Proof that mobile retail is the next big thing, M&S have announced that their mobile site saw over 1m unique visitors per day in December. Whilst high street retail sales were decimated in the last month of 2010, it looks like those brands with mobile sites were doing very nicely thank you. Sienne Veit, M&S’s head of mobile said: ‘We’re delighted, as this is confirmation that our customers are ready to shop in this way’. Whilst they haven’t released any sales figures the indication is that shoppers are ready to buy through their mobile. Increasingly the mobile site is the one that customers choose to visit at home, using their smartphones in preference to their PCs.
In a very interesting move, Starbucks has introduced a mobile phone payment system to over 6,000 of their US stores. Customers with a Starbucks card can use a mobile app to make a payment on the card. They simply show a barcode at the till and the payment is taken. They can top up their card via PayPal.
With the world of mobile retail hotting up, there will be greater demand from consumers to make payments through their phones. However, there is a battle going on between various providers. In the UK the operators put their energy into PSMS and the web-based system PayForIt. However these payment methods have a limited future. It limits the kinds of things that can be paid for (mobile or web content only) and the high operator charges make it prohibitive for many brands. Looking ahead the future is likely to be in contactless or NFC payments, however outside Japan and Korea it has not taken off yet. Even in NFC there is likely to be a battle between operators, handset manufacturers and credit card companies for control of the channel.
So in the meantime brands are using their own payment methods. The iPhone appstore demonstrated how registered users could quickly make a payment against an existing credit card, which has extended into retail with the likes of Amazon’s one click payment system. Various providers have played with their own mobile payment systems, but few of them had the reach for it to take off. The move by Starbucks is significant though: 20% of their US transactions are made on the card. Given the large number of outlets from Starbucks their mobile payment system has a good chance of taking off.
I’ve previously blogged on the problem with QR codes in the UK and Europe. Essentially the issue is about effort vs reward – most campaigns fail to make enough compelling uses of QR to get people scanning them. Two QR campaigns this week provide yet another example of why QR isn’t working. The Indian airline Jet Airways has launched a campaign which uses QR in their in-flight magazine and on Facebook to provide more information to their customers. There’s nothing wrong with that as an aim, but it would seem that all the QR code does is takes the user to their mobile site. Why bother? For starters if I’m on Facebook I’d rather just click a link to take me to further content, and if I’m reading a magazine I’ll just put the URL or do a search for a mobile site. It’s faster and it works better. Jet Airways are looking to extend the use of the codes to their e-tickets. But again, if it just takes users to their mobile site, what’s the point?
How could Jet Airways use QR in a more compelling way? It would be great if my e-ticket had a personal QR code. Scanning that would show me my flight details and perhaps travel details such as the current traffic status, or trains that arrive at the airport in time for my checkin. Maybe I could scan the code and access my own information? Perhaps I could amend the number of checkin bags, or change my inflight meal? Or maybe I could scan the code to get a voucher for a free coffee at one of the over-priced airport cafes? That’s the great thing about QR, it can contain up to 700 words in one little 25mm code. And they can be personalised.
Another campaign that popped up was a trailer for the film The Mechanic. It’s vaguely intriguing. A minute into the film a QR code briefly pops up. If you manage to stop the trailer at the right point and scan the code (not easy), it takes you to another video. Unfortunately I can’t tell you what that video is, because it didn’t work on an iPhone. Nor an Android phone. There’s nothing worse than poor user experience to drive people away from mobile campaigns.
Ultimately the problem with these campaigns is that they will actually increase the likely hood that people won’t use QR codes. All they will do is reinforce the idea that QR is pointless and it doesn’t work. Now is the time for brands to use QR in an exciting, compelling way.
T-Mobile UK has announced that it will restrict mobile data usage as from 1st Feb. In a strange twist, the restriction applies to watching videos, downloading content and playing games once the usage goes over 500meg. In these days, half a gig isn’t much to use in a month. As with O2, it is probably only a few percent of people who spend their time watching videos, but nonetheless the content restrictions will be likely to anoy their customers. I wrote in my mobile predictions for 2011 that data limits would be applied across most operators – looks like it’s happening already.
UPDATE: With a great deal of confusion over the T-mobile data restrictions, The Guardian spoke to them to attempt more clarification. It seems that it’s illegal to restrict those on existing contracts, so the new data regime only applies to new or renewing customers. According to the interview once you hit your 500 meg limit, you get a restricted service. You can’t get streaming content such as YouTube, but you can browse websites. You can get emails but you can’t download attatchments. Unlike other network providers the one advantage with T-Mobile is that you will not be charged extra for going over your limit, but just restricted. In the UK Three are now the only network provider (outside of MVNOs) to offer unlimited data to their customers.
