In part 2, we discussed thinking of building mobile shopping as the problem of porting a good desktop app to mobile by finding ways to mitigate the limitations of the mobile device ends up delivering a frustrating shopping experience. And this user frustration is exactly what users are finding. In this part, I look at some great new ideas that people are building.

Advertising messages through mobile texts (SMS)

Mobile advertising is a fast growing market, but now only about 1% of global advertising spend. Introduced around 1997, six years after the availability of the SMS data communication channel on 2G phones, SMS text advertising is estimated at over 90% of mobile advertising. Since text messages are easy to reply to and forward, in its best forms, text ads have the ability to generate an interactive two-way conversation with users and can be viral when users forward to friends. Some early ad campaigns drew phone user ire due to unwanted messages, particularly when users paid for each message received. This has decreased due to unlimited text message plans and as more advertisers adhere to Mobile Marketing Association and the IAB (Interactive Advertising Bureau) mobile ad guidelines.

Location-based marketing and geo-fencing

Geo-fencing and location-based marketing has been talk about as the next thing for well over a decade. The Wireless Communications and Public Safety Act of 1999, also known as the 911 Act, mandated that 911 be a universal emergency assistance number. That required that wireless carriers be able to know the location of a mobile phone that dialed 911. Given the infrastructure to locate a mobile user would be built, other uses such as location-based marketing were envisioned. Early location detection, however, was based on cell tower triangulation, was both not very accurate, was sold as an expensive service by the wireless carriers and did not get traction for other than 911. Today, GPS and other location services are standard in smartphones and APIs enable easy creation of location-aware applications. Although concerns over privacy issues have been raised, it is viewed a technology that will have major impact on the marketplace, enabling businesses to engage their customers based on their location. Case study by Range Online Media of a deployment with The Container Store found that the interaction rate for a geo-targeted campaign was 72% higher than a nationally-targeted campaign. A study by Latitude, Dec 2012, on user responses to location-aware retailer communications found 52% of recipients saying that they would visit the website and 50% saying they would visit the store soon. Now that the effectiveness has been proven, location-based marketing will become mainstream and high growth.

Mobile tagging and scanning

With their built-in cameras, smartphones can now easily scan tags such as barcodes and QR codes to quickly access content. Although adoption was initially slow, standardization on codes is making these ubiquitous. By giving direct, one-click access to website and app content, these streamline the process for the user.

One of the most successful uses of mobile scanning is Walgreens prescription refill. Using the Walgreens’ mobile app, the customer simply scans the barcode on the bottle. Highly popular with their customer base, Walgreens fills a mobile prescription request every second. With this success, Walgreens is looking to expand customer engagement around their mobile app.

Fast, simple purchase

Perhaps an area that has had much attention is mobile payments. There have been some notable successes with dedicated mobile apps for payments, such as Starbucks mobile app, which at the current 4 million transactions per week now accounts for 10% of all U.S. mobile payment transactions.

Despite the success of dedicated mobile payment applications at making the payment process fast and simple, mobile commerce checkout is still a huge problem in many apps. The recent “2013 Mobile Commerce Insights” report by Jumio found that 66% of users have abandoned transactions due to issues at checkout, including the checkout process was too long, too difficult on their device or that the purchase would not go through. Thus, streamlining the checkout process must be a priority for those developing m-commerce apps.

Discovery and navigation — The Shopping Gap

Above, I have discussed a few of the new concepts in mobile apps for both streamlining the process for users to get to the mobile store and content and payment transactions. It is the big area between those on which Vioby has focused with our voice-interactive shopping assistant: navigation and discovery of products and information and selection to purchase before checkout. We call this the shopping gap. In the next and final part of this series, I will talk a bit about what Vioby and some others are doing to simplify this part of the mobile shopping experience. And visit our website, www.vioby.com.