Tag Archives: digital mobile consumer

The New Digital Mobile Consumer: Topics

Welcome to The New Digital Mobile Consumer.
An overview of the topics discussed in the TCS Global Trend Study – September 2012:

The CEO’s Point of View for TCS Digital Mobile Consumer Study

Introduction and Key Findings

Findings: All Regions
Comparing Results Across the Four Regions

Findings: North America

Findings: Europe

Findings: Asia-Pacific

Findings: Latin America

Findings: Global Industries

Case Studies
Case Studies in Pioneering Mobility Initiatives

Implications and Recommendations

Demographics and Research Approach

Download the Report and Infographic

TCS Digital Mobile Consumer Report

            Infographic: Responding To The Digital Mobile Consumer                    Infographic: Engaging Digital Mobile Consumers

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                       Infographic: Responding »       Infographic: Engaging »

CEO’s Point of View: It’s Time to Empower the Digital Mobile Consumer

N Chandrasekaran
CEO and Managing Director, Tata Consultancy Services


When the internet became popular and reached critical mass, zeitgeists of the time were quick to dub it as the era of “anytime, anywhere” communication – as long as your were tethered to your desk and PC! 

Maybe they were just a decade too early. Because it is only after the advent of the new generation of telecom networks and smart handheld devices over the past 18 months, have we truly seen the “anytime, anywhere” paradigm come to life. 

In our work with global corporations, we have seen the trend towards Wireless intensify: major companies are scrambling to respond to their customers and consumers who want to be able to transact or do business with them anytime, anywhere using their smart devices. Companies realise that they need to offer customer service anytime and anywhere consumers want it. And smart devices are becoming the new battleground for attracting and retaining the most profitable consumer segments. 

So are you ready to do business with these “digital mobile consumers?” How much do you interact and transact with the 50% of U.S. adults who have smartphones, a percentage that is even higher in other countries? That was the fundamental question behind our latest major research study. We wanted to know whether and how Global 2000 companies are responding to shoppers who increasingly use their mobile phones and tablet devices to research, buy, get help, and renew their purchases. What are large organizations doing to deal with this fast-emerging and potent economic force – the person who today carries the Internet in his pocket? 

The short answer is a “great deal,” perhaps even more than you may realize as you read the pages of this report. This summer we surveyed 664 executives and managers at mostly major companies in North America, Europe, Asia-Pacific and Latin America. We also talked in-depth to executives spearheading mobility initiatives at eight leading companies: two large airlines; a big entertainment company; a major cable, wireless and phone provider; a global tire manufacturer; a producer of building materials; a big health care system; and a major retailer. 

Numerous insights can be found in this report. The first one is about the high attention companies are paying to the digital mobile consumer, measured in spending. The average-size company in the four regions ($11.2 billion in annual revenue) will spend between $13 million and $22 million this year to market, sell and service these consumers through their mobile devices. By 2015, they expect that spending to be between $22 million and $26 million annually.


What Companies Will Spend on Technologies and Services
to Respond to Digital Mobile Consumers ($ Million)

Chart: What Companies Will Spend on Technologies and Services to Respond to Digital Mobile Consumers ($ Million)


The study also revealed that companies are making substantial changes in the way they do business to win over this digital mobile consumer. Many companies are not only investing heavily; they are also fundamentally changing the way they do marketing campaigns, sell their products, and handle post-sale customer inquiries—all to win the loyalty of these consumers. Over half the companies have made the digital mobile consumer its own market segment. A good portion of these firms are also creating new products and services to please the market: consumers who are often “in motion,” meaning outside of home and office, when they do their shopping homework, make their purchases, use the products, and need help with them. 

So where is all the action? Which consumer industries are gearing up faster to do business? Of the industries we surveyed, the sectors whose consumers used mobile devices more often to purchase their products, get after-sale service and read their marketing messages were the airlines, energy and telecommunications companies. 

