Jan 13

Americans ramp up for m-commerce

Mobile commerce is set to rise. Forrester predicts that by 2017, the share of mobile phone users using their phone for m-commerce, will grow from 20 pct. in 2011 to 50 pct. in 2017. By then, the worldwide purchase volume from mobile devices will break the USD 1 trillion mark (including NFC and POS terminals), according to a forecast from IDC Financial Insights. Two-thirds of the total mobile commerce volume will be online/m-commerce transaction, while NFC will contribute with one quarter.

GO-Globe.com has provided some interesting (US specific) m-commerce data – like 80% of mobile user prefer locally relevant advertising. Check out their infographic below.


Nov 12

Banking: Service innovation is up!

Do you trust your bank? According to Capgemini’s 2012 World Retail Banking report, most people don’t: Twice as many customers around the globe (31%) say they have little or no trust in the banking system, compared to the 15.3% who say that they do. Yet, satisfaction is quite high – despite the fact that banks are struggling to cut cost and optimise earnings following the financial crisis.

Banks are rapidly cutting expenses. And, as The Economist points out, there’s a huge opportunity for this in closing branches. Renting, equipping and staffing branches can easily account for 40-60% of any big retail bank’s total operating costs, with computer systems making up most of the rest. So, we won’t be too surprised to witness the digital channels becoming more and more crowded as more and more banks seek to leverage the obvious operating savings.

In fact, Accenture’s 2011 report Boosting Relevance and Returns: Improving the Digital Channel in Banking quotes a Forrester forecast that predicts spending on the digital channel to rise from 12 percent in 2009 to 21 percent in 2014 (as a percentage of overall ad spending).

Branch revenues are falling, while online revenues are increasing and will continue to grow. So banks are increasingly pushing turnover through the digital channels because that’s where the customers are. Focus is on finding the optimal balance between (digital) channels with self-service capabilities for day-to-day financial transactions, and advisory-based channels (such as the branches) for more complex client needs.

Global Distribution of Sales Volume by Channels (%), 2000–2010E

Global Distribution of Sales Volume by Channels (%), 2000–2010E

Service innovation

For banks to pull forward, digital service innovation would seem like a plausible road to take? After all, their regular differentiation levers – low prices and innovative products have outplayed their roles: Prices are already challenging margins due to competition, regulation and new capital standards, and as banks increasingly market similar products, this commoditized market has limiting product innovation impact (cf. 2011 World Retail Banking Report).

As Forrester has pointed out, although uptake of money management tools is relatively low in Europe, one-third of online Europeans are interested in tools that will give them more insight into their spending.

Many Europeans are interested in money management tools, according to Forrester.

Many Europeans are interested in money management tools, according to Forrester.

Many of these services are already in the market. They’re just not offered by the traditional banks, but put to market by new, agile players with less resistance to innovation. Examples like Mint (organizing spending), Movenbank (social based CREDscore), and Fidor Bank (global-local, social, mobile banking concept) spring to mind.

Interestingly, in the 2011 World Retail Banking Report, Capgemini found that of the six most important factors affecting why customers leave a bank, only two were tied to economical considerations, the remaining four were all about customer experience. And the same goes for the reasons affecting why customers choose a bank.

The 6 top reasons that affect why customers leave a bank.

The 6 top reasons that affect why customers leave a bank.

This pattern has changed only slightly in the 12 months between the 2011 and the 2012 World Retail Banking report, with Fees and Interest rates moving up to 2nd and 3rd place respectively, but the overall picture remains the same: There is a huge upside for creating great customer experiences for banks!

“Positive customer experiences generate loyalty, but few banks consistently deliver them. Less than 50% of customers are having positive experiences through most channels today. Banks need to work harder to ‘wow’ customers as a way to strengthen relationships, as well as to improve loyalty and profitability.”

Digital channels are preferred for by customers for most banking activities: Information, service and day-to-day account history. But when complexity increases, branches are (still) preferred.

