The Mobile Consumer Insights on Global Trends Impacting Mobile Momentum and Customer Engagement
Table of Contents 4 Introduction 5 Devices, Appetite and Use 8 Maturity, Lifestyle and Work 11 Preferences and Levers 14 Mobile Wallet Opportunities 17 Conclusion 20 Appendix 2 / 21
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. 3 / 21
Introduction 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 research among mobile users across 4 key regions, encompassing 17 countries: 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 sophistication 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. North America (NAM) Europe, Middle East and Africa (EMEA) Latin America (LATAM) Asia Pacific (APAC) RESEARCH METHODOLOGY 12,424 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. 4 / 21
Devices, Appetite and Use 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. 82% of users express an appetite for buying goods and services through their mobile devices in the future. 5 / 21
Furthermore, 80% of users agree that organisations 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. 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. Figure 1 Appetite for purchasing via mobile Used mobile to buy goods and content 1% Not used mobile to buy goods and content 17% Not used mobile to buy goods but want to 53% Used mobile to buy goods and want to do it more 29% Net: Want to buy goods / more on mobile: 82% 6 / 21
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. 7 / 21
Maturity, Lifestyle and Work 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 developing 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. Figure 2 Agreement with statement: Compared to 12 months ago, I use my mobile phone for more activities other than making calls and texting/sending Emerging mobile markets Developing mobile markets Mature, saturated mobile markets 87% 86% 84% 83% 80% 74% 69% 67% 66% 63% 63% 50% 47% 47% 44% 38% 37% Global 63% Mexico China Chile Saudi India South Egypt Colombia Russia Brazil Spain UK Arabia Africa Australia France Germany USA Japan 8 / 21
. 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 Figure 3 Agreement with statement: I rely on my mobile phone to help manage my lifestyle 87% 85% 79% 80% 79% 78% 74% 77% 67% 69% 61% 61% 58% 60% 64% 50% 49% 73% 78% 70% 75% 69% 75% 68% 64% 51% 47% 45% 43% 38% 27% 26% 32% 21% Egypt India Saudi Arabia Russia Mexico China South Africa Brazil Chile Spain Germany Colombia Australia UK USA Japan France Smartphone owners Basic phone owners 9 / 21
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. 10 / 21
. 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 Figure 4a Drivers for different purchase types using mobile Tickets Those 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 Bills Those 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 Retail Those 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 More sophisticated purchases need more complex levers 11 / 21
. 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 communicating with a customer service department) users needs change, as they expect a greater level of choice, in-depth help and personal interaction. Figure 4b Purchase types using mobile Entertainment Telecoms bill Music downloads Books/e-books Clothes/footware/other attire Tickets for travel/transport Utility bills Electronic appliances Groceries/food Travel/holidays Home furniture/goods Jewellery Other Don t know 2% 9% 14% 16% 21% 29% 31% 30% 34% 43% 42% 40% 40% 39% Tickets Bills Retail Base: Those who have bought via mobile (n=3966) 12 / 21
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. 13 / 21
. 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 significant 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%). Figure 5 Opportunities ease of mobile interactions vs. demand for mobile interactions More demand Paying a bill Checking the status of an order Researching products, prices or tariffs Would like to do more of via mobile Less demand Paying money to a friend or family member Setting up a new account Making a bank transfer Checking usage or submitting usage data for utilities Buying goods Checking usage data for my mobile phone account Communicating with a customer service department Responding to a promotion or making use of an offer Changing contact details or personal information Entering a competition Signing up to a service or promotion Hard Ease of doing on mobile phone Easy 14 / 21
. 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. 71% of respondents, globally, agree that mobile phones will be more important as a payment method in the future. 15 / 21
On its current trajectory, mobile occupies a tempting combination of loyalty card, cash, research tool, location tracker and credit card. 16 / 21
. 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. The Pace of Change The 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. Adoption Options 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. Opportunity Optimisation Users 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. Simple Mobility Simplicity 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 17 / 21
. fundamental, if security is the source of complexity issues, it is often a necessary price to pay. Smartphone to Smart Services As 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 sophistication. 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. 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. 18 / 21
Consumers will be increasingly influenced by service excellence over technology sophistication. 19 / 21
Appendix Country Breakdown USA USA 1072 EMEA UK 1159 South Africa 638 France 513 Germany 523 Russia 1043 Egypt 500 Saudi Arabia 502 Spain 564 Research Methodology 12,424 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. LATAM Brazil 1012 Mexico 513 Colombia 514 Chile 583 APAC China 1000 India 1050 Japan 651 Australia 587 20 / 21
About Loudhouse As 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. For more information, go to loudhouse.co.uk About SAP As 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. For more information, go to sap.com