Two cents blog

Get ready to stockpile. It’s a mobile arms race!

by Steve Mair on 20 February 2015

For those of you who remember anything about the Cold War, the almost half a century arm wrestle between the old Soviet Union and the West, you’d be well aware of the stockpiling of nuclear weapons on both sides. A show of might that meant the world was a ‘slipped finger on a red button’ away from looking very, very different.

Well today, if you’ll indulge me for a moment, imagine we swap out the Cold War for the internet, the belligerents for brands and businesses and the nukes for mobile devices, you’ve got yourself your very own arms race happening right now in 2015. The goal is not to destroy the world, obviously, but transform their brands’ customer experiences and drive business positive outcomes.

Armwrestling

So… we all know that mobile is the future and that access to the web via a smartphone continues to grow exponentially. In 2014 we reached the mobile tipping point. We finally saw access to the web via a smartphone outstrip that of desktop devices. This year smartphone saturation is expected to reach a staggering 42% globally. Not since this wondrous thing called the internet came along, has a technology forced brands to re-think how they engage with their customers.

Whether we are checking the local weather for this afternoon, looking up the details of your next appointment (and how long it’ll take to get there considering current traffic conditions!) or how hard we have worked during the lunchtime gym session, every request we make trains our minds. As a result our mindset shifts from expecting information to demanding it. We give loyalty to the brands or businesses that serve this information to us immediately and contextually.

So it is no longer a case of asking whether reaching your consumers via mobile is important. It’s now a question of understanding how consumers behave when using different types of devices and what their preferences and expectations are. As I mentioned earlier, consumers expect to engage with brands and to access the service or information they require immediately and with context. A report out of the US states that currently 18% of US online consumers have this expectation, while 30% are transitioning towards this mindset.

The importance of a mobile shifted mindset is highlighted by the fact that in the last quarter of 2014, 68 mobile based start-ups were the latest to be valued at a billion dollars or more. These consumer centric brands have been built from the ground up with their users needs, wants and expectations in mind.

Take the taxi industry in Australia. The incumbents have been unable to innovate, their business models have remained rooted in the past, mobile for them is just another channel. Enter Uber, a consumer-focused business that was able to pressure the incumbents by elevating customer expectations. Through innovation they were able to win, serve, and retain customers with their mobile environment. Globally Uber is worth over US$10 billion. Nice. I should have invested…

mobile-internet-billions-valuation-pyramid

So what does it mean?

It means increasingly technologically savvy consumers want the brands they engage with to deliver experiences that mirror their own technological beliefs and expectations. It goes beyond the creation of apps and websites. To continue to be competitive, a wholesale re-engineering of organisations and their processes needs to take place, with mobility as a priority. This has sparked a mobile arms race that is likely to increase exponentially in 2015, as major brands spend tens to hundreds of millions of dollars to allow them to effectively engage on mobile devices and play catch-up with start-ups.

Take Hilton for example, the global hotel chain is rolling out a US$550 million technology upgrade that will allow guests to use their smartphones for check-in and check-out, to choose a room or to unlock their door, all the while collecting valuable information about their guests’ preferences. Or Disney, who are soon to launch MyMagic+ a digital platform that encompasses a website, mobile app, and a digital wristband. The device acts as a room key, credit card, park ticket plus more. Customers can book their entire experience, including dinner reservation and then change them as required in real time via the app.

In my opinion this revolution is underpinned by two things. Data and Delivery. Collecting data from consumers that allows the offering of personalised experiences, exactly when and where they want or need them, on the relevant device.

To help facilitate this mind shift smart marketers will need to move towards focusing on relevant use of first-party data (the data the company or brand already owns about it’s customers), privacy where required (lets not get too creepy!), exploiting analytics and lastly, creating integrated experiences across many devices. This for me is key.

Consumers are spending more time on mobile devices, but in fewer apps. The average consumer uses an average of 24 apps per month, but spends 80% of their time in five. Smart brands have created ecosystems that contain apps but don’t rely solely on them. Google Now, Google’s intelligent personal assistant is a great example. It delivers the right information, through the right platform, just when you need it, from a variety of sources. ESPN uses apps and mobile based services to collect data that forms insights, allowing the brand to better tailor its offering to individual consumers.

As brands, we don’t all have budgets the size of Paris Hilton’s trust fund to undertake change at an organisational wide level. But we can be smarter about how we use the tools at our disposal (and there are many) to understand and engage our consumers at the right moment.

Brands that are able to see the bigger picture, who understand consumer expectations and re-position themselves to tap into these expectations will begin to put clear water between themselves and their competitors who see mobile as just another channel.

Because remember, savvy consumers don’t just expect information. They demand it.

Steve Mair is BCM’s Creative Director – Digital

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