The branch is the preferred channel for purchasing complex financial products

The branch is the preferred channel for purchasing complex financial products

The key challenge for banks is to enhance the service in the digital channels. To lead customers towards the digital – not only for simple day-to-day transactions, but also for those high-profits interactions including advice and mortgages.

If traditional banks aren’t moving soon, other players will. They already have, and may well end up owning the relation to the customer.

What do you think? Can digital compete with branches? How can banks strengthen advice through the digital channels?

Jul 12

Ad spend upside

There is still a huge upside for internet and mobile advertising

There is still a huge upside for internet and mobile advertising

As print advertising spending declines, online share goes up. Experts estimate a USD 20B+ opportunity for internet & mobile advertising assuming ad spend share equals time spent share. (Source: KPCB Internet Trends 2012)

As internet surges, print is plummeting.

As internet surges, print is plummeting.

Nov 09

Cars need open innovation and apps

The other day when going to a meeting with a car maker client, I was a little early. So I went to the newsstand to browse magazines and ended up taking Fortune with me because of a small article titled “An App Store For Autos” (I just couldn’t resist).

In the article, the author suggests car makers a more open approach to software integration – after all, software is not what car making is about, so why not let others do that?

Audi and Mercedes have entered into collaborations with Bang & Olufsen to provide hi-end car-fi for the luxury segment’s audio experience, so integrating widget type features would seem only a small step away?

Open innovation

They seem to have gotten the message already at Ford, whose SYNC system (developed with Microsoft on their Microsoft Auto platform) is enabling synchronization with the driver’s media player and mobile phone, as well as offering traffic information. The news is that Ford is now opening up their development platform to embrace a model of open innovation.

In a statement, Ford says:

“The auto industry has long operated within a walled garden, with very little input from outsiders. The technology industry, on the other hand, continues to push the boundaries of innovation, and the result is a thriving industry that is delivering breakthrough technologies to customers.”

Letting people outside the industry join in development is a natural first step. Rethinking the in-car connectivity platform would seem the logical next.

In a way it’s similar to the discussion about the future of mobile services: Should mobile services be embedded in a browser (across platforms), or should they come as nifty, branded applications (for the individual platform)?

The way I see it, car makers should not be content with synchronizing people’s gadgets. They should provide enhanced in-car experiences with the help of open innovation – much like what we see on mobile platforms like iPhone and Android today (and what Ford is now spearheading with the University of Michigan collaboration).

With the expected surge in mobile broadband and data consumption and – not least – affordable data plans, there is a future lined up for in-car experiences that gets its juice from the cloud (check this PUGcast post for some interesting reflections on Cisco’s forecast) and functionality from in-car widgets. Cars will be able to connect with the environment, with other vehicles – and with the apps in these other vehicles.

A heads up windshield display from the not-so-distant-future, imagined by Wired

A heads up windshield display from the not-so-distant-future, imagined by Wired

The connected car

The Fortune article discusses ideas for apps that could be used e.g. to protect (limit?) certain drivers – say an old (or young!) family member, but why not extend the thought? With the car connected to the internet we can begin to look at it “as a node in a network,” as a recent Economist article wrote. I would be able to sync my car – not with my phone or music device, but with my entire music library, my contact lists, as well as those countless other services that belong to my online existence – e.g. my social graph that could be integrated with yet other services into the (soon to come) heads up display that will be the next generation windshield.

Not only would I be able to stay connected whilst on the road; I would also be able to enhance this experience with the integration of e.g. location based services, augmented systems to let me look around the corner through walls (as this post shows – online surveillance footage could be feeding this?), suggested routes (based on my preferences for landscape/shopping/gas/traffic the car would harvest from the surroundings), Google maps (with its new navigation app, needless to say) and of course: Fully integrated (geo tagged) social networking.

If the car industry has too long development cycles to make this happen (as recently suggested by BusinessWeek), leave it to others and the after-market, but please let us have a common platform this time!

What do you think?