A lot of people are excited about mobile travel and in particular mobile payments. They say, "Its the panacea to everything," or "mobile first, it's the only the way to go!"
Hold on a second. Let's first deconstruct some of the assumptions and data before we get too excited about mobile and mobile payments.
I will grant that the world is moving to a mobilized state. There's lots of data around that shift in consumption. But that is not an exclusive prediction, as it's far more nuanced.
The better prediction is that we are moving to add mobile to the work of functions we support and that there is a fair amount of duplication as well as substitution going on. Mobile covers a vast majority of sins. Let's examine some of this.
If we just look at one aspect - there is the mobile web. This comes in different forms – traditional devices (laptops) accessing WiFi, laptops using data sticks (3G and hopefully soon 4G) tablets using WiFi, Tablets using cellular 3G/4G, smart phones using WiFi smartphones using cellular, Mobile hotspots (MiFi) etc etc. It would seem that with mobile sessions are a lot shorter. That would imply that the ability to engage with pure mobile transactions is limited.
If we look at the detail of mobile activity we see that there is a fair amount of extrapolation going on with limited hard data on actual transactions. According to Susquehanna's Brian Norwalk in a recent email to his clients:
"Overall paid click volumes were up 10% in 2Q2013, driven entirely by smartphone clicks (+178%) and tablet clicks (+115%)...with desktop down -7%.
Research firm RKG thinks some of this is device substitution, but a piece is likely incremental, as mobile allows us to search in places we never could before.
This speaks to the importance of Enhanced Campaigns' improving mobile monetization for Google, as we estimate mobile search will drive over 90% of forward search revenue growth."
An alternative perspective
I would posit a slightly different view. People are using multiple devices and clicking in multiple systems some of them at the same time. Thus there is not only device substitution but device-driven duplication.
Further, one unseen trend is that Mobile requires more clicks due to the real estate issue with the screen. This is less of an issue with tablets but that is pure substitution, as tablets use mobile web as frequently as apps. Brian is one of the better analysts in the world of Internet and Technology and I read his work whenever I can.
To back up what I believe is happening – we at T2Impact recently undertook a study that revealed some interesting data points.
When actual mobile completed reservation transactions were measured we found there was a fair amount of information inflation. Pure Mobile Travel Transactions are actually quite low. Airline ticket sales are growing but from a small base. The largest user we could find was claiming 6% whole (i.e. Completed) mobile transaction sales.
When it was possible to identify them, the numbers on pure mobile cellular data was a lot lower.
We found that a considerable number of transactions classified as mobile were occurring in a safe place (for example, in the home or office environment) using tablets. So the assumption of mobile being "out of home on a smart phone device via cellular networks" is generally not holding up. Indeed, at least one airline we looked at in detail showed that the growth trends leveled out fairly quickly. This means that there was a spurt of growth and then it hit a plateau.
Let me turn now to Mobile payments. This has been a lot of hype here. Apple's Passbook has signed up a lot of airlines, with currently 36 airlines and growing. Google Wallet is likely to capture a lot of share. But the investor community is getting rather nervous about this and has pulled back considerably from investments.
Check out these numbers on mobile payments industry funding:
What can we learn from all of this?
I would advise that people be cautious before committing large resources to mobile. It has unfortunately become the price of entry into the game. So spend your money wisely. I have and continue to advise our clients that they must have a presence in mobile and to experiment – and then do it again. Be prepare to iterate fast. Mobile is a fast changing field.
Consider the impact of a multi-screen BYOD world, as this is causing strains through out the system particularly in hotels. Do your homework… it is important that you understand what services are suitable for mobile. A complex Round The World Itinerary via mobile is hardly going to set the world on fire – sometimes just because its cool to do something doesn't mean you should do it!
Other tips:
- Mobile User Experience is different. Take the time to design well.
- Don't rely on survey data. Consumers lie. I have taken to discounting any form of consumer data drawn from surveys.
- If you are in an emerging market such as Africa consider the issue of payments via alternative sources – e.g. Physical points of presence. Supermarkets for example.
- Check the end-to-end application requirements. Don't do things in half measure. I have seen costs per transaction skyrocket because the mobile applications and mobile web solutions generated large amount of calls to the support desk.
And finally: be prepared to be disappointed.
Just because the CEO came in, stamped his foot and said you had to be in mobile, that doesn't mean its a money spinner. Avoid letting your technology team spend too much time playing with mobile gadgets. Oh and one more thing. Check out some data on what people actually do with their mobile devices. Yup its games, and communications.
NB: Mobile payment image courtesy Shutterstock.