The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Understanding shoppers' mobile context is critical to success in mobile commerce.
Companies are contending with a new world of mobile popularity. Consumers are buying smartphones at an accelerating pace and using them for more diverse activities, such as consuming media, doing their taxes and shopping. Mobile is revolutionizing the way consumers learn about, choose, and buy products of all types—by the end of 2011 Forrester is forecasting U.S. consumers will spend more than $6 billion on their mobile phones. But with this burgeoning popularity, firms are struggling to keep up, as small screens and limited input options inhibit the design and delivery of excellent mobile experiences.
So what's the secret to creating and delivering excellent mobile products that consumers will embrace? The answer is consumer convenience. Consumers will embrace new products and services if they are fundamentally more convenient—that is to say, if the benefits outweigh the inhibitors to adoption and usage.
Think of it this way: Why do you use the remote to change the channel on your TV? An airplane to fly across the country? A microwave to heat up food? Because it is convenient. In mobile, convenience will come in the form of services that offer immediacy and simplicity through a highly contextual experience. This means delivering mobile services or content when consumers need it the most, ensuring services are easy to use, and making sure the content is relevant to the individual.
Why context matters
Forrester defines context as the sum total of everything your consumer has shared with you to date as well as what he or she is experiencing at the moment of engagement.
What exactly do I mean by context? Today, context primarily involves the use of information about the consumer, such as location, time of day, or past behavior, to personalize or tailor experiences to minimize steps and manual entries. For instance, Amazon.com allows consumers to opt in to categories of daily deals.
Companies will need to anticipate what their customers want to happen when they launch an app or mobile web site, and, to do so, they must consider their consumers':
- Situation: the current location, altitude, environmental conditions, and speed the customer is experiencing. As navigation is three-dimensional and involves direction, these specifics will help create a truly tailored experience. For instance, knowing a customer's altitude can help identify what floor he's on in a hotel or mall.
- Preferences: the history and personal decisions the customer has shared with you or with his social networks.
- Attitudes: the feelings or emotions implied by the customer's actions and logistics.
For many, the use of context in the delivery of mobile services is not yet in play. Beyond using GPS for location-based context to help consumers find the nearest ÒxÓ (ATM, gas station, store), most simply lack the staff expertise or do not view mobile context strategy as a top priority.
But by integrating location into the research purchase processes, some e-business professionals are making sophisticated use of context. For instance, in retail, companies are pushing alerts and offers based on location through geo-fencing technologies (that is, to within a specific geographic area). However, few leverage location beyond guiding consumers to their bricks-and-mortar stores, and even this still poses a challenge.
But over the next several years, contextual information is going to get a lot richer as mobile devices grow in popularity. This combination means organizations must develop a mobile context strategy if they expect to build consumer loyalty and remain competitive. Building highly contextual experiences will be a journey, as organizations evolve their expertise. This development can be mastered throughout four phases of contextual evolution:
Phase 1: Mastering the basics. Although the simplest way to maximize context, less than half of professionals recently interviewed by Forrester say they're using location, time of day, and past behavior or preferences when delivering mobile services. But access to this type of information is straightforward on smartphones (with the user's permission) and should be the first tool to leverage when moving toward the use of context for improved experiences.
Phase 2: Layering in intelligence. The most sophisticated firms already can determine if a customer is in their store, in a competitor's store, or at the customer's home. But reaching this phase requires creating new back-end data and logic, without encroaching on a consumer's sense of privacy. For example, if a firm offers variable or regional pricing, as a number of retail and grocery chains do, what price does it present to a customer in the store versus a web shopper who may just be considering a purchase? Mastering this stage will only be feasible with significant collaboration with I.T. counterparts.
Phase 3: Breaking from PC contexts. The smartphone is not just a mini-PC; it's a personal and intimate device that knows unique attributes of its user. And the merger of the physical and information worlds will take one giant step forward here when new sensor technologies are combined with sophisticated display and video elements. In this phase, the phone becomes an opportunity to deliver entirely new innovative services and products that have the potential to generate revenue. For example, sensors and other advancements will detect smells, enabling a grocery store to demonstrate to mobile shoppers that its produce is ripe. While the mobile device can act like a PC, it has the potential to do much more.
Phase 4: Embracing motion as a control mechanism. Phones today can already be controlled with motion, like Sony Ericsson's motion sensor that lets a user shake the phone to change a music track, or the phone's screen orientation. So what will be different in three to five years? First, the motion-detecting sensors will be on a single chip with a common programming layer that will make them easier to use in applications.
Second, digital experiences will move well beyond the current paradigms of web browsing. Online tasks today are broken down into steps laid out in page sequences, menus, and navigation bars. Consumers will still buy airplane tickets or make payments on their phones, but they'll do so more simply—with tools like voice-based control and authentication.