Update: for examples of good and bad use of QR in advertising see:
QR Success and
See new article, How to Make QR Codes Work in Advertising
Whilst writing an article about using 2d or QR codes in direct mail, I started to think about why they haven’t really taken off. OK, in Japan everything has a QR code on it, from ad response, to sandwich wrappers (these will show the nutritional information), but the Japanese attitude to technology is very different to other countries. And have you ever tried texting in Japanese? There is evidence that QR codes are being used elsewhere in a variety of interesting ways. In France, magazines such as Public (like the French Heat magazine) use QR codes at the bottom of each page. Scanning them takes the reader to more content from the article. Recently in the UK, the free London paper, Metro has used QR codes in the same way. In the US, the codes are used in direct response TV, where a 45 second commercial is extended into a longer engagement with the user being taken to more videos and offers. In the UK Pepsi used QR codes on their Pepsi Max cans 2008. Although there are no figures reporting their success, if it had worked well I think we would have been told. Marks and Spencer experimented with QR vouchers on their juice packs in 2009. Again, the response appeared to be low. In many ways, QR on food packaging makes sense. With all the nutritional information, there is little room to put things like offers, but a 2d barcode can include nearly 700 words of information in a space as small as 25mm. The problem is that they are just not catching on with mobile users.
Effort vs Reward
When looking at the adoption of any technology it’s always about the relationship between effort and reward. SMS, for example required very little effort, but the reward was a cheap, fast means of communication. When teenagers got onto it, there was no stopping SMS. With QR, the effort is both downloading the reader (few phones have them), taking the picture of the code and awaiting the response. A few years ago, most of the industry thought that QR would take off when the readers were available in all phones. Since then, we have seen a shift in mobile usage where downloading and installing apps is common-place. If smartphone users want to use QR then they will download the app, without question. So, lack of QR readers on phones isn’t really a barrier. The reason they don’t use them is that the reward simply isn’t enough. Whilst it may solve problems for brands, 2d barcodes doesn’t solve anything for the user. Take the Pepsi QR code. All it did was link to a WAP site with more content. There was no offer, discount or anything engaging enough to bother to take the picture of the code.
The other problem that many users have with QR is that it simply doesn’t work very well. For a code to scan well it needs to be done it good light, on a high contrast background. I tried to scan QR code on a pavement in Paris a few years ago. The white, slightly fuzzy code on the dark grey pavement refused to scan. And there’s nothing to drive people away from technology than a poor user experience. That is particularly the case in mobile. For many response campaigns the alternative to QR are SMS shortcodes. We are all familiar with those, and you only have to look at things like reality TV voting to see that people will use them. After all, when you send an SMS it works 100% of the time. From a user perspective, why bother with QR when there is a much better option that is just as faster and far more effective?
When the iPad came out last year, it was touted (amongst other things) as creating a revolution in publishing. The same kind of revolution that the mp3 and iPod brought to music. Whilst publishers have putsome considerable money behind developing tablet-based versions of their publications, the sales are not being realised. Wired is probably the most successful iPad magazine. And so it should be, as the iPad generation are by very definition Wired readers. The first edition in June 2010 sold 100,000 copies. The circulation is now down to 25,000. That’s good compared to others though. Vanity Fair and GQ sell just 10,000 copies each month, and Glamour just 3,000 copies. In short, when it comes to iPad editions, the novelty has worn off.
To put the circulations in in perspective, this blog (which is a relatively minor one) is read by more people each month than read Glamour. OK, this blog is free, but therein lies one of the problems for iPad magazines. The subscriptions are too high. Like it or not, people do not value digital publishing in the same way that they value paper-based publishing. There’s lots of reasons for that. It’s high res, highly portable, very robust and the batteries do not run out.
There is a big difference between mp3’s/iPods in the music sector, and iPads and magazines. The CD was essentially a carrying device. It was a means of getting digital music from one place to another. When the mp3 came along music itself didn’t change, just the means of moving it around from one place to another. However with magazines, it’s different. The paper is more than just a means of transportation, it is the medium. And with paper-based publishing comes a significance and permanence that digital just cannot offer.
There are opportunities for magazine-type publicitions on tablet devices, but things have to change. Aside from the subscription models, the content has to take advantage of the digital device itself to become more content rich and more engaging.
Since Google took over admob a year ago, the company’s ad serving has gone up three times over the previous year – they are now serving a massive 2bn ads every month. The highest performing region was Asia (564%), followed by Western Europe (471%) and Oceania (363%). It looks like mobile advertising really has come of age.