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Contents
1. The state of e-commerce developers
2. Removing the friction from e-commerce
3. The opportunity ahead: the Commerce of Things
4. Research Methodology
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Copyright © VisionMobile 2015 - v.1.0

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ABOUT THE AUTHORS
Marlène Sellebråten
Analyst Partner
Andreas Constantinou
Founder
Alex Veritsis
Data Analyst
Marlène Sellebråten has researched and written
about the global telecoms, mobile and mobile
innovation market for 15 years, working as an
analyst, a tech editor and a consultant, for analyst
firms such as Gartner and publications such as
CommunicationsWeek International (now
Totaltelecom). More recently she was editor-in-
chief of Sweden’s leading publication on B2B
mobile, Mobilbusiness, as well as Sweden’s
largest publication on B2C mobile, Mobil, before
joining VisionMobile as an Analyst Partner.
You can reach Marlène at:
marlene@visionmobile.com
@MSellebraten
As Founder, Andreas oversees the growth and
strategy at VisionMobile. He has been working on
the mobile industry since 2000, helping take the
very first smartphones to market. Since then he’s
worked with the top technology brands including
Microsoft, Intel, Google, Amazon and AT&T. In
his academic life, Andreas is an Adjunct Professor
at Lund University, Sweden, where he teaches
Internet Business Models. He is passionate about
mapping the future and the economics that will
shape how people communicate, work and play.
You can reach Andreas at
andreas@visionmobile.com
@andreascon
As a data analyst, Alex dives head-first in all
VisionMobile datasets to unearth meaningful
associations and trends in the app economy.
Being an active member of the team that distills
data noise to data sense, Alex explores
correlations and creates visualizations of the
Developer Economics survey data and
participates in all VisionMobile data-driven
projects. Alex holds a BA in Economics and an
Msc in Business and Financial Economics from
the University of Greenwich.
You can reach Alex at
alex@visionmobile.com
@VforVeritsis

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Key Messages ..................................................................4
The state of e-commerce developers...................................5
Mobile commerce: A $600 billion opportunity ............................... 5
Smart mobile developers go for e-commerce................................... 6
The Internet of Things: five connected objects per smartphone
owner ......................................................................................... 10
IoT population at 4.5 million and set to double by 2020 ............... 10
Making money: a developer community in need of directions........ 11
Android catching up on iOS in m-commerce ............................ 12
Removing the friction from e-commerce........................... 14
Retail: Pinterest’s buyable buttons............................................ 15
Retail: Zalando........................................................................ 15
Smart Home: Amazon Dash Replenishment Service (DRS) ...... 15
Smart Home: Amazon Echo .................................................... 16
Smart Office: HP Instant Ink ................................................... 17
Transportation & Food Delivery: Click & Pizza and Click & Go by
Telefonica and Telepizza ......................................................... 17
Smart Home: Flic, the smart button......................................... 18
Smart city: AFA JCDecaux Denmark ...................................... 18
Connected Car: Volvo Sensus connect with Park & Pay ............ 19
The opportunity ahead: the Commerce of Things............... 20
An unconnected ‘thing’ is a missed business opportunity .............. 20
Affiliate Buttons ...................................................................... 20
Closing the attribution loop ..................................................... 21
Programmatic e-commerce ...................................................... 22
Research Methodology.................................................... 23
TABLE OF CONTENTS

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• E-commerce is already the biggest revenue generator among
mobile developers. Mobile developers using e-commerce (for
physical or digital goods) have median monthly revenues of
$1,000-$2,000 compared to a measly $200-$350 median
monthly revenue for mobile developers across all revenue
models.
• Yet, only a small share of mobile developers (9%) have
chosen to work with e-commerce, based on our 9th
Developer Economics survey wave of May 2015, of more
than 13,000 software developers. The rise of mobile
commerce provides developers with an unprecedented
revenue opportunity, if only they can acknowledge it and
seize it.
• E-commerce models also generate good returns, with 16% of
Internet of Things developers who use e-commerce of
physical goods generating more than $10,000 per month,
while the equivalent figure for those working with e-
commerce of digital goods is 20%. Yet, despite the revenue
benefits, only 9% of IoT developers go for e-commerce
revenue models.
• Internet of Things is still a field in nascent stages, whether
we look at Wearables, Smart Home, or Connected Car
verticals. Of all IoT developers, 57% are Hobbyists and
Explorers. 59% of IoT developers are earning under $500
per month, based on our survey of 3,150+ IoT developers in
our Developer Economics 9th edition survey, which run in
May 2015.
• We estimate that there are 4.5 million IoT developers in the
world today, a community in an early phase that is set to
grow at a CAGR of 17% through 2020.
• IoT is growing largely thanks to mobile developers, 53% of the
world’s 5.5 million mobile developers in 2014 also worked
on IoT projects, growing to 59% out of 6.3 million
developers in 2015.
• iOS remains the most lucrative e-commerce platform. 50%
of the developers targeting iOS with e-commerce revenue
models are pulling in more than $10,000 a month, excluding
those who are not interested in making money.
• We believe that Internet of Things will fundamentally change
the shape of e-commerce. Any connected object could
become a distribution surface and customer acquisition
channel for consumables - Amazon’s Dash and DRS service
offer an early glimpse of this model. IoT extends e-
commerce affiliate and user acquisition schemes beyond
websites, mobile, and apps, into any physical surface.
KEY MESSAGES

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Connected buttons such as Telefonica’s Click & Pizza and automatic
replenishment services, such as Amazon Dash are only early, if
telling, examples of things to come.
Mobile commerce is on a path to grow over twice