors to radically redesign. Are consumers ready to trade in the swipe of a credit card for the tap of an NFC-enabled device?NFC may never be widely used as a form of payments, writes RWW mobile expert Dan Rowinski. While the technology around NFC is ready and being widely adapted within the industry, the actual infrastructure is not there yet. But the NFC hype is here.
Since Google's Beta Wallet launch in September, it has partnered with Mastercard, CitiBank, Sprint, FirstData, Verifone, VivoTech (NFC partner), Hypercom, Igenico and NXP (NFC partner). On the opposing end, NFC mobile payment solution ISIS is poised to attack Google's Wallet; it recently partnered with Verizon, T-Mobile and AT&T.
In 2012, there will be more NFC-enabled Android devices. For now, only the Samsung Nexus S and a few others have mobile wallet capabilities.
Lest we forget PayPal, it is important to note that it recently launched an Android app that allows for money transfer via NFC.
3. Carrier Billing Is Alive And Kicking
Carrier billing allows users to pay for apps on their mobile phone bill instead of using a credit card or a third-party mobile payments service to pay at the time of purchase. This payments system is moving right along.In April, Spring joined T-Mobile and AT&T to support carrier billing in the Android Market. Mobile payments company BOKU went live for Android app developers in June. It began offering carrier billing on 230 operators in 56 countries worldwide. eBay purchased mobile payments company Zong in July, and integrated it into PayPal. Zong allows users to make mobile purchases through carrier billing. PaymentOne, another leader in carrier billing, lets users pay with their phone numbers, and validates transactions via text.
4. Offers, Offers and More Offers
With the daily deals craze dying down post-Groupon IPO, mobile offers are springing up. Google Offers,
Google's response to Groupon's daily deals, continues to expand and
personalize its deals. It recently stepped into the mobile commerce
space with an Android app. Amazon entered the daily deals space with Amazon Local. Mobile commerce isn't a part of the story, but with Amazon's hefty investment in Living Social
and an infrastructure far more mature than Groupon's, Amazon may be
waiting for just the right moment before really making its move.Meanwhile, daily deals superhero Groupon moved further into the location-based mobile commerce space through a partnership with Loopt. Soon after the Loopt announcement, Groupon launched Groupon Now, which inserts real-time, location-based offers into the daily deals game. Such offers are usually only available for a few hours, do not include the typical Groupon tipping point and are meant for impulsive mobile users.
5. Shop Till You Sit: Tablet Commerce
Tablets
are all the rage this year. A recent study by eMarketer.com predicts
that one in three online consumers will use a tablet at least once a
month by the year 2014. Appel iPads are positioned to dominate the tablet market until 2015.So what are people doing on their tablets? Shopping, naturally. And thus the boom of tablet commerce.
Amazon.com, the top revenue-producing Internet retailer, naturally leads the pack with a strong tablet-optimized site. Couch commerce, the act of sitting on one's couch and shopping from a smartphone and tablet, saw a strong increase this year - especially after Thanksgiving dinner and on Black Friday.
Amazon launched its Kindle Fire tablet on September 28. ReadWriteWeb Writer Jon Mitchell calls it a store with a screen, quite literally suggesting that its sole purpose is to be a media consumption device. As the Kindle Fire continues to gain consumer mindshare and more developers flock to the Amazon Appstore (don't call it the App Store, OK?), we expect more tablet commerce growth in this area.
Shopping catalogs designed specifically for tablets will add to the tablet commerce experience. Google launched a shopping catalog app for tablets back in August. Google Catalogs, as they're called, are like "window shopping with your iPad and Android tablet." The only potential problem for retailers? Now they won't have catalog readers' home addresses on hand.
6. Location and Local Groundswell: Chicago to Des Moines to Boston and Back Again
The partnership between daily deals service Groupon and location check-in Foursquare was a big one. The two got together and made it happen. Or, as the Groupon blog says, "when we think of mobile addiction beyond Now! we think foursquare, and many of you guys do, too." The idea of positioning daily deals on Foursquare as an "addiction" doesn't exactly insure longevity; rather, it signals imminent burnout. But hey, we'll forgive Groupon's marketing team - with Groupon's stock prices slumping, the company is needs to keep looking for new ways to hit up consumers.
Dwolla, mobile payments system based in U.S. mobile payments capital Des Moines, Iowa,
seeks to completely sidestep credit cards. Unlike its main competitor
PayPal, Dwolla does not snag a percentage of the transaction; instead,
it asks for a shiny silver quarter, regardless of the transaction
amount.LevelUp from Boston-based SCVNGR brings location-based gaming to the daily deals space. The idea is simple: Users will receive better deals the more they use the system. Much like the "unlocking" of Foursquare badges, LevelUp users will unlock new "levels" of awesome deals with particular merchants as they continue buying. Like its competitor Dwolla, SCVNGR recently began building local mobile payments into LevelUp.
7. Don't Forget The Dongle
Dongles refer to a device that is connect to a computer to allow access to wireless or protected software. In the case of mobile commerce, a dongle would be a mobile credit card swiper that attaches to the mobile device. Square, Verisign and Intuit lead the way in dongle innovation. But with Google Wallet and NFCs (near field communications) on the move, do dongles have a future?
Square's Card Case digital wallet is a dongle. It lets you pay by saying your name and only your name - if the merchant you visit is in the Square directory. With its dongle reader, Square aims to make mobile payments mainstream. Intuit's recent mobile payments innovation introduce the dongle-to-debit-card. The company wants to make it easier for small- and medium-sized businesses to accept transactions on the go. While Square is the leader in the dongle world, Intuit offers QuickBooks, tax refunds, bank partnerships, health check-ins and other management systems. Dongle providers such as Verifone, Intuit, Erply, ROAMPay, TRUSTe and PayAnywhere will continue to push their products as the space evolves.
Conclusion
Mobile commerce is at a tipping point. It has not hit a critical, mainstream mass, however. First, the battle of NFCs vs. mobile wallets vs. dongles will need to settle, with one emerging and the others either following and finding their niches, or disappearing completely.Carrier billing will play a crucial role in how consumers start easing into the idea of mobile commerce. The daily deals space will become more focused on mobile, particularly in the ares of personalization and location-based targeting - people who use their phones are glued to them, naturally, and they must start receiving time-sensitive offers at exactly the right moment.
Tablet commerce will continue to expand, as more people buy tablets and engage in "couch commerce." Catalogs, tablet-optimized websites and fast conversion rates make this the perfect platform for capturing consumers who already feel devoted to their tablets. In the dongle space, Square will continue to position themselves as the thought leaders, though they will face a fierce competition from Intuit.
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