Many companies were generating big benefits from their skillful interactions with digital mobile consumers. Those benefits included:

  • Higher revenue through more accurate and attractive pricing: A major U.S. auto insurer has been placing a digital device in the cars of willing customers to better understand their driving habits. Those who prove to be better risks than the company originally estimated can get lower premiums. The company predicts the initiative could generate a $100 million increase in lifetime premiums per annum.
  • Increasing customer counts by speeding the purchases. Coffeehouse giant Starbucks in the 14 months ending this May conducted 45 million mobile payment transactions through store scanners, with consumers using their smartphones. The $11 billion company also used mobile technology to make its vaunted store experience even more intellectually stimulating. Through free Wi-Fi, Starbucks provides access to premium news, music and other online content. Same-store sales rose 8% in 2011. We sense there may be a connection.
  • Treating customers after the sale like they’re special, even if there are hundreds to deal with at the same time. A major European airline has given its cabin crew members tablet computers that keep track of the personal preferences and flight connections of frequent passengers. The early signs are that the passengers love the added personal touch, and so does the crew. Customer satisfaction scores are already growing.
  • Helping customers in emergencies. Several auto insurers, health insurers and even industrial companies (a tire manufacturer) are using mobile apps and websites optimized for mobile devices to help consumers in a bind. The health insurers (which include Humana and Aetna) have popular mobile apps that help people in unfamiliar places to quickly find medical specialists in emergencies. Several auto insurers (including State Farm) have highly popular mobile apps that help consumers deal with accidents – take pictures, push buttons for help, and file claims. A global tire manufacturer’s mobile website not only helps drivers select the right tire, it enables customers with flats to get road assistance.
  • Not letting customers miss out by being out. A major entertainment company’s highly popular mobile application (2 million+ downloads and registrations) is reducing the number of sales that never happen because customers didn’t realize the product was available. Customers now get emails and text messages to remind them of purchases they are likely to make. The mobile channel is starting to become a noticeable sales channel.

The most aggressive companies are not limiting their mobility strategies to just smartphones and tablet computers. Health insurers, auto insurers and other companies are looking at other mobile devices, especially technology that could monitor consumer behavior and usage of their products.

The examples we uncovered in our research also tell us that leading companies are looking at how mobile technology can improve the entire experience that consumers have with them – not just the purchase transaction. These firms are starting to transform the way consumers research, buy, use and troubleshoot their products and services when they are on the go.

With the spoils going to the innovators, the race to empower the digital mobile consumer has just begun.

The Next Phase in Mobility: What Consumer Companies Should Consider

We see six essential elements for determining and executing a superior consumer mobility strategy:

  • Consider the digital mobile consumer as a new customer segment – one that may very well require new products or services, and (for sure) new ways of TCS Digital Mobile Consumer Studymarketing, selling to them, and serving them after the sale. About three times the number of “leaders” in our survey (82%) said they made the digital mobile consumer a unique market segment than did laggards (only 28%). And many more leaders (85%) created a new product/service offering for this segment than did laggards (30%). Even after segmenting consumers by which ones use mobile devices, you may find that some are far bigger users of the devices than others. 
  • Segment consumers not just on their value but also on the extent to which they are “in motion” and need different product features in each step of their consumption process. Progressive sends weather alerts to drivers to warn them of bad weather ahead – a mobile feature that will help consumers avoid accidents. Geisinger and Humana’s mobile apps or mobile websites remind patients of important medical appointments and prescriptions they need to refill. And during medical emergencies, the mobile apps of Humana and Aetna direct a consumer to quickly find the right medical specialists and facilities. In these situations, the consumer’s need is indeed urgent, and if they’re “in motion” (meaning in an unfamiliar part of the country or state) the importance of such mobile apps becomes even greater.
  • Look broadly at mobile technology – not just at today’s popular smartphones and tablet devices. In addition to developing mobile apps for consumer’s mobile devices, auto insurance companies are experimenting with mobile instrumentation that they can install in your car. Other industries are following suit – particularly those that stand to gain substantially by tracking the way a consumer uses its product or service (a goal of health insurers).
  • Determine what data and analysis of that data is required to provide a superior consumer experience. Starbucks has a grand vision for how mobile technology and “big data” can reshape the coffee shop experience – that is, how by knowing the reading, music, food and other habits of the patrons of each store, it can tailor the offering to suit those interests. One of the biggest differences between leading and lagging companies in our survey was in how they use consumer and other data to tailor their responses to them (see Exhibit IX-5). Leaders were more than four times as likely as laggards to send promotional offers to consumers’ mobile devices based on where they were geographically located in their shopping process (i.e., their proximity to their stores); more than five times as likely to use real-time GIS and consumer data to interact with consumers; and more than three times as likely to change pricing for consumers who were “in motion” and shopping.

 Exhibit IX-5: Q17 d,e,f,g,h/Leaders and Laggards:
Comparing Them on They Way They Market to the Digital Mobile Consumer

Exhibit IX-5: Q17 d, e, f, g, h/Leaders and Laggards: Comparing Them on The Way They Market to the Digital Mobile Consumer

  • Tailor mobile consumer experiences to the type of device (e.g., smartphones or tablets). This is especially important for companies whose consumers are more likely to be “in motion” when they use mobile apps or mobile-optimized websites. Nielsen’s research in 2012 found that consumers use smartphones and tablet devices differently in some ways. In the U.S., smartphone users were much more likely to use those devices while they were “on-the-go,” as Nielsen put it – e.g., to locate a store (73% of smartphone users do this vs. 42% of tablet users), use a shopping list while shopping (42% for smartphones vs. 16% for tablets), and redeem a mobile coupon (36% smartphones vs. 11% tablets.)26 In our survey, the leading companies were more likely to tailor their mobile apps to tablets or smartphones than were the laggards: 25% of leaders’ mobile apps were developed just to run on tablets vs. only 17% for the laggards. And by 2015, leaders project that 23% of their mobile apps will be designed exclusively for tablets vs. 16% for laggards.
  • Experiment quickly, but be prepared to make major changes in products and consumer-facing processes eventually. Companies such as State Farm, Humana, Progressive and Starbucks appear to have started their initiatives by putting themselves in their customers’ shoes, and working back from that – rather than essentially trying to retrofit the way they operate today and miniaturize it for a mobile device. Starbucks, for one, is rethinking the whole store experience for consumers given that it can get a strong sense of what visitors want to read and listen to while they’re sipping their Caffe Mochas. Even the global tire maker that we spoke to has found that responding to mobile consumers is changing its view on its role in the consumer purchasing process. (See Exhibits IX-5 and IX-6.)

Exhibit IX-5: Q9/Leaders and Laggards: Degree of change in products and
processes TO DATE to respond to digital mobile consumers

Exhibit IX-5: Q9/Leaders And Laggards: Degree Of Change In Products And Processes To Date To Respond To Digital Mobile Consumers


Exhibit IX-6
: Q10/Leaders and Laggards: Degree of change in products and
processes companies will have to make by 2015 to respond to digital mobile consumers

Exhibit IX-6: Q10/Leaders And Laggards: Degree Of Change In Products And Processes Companies Will Have To Make By 2015 To Respond To Digital Mobile Consumers

 


The opportunities from responding effectively to consumers who increasingly use powerful mobile devices to research, buy and use their products are substantial for many industries. But the learning curve is also substantial, which is why waiting to see what shakes out can be a mistake.


26 Nielsen article.

 

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Who Will Win the War? Not Necessarily the Companies That Spend the Most

TCS Digital Mobile Consumer StudyThese and many other mobile initiatives to date will eventually show what “sticks” and what doesn’t. We believe every consumer company has an opportunity to generate more business with consumers and increase their loyalty through mobile technologies and new ways of doing business with them. That is, we see enormous opportunities for companies to follow consumers – even if they number in the millions — to use mobile technology and mobile-friendly ways of conducting business and reap substantial benefits. However, the value of the mobile initiative must be compelling enough to convince consumers to “follow” these companies back through their mobile devices – to want to download and use a company’s mobile apps, to want to search on and deploy its mobile websites.

In this way, one can imagine that simply spending heavily on mobility initiatives is no guarantee of success. From our survey, the biggest spenders on initiatives aimed at digital mobile consumers were not at all the most successful ones. How do we know?

We grouped the 664 survey respondents into two categories based on how they answered one of our questions: “Compared to your biggest competitors, how would you rate your firm’s success at addressing consumers who interact with your organization through digital mobile devices?” We provided a seven-point scale – from a 1 (“far behind”) and a 2 (“behind”) to a 4 (“neither ahead nor behind”) and a 6 (“ahead”) and 7 (“far ahead”). There was barely any difference between “leaders” (answering with a 6 or 7) and “laggards” (answering with a 1 or 2) in their 2012 spending on initiatives to win over the digital mobile consumer (technology, consulting, IT services, etc.). (See Exhibit IX-4.)


 Exhibit IX-4: Q16/Global: What Companies Will Spend in 2012 and 2015 on
Technologies and Services to Respond to Digital Mobile Consumers
(in US$ Millions, Adjusted for Average Revenue/Company)

Exhibit IX-4: Q16/Global: What Companies Will Spend in 2012 and 2015 on Technologies and Services to Respond to Digital Mobile Consumers (in US$ Millions, Adjusted for Average Revenue/Company)


The ratio of mobile consumer spending as a percent of company revenue was virtually the same for “leaders” and “laggards.” And this was the case for both questions on investments – for this year and their projection for 2015. What that tells us is that being successful in this arena requires spending on the right mobile capabilities for consumers – not spending more than the competition.

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Which Industries Have Some of the Biggest Mobile Opportunities?

Our interviews with digital, marketing and mobile executives in the media and entertainment, insurance, industrial manufacturing and other industries, we heard of enterprising initiatives that have already commanded significant consumer adoption and endorsement.

In analyzing what we heard in those interviews, we categorized what they were doing in their consumer mobile initiatives in two ways:

  • The importance of the product to consumersThe benefits the product provides in financial, health, safety, convenience and other areas, as well as the urgency with which a consumer needs to obtain those benefits.
  • The extent to which the consumer is “in motion” when she needs to consume that productall the steps from researching and making the purchase to using the product, getting it repaired when it “breaks” and renewing it.

TCS Digital Mobile Consumer StudyOur hypothesis is this: Companies that are getting greater traction with their mobile consumer initiatives are those with consumers who a) get higher financial, health, convenience and other benefits from using the product, and have a greater urgency to buy and use it, and b) are more likely to be “in motion” when they research, buy and use the product. By motion, we mean “out and about” – not close to home or office, and thus with a greater need for a mobile device (See Exhibit IX-2).

 

 


Exhibit IX-2: Which industries have the greatest opportunities
in pursuing the digital mobile consumer?

Exhibit IX-2: Which industries have the greatest opportunities in pursuing the digital mobile consumer?

The rapid consumer uptake of mobile apps and websites from the global tire company and Humana can be seen this way: Their products are of very high importance and urgency to consumers, and those consumers are often “in motion” when they need to purchase and use the products.” Health insurers such as Humana and Aetna are getting consumers with mobile devices to rapidly adopt mobile apps that can locate a medical specialist and hospital, clinic or pharmacy in a medical emergency. When consumers are in unfamiliar locales (on vacation, on business, etc.), these mobile apps become particularly attractive to consumers, especially those with life-threatening medical conditions.

It may appear that other industries – such as car insurance, banking, industrial manufacturing and food and beverage – sell products that are less critical to the financial, health and emotional well-being of consumers. It may also seem that those consumers don’t have the same degree of need to research, purchase, use and maintain those products when they are “in motion.” But upon further investigation, that would be misleading. Consider the auto insurance industry. Companies like State Farm and Progressive Insurance have found consumers to be embracing their mobile apps for dealing with car accidents (insurance becomes a critical product at that moment for a consumer, and he is typically “in motion” when he needs to file the accident report).

The more value that a company can provide to a digital mobile consumer, the more likely it will get that consumer to do business with it through a mobile device. So what can companies do to increase the value they can provide the digital mobile consumer? One way to think about this is through the lens of the consumer’s entire consumption experience with a product. Every consumer can be seen as going through five steps in the purchase and use of any product (see Exhibit IX-3).


Exhibit IX-3: Additional Examples Of Companies That Have Used
Mobile Technology To Improve The Consumer Experience

Exhibit IX-3: Additional Examples Of Companies That Have Usd Mobile Technology To Improve The Consumer Experience


  • Research: Looking for options, comparing them on price, features, functions, etc.; determining the best fit product (greater likelihood to be on the road when trying to determine needs and companies and channels that can fill those needs)
  • Buy: Making the purchase; doing the financial transaction
  • Use: Making productive use of the product/service after the sale
  • Maintain: Fixing the product/service when it’s not working
  • Renew: Making it easy to reorder the product

From our interviews and secondary research, we have found examples of ways to improve the life of a digital mobile consumer in all five steps, and across industries.

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Mobile Technology Lets Consumer Companies Follow Their Customers Wherever They Go

TCS Digital Mobile Consumer StudyWith each passing day, consumer companies have a greater ability to do business around the clock with more and more of their consumers in every way because of the huge uptake in mobile devices. Companies whose consumers have feature phones, smartphones, tablets and other mobile devices can continuously market and sell to consumers, serve them after the sale, help them research their purchases before they buy, and renew their purchases.

In other words, if they can reshape the way they do business in the ways that digital mobile consumers want to do business with them, companies will have unprecedented opportunities to attract and keep them as customers. The breathtaking adoption of mobile devices is making this opportunity real. Consider how rapidly consumers are becoming wedded to smartphones. In March 2012, about half of U.S. consumers (50.4%) had smartphones, up a remarkable 10 percentage points from the previous 12 months, according to consumer market researcher Nielsen Co. The average consumer downloaded 41 mobile apps (vs. 32 in 2011), and spent 39 minutes a day using the phone.19 And about half of American smartphone owners (47%) – 45 million people in all — were shopping on shopping apps by June 2012.

In many Asia-Pacific countries, the majority of online adults in April 2012 had smartphones: China (66%), Australia (65%), and South Korea (67%), to name a few countries.20 Smartphone adoption in Japan and India has lagged. In Japan, 26% of mobile phones are smartphones (vs. 74% for feature phones); in India, the percentages are 10% smartphones to 90% feature phones, according to Nielsen data.21 But that doesn’t mean that consumers in these countries are shunning the Internet from their mobile devices. In fact, 86% of Japanese consumers accessed the Internet from their mobile device in June. In China, the number of people who access the Internet from a mobile device – 388 million in August 2012 – for the first time surpassed the number who had accessed the Web from a desktop computer.22

The result today is that some companies now have millions of consumers who are tracking them through mobile devices. 

So what’s been the impact for these companies? What kinds of returns are they getting, given the average company that we surveyed ($10 billion in annual revenue) will spend $17 million this year to respond to the digital mobile consumer? For some companies, the results have been eye-opening:

  • Increasing revenue by pricing more accurately: Auto insurer Progressive Insurance predicts it could generate a $100 million increase in lifetime premiums per annum through an initiative called Snapshot, which places a mobile device in customers’ cars and tracks their driving habits. (Those who are better drivers than Progressive had predicted can save money on their policies. Usage of the device is totally at the customer’s discretion.).23
  • Pleasing impatient consumers by speeding their purchases. Starbucks, which has grown into an $11 billion company over 41 years due to delivering what it refers to as “The Starbucks Experience” at its 17,000+ coffee houses, has been a retail pioneer of mobile payments. In the 14 months that ended in May 2012, the company had 45 million payment transactions that were scanned through its customers’ mobile devices.24 That no doubt helped the company boost same-store sales in 2011 by 8%.
  • Helping consumers research their purchases. A growing number of entertainment companies provide mobile users with lots of information to help them decide what to purchase.
  • Marketing and selling more effectively by reminding busy consumers of time-sensitive purchases. Geisinger Health System will soon remind patients with high cholesterol to refill their prescriptions.
  • Providing a highly differentiated consumer experience in the usage of a product. Mobile apps help health insurers such as Humana give consumers a tool to improve their health and in emergencies quickly find the medical specialists they may need. Starbucks’ offers store visitors free wi-fi and free news and music content through its Starbucks Digital Network. That helps the company stay current on the interests of its customers. As Adam Brotman, Starbucks’ chief digital officer, told one reporter, “Digital has to help our store partners and help [us] tell our story, build our brand, and have a relationship with our customers.”25
  • Providing superior assistance when the customer needs help. The mobile apps and websites of auto insurance companies such as State Farm and Progressive enable consumers to deal with accidents quickly and effectively – from being able to photograph the damage from their smartphones to calling a tow truck and booking a replacement vehicle.

19 Nielsen.
20 Nielsen data.
21 Nielsen data on smartphone usage in Asia-Pacific.
22 According to data from CNNIC.
23 Progressive estimated this $100 million increase in lifetime premiums per annum in a June 12, 2012 shareholder/analyst call, based on a full rollout of the service in all the U.S. states in which it does business. As of the time of the call, the service had been available in only a handful of states. Read the transcript.
24 Forbes.com interview with Starbucks chief marketing officer, Adam BrotmanMay 24, 2012.
25 Venture Beat, June 12, 2012.

 

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Why Spending Wisely But Opportunistically is the Best Path

Key findings:

  • The benefits of winning over digital mobile consumers may be greater in some other sectors. In analyzing our qualitative research (case studies and literature searches), it became clear to us that many companies which sell products/services of high relative importance and urgency for consumers – and whose consumers were more likely to be “in motion” when they researched, purchased and used the product/service – had achieved major benefits from and consumer interest in their mobility initiatives.
  • Companies that win over the digital mobile consumer will not necessarily be the ones that spend the most in this area. The “leaders” from the survey are spending about the same percent of company revenue on their mobility initiatives as the laggards.


TCS Digital Mobile Consumer StudyThe data that we present in this report illustrates how companies across industries and across regions of the world have begun to change to respond to the so-called digital mobile consumer. In our interviews, we found that executives of companies that are leading the way don’t look at this consumer segment as a burden. Rather, they appear to see them as a great opportunity – a rapidly expanding market segment that will give their business to companies that can reduce the many hassles of their time-starved lives.

In viewing the digital mobile consumer segment as a substantial business opportunity, many (although certainly not all) of the organizations we studied already have instituted substantial changes in the ways they market, sell, service, develop products, and work with suppliers. For example, for drivers who use the mobile website of the global tire manufacturer that we interviewed, it’s no longer an ordeal to find someone to fix a flat tire when their car has broken down in an unfamiliar place.

Providing these types of valuable customer experiences – experiences that increase customer loyalty — has been the mantra of consumer companies for years. The enormous investments these companies have made over the last decade in websites and customer relationship management (CRM) software speaks to this need. Consider what websites have done for consumer companies since they emerged in the mid-1990s. (Amazon.com was born on the Web in 1995.) Through their websites, consumers have been given an around-the-clock channel for getting information on products and services, and for some sites the ability to purchase those offerings. These websites have empowered consumers – i.e., those who could access them from computers with Internet connections.

Also consider that the amount companies are spending on CRM alone is staggering. Gartner estimates that companies worldwide this year will collectively spend more than $12 billion on CRM software, up 33% from 2008.16 Consumer companies have used CRM so that their marketing departments can tailor direct marketing campaigns, telesales people can prospect for the best customers, and call center agents can have a better picture of the irate consumer on the other end of the phone line.

Yet CRM technology allowed consumer companies to get only so close to their customers. For most of the last decade, those customers would receive the sales call on a home phone, get the direct marketing pitch in the postal mail, and call a contact center from a phone that could do little more than dial a number. For most of the 2000s, if consumers had a mobile phone, that device probably didn’t have a web browser. And if it did, the websites that consumers viewed were almost never designed with a tiny screen and a time-starved viewer in mind.

Companies that wanted to lather personal attention on each and every consumer – or at least the minority of the customer base who represented the majority of revenue – could only go so far. They couldn’t give consumers who were on the run access to their online repository of self-help information. When the consumer was in motion – with her desktop or laptop computer long out of reach – she was essentially on her own.

In other words, consumer companies have been able to get only so close to the people who buy their products and services, whether they are airline passengers, bank checking and savings account holders, or drivers with tires and auto insurance policies to care about. This is one big reason why consumers who are “out and about” have not been able to get close to those companies in any meaningful way.

Perhaps this is one reason why the bellwether index of the US consumer satisfaction of companies they do business with has barely budged since 1994. The American Customer Satisfaction Index, which registered 74.2 at the end of 1994 (on a scale of 0 to 100), stood at only 75.9 in the second quarter of 2012 – a scant 1.7% increase over 18 years.17

This is all to say that websites and CRM technology have helped companies get a lot closer to their consumers – but only so close. They haven’t been able to stay electronically connected to consumers at all times. But with a wave of powerful and easy-to-use mobile devices that have flooded the market since 2007, this is no longer the case.18 A consumer with a smartphone or tablet device can now easily get the information she needs from just about wherever she happens to be (that is, wherever wireless service exists, especially wi-fi).

Now companies can electronically connect their businesses to consumers (even if they have millions of them) around the clock and around the world – if those consumers have powerful mobile devices. Increasingly, they do.

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16 From Gartner press releases dated Feb. 8, 2011 and Feb. 26, 2009.
17 The ASCI index has been a strongly watched number for many years. The organization, whose index was developed at the University of Michigan’s Ross School of Business, polls consumers on their satisfaction with the companies whose products and services they purchase, ranging from airlines and retailers, to computers, media and banks. See the trends since the organization began tracking consumer satisfaction in 1994.
18 Most mobile industry observers would assign the “easy to use” bragging rights to Apple and its iPhone, the first of which came to market in June 2007.

 

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Spending on the Digital Mobile Consumer: Energy, Telecommunications and Airline Companies Spend the Most

Who has the bragging rights for spending the most on technologies and services to respond to the digital mobile consumer? Which industries are investing the greatest amounts? Energy, telecommunications, and airlines are at the top of the chart, spending an average $27 million to $31 million per company on consumer mobility annually. (See Exhibit VII-9.)


Exhibit VII-9: Q16/Global Industries: Average Company Spending in 2012 on
Technologies and Services to Respond to the Digital Mobile Consumer (in US $ Millions)

Exhibit VII-9: Q16/Global Industries: Average Company Spending in 2012 on Technologies and Services to Respond to the Digital Mobile Consumer (in US $ Millions)


Two industries are at the bottom of the chart: transportation services/logistics and food and beverage manufacturing. Notably, retailers’ spending is less than the cross-industry average — $13 million vs. $17 million per company.

But what about future spending? (See Exhibit VII-10.) By 2015, the industries whose projections would put them in the lead are:

  • Airlines ($37 million per company in 2015)
  • Telecommunications ($35 million)
  • Computer ($34 million)

Exhibit VII-10: Q16a/Global Industries: Average Company Spending Projected for 2015 on
Technologies and Services to Respond to the Digital Mobile Consumer (in US $ Millions)

Exhibit VII-10: Q16a/Global Industries: Average Company Spending Projected for 2015 on Technologies and Services to Respond to the Digital Mobile Consumer (in US $ Millions)


At the bottom: food and beverage ($10 million), transportation services ($11 million), and media and entertainment ($12 million).

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Findings: Global Industries
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Latin America: Degree of Product and Process Change: Strong and Increasing

The 90 Latin American organizations that we surveyed (from Brazil, Mexico and Argentina) indicated that they have already made substantial changes in consumer-facing and supplier processes, as well as their products and services on behalf of consumers who use mobile devices to do business with them.

On our scale of 1-7, the Latin American survey respondents measured the degree of change in their products and processes as nearly a 5 – a higher average score than those in the other three regions of the world. And in asking Latin American companies to gauge the amount of change in these areas by 2015, they indicated greater than 5 scores on all five measures. (See Exhibit VI-1.)


Exhibit VI-1: Q9+10/Latin America: Degree to Which Companies Have Made
and Will Make Changes to Respond to Digital Mobile Consumers
(Scale of 1-7, 1=none, 4=moderate, 7=very high)

Exhibit VI-1: Q9+10/Latin America: Degree to Which Companies Have Made and Will Make Changes to Respond to Digital Mobile Consumers (Scale of 1-7, 1=none, 4=moderate, 7=very high)


These measures of product and process change were even more pronounced by industry sector. Among our 90 Latin American respondents, we received sufficient samples in four industries: retail, banking/financial services/insurance, pharmaceuticals, and consumer products manufacturing (food, beverages and durables).

The retailers we surveyed indicated the largest degree of change in product and process to appeal to mobile consumers: 5.62 on this 1-7 scale (Exhibit VI-2). In comparison, consumer product companies gave an average score of 4.40 on product and process changes – a number that was below the average for all 90 companies (4.95).


Exhibit VI-2: Q9, 1-5/Latin America: Comparing Industries in Degree of Change in Products and Processes to Date to Respond to Digital Mobile Consumers
(Scale of 1-7, 1=no change, 7=very high change)

Exhibit VI-2: Q9, 1-5/Latin America: Comparing Industries in Degree of Change in Products and Processes to Date to Respond to Digital Mobile Consumers (Scale of 1-7, 1=no change, 7=very high change)


However, when asked about the degree of change in these five dimensions that they expected to make by 2015, the consumer products companies indicated they would move much more quickly. They projected their average degree of product and process change to appeal to digital mobile consumers at 5.54 on this 1-7 scale, second only to the degree of change that the retailers projected (5.80). (See Exhibit VI-3.)


Exhibit VI-3: Q10, 1- 5/Latin America: Comparing Industries in Degree of Change in Products and Procsses expected by 2015 to Respond to Digital Mobile Consumers
(Scale of 1-7, 1=no change, 7=very high change)

Exhibit VI-3: Q10, 1- 5/Latin America: Comparing Industries in Degree of Change in Products and Procsses expected by 2015 to Respond to Digital Mobile Consumers (Scale of 1-7, 1=no change, 7=very high change)


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Findings: Latin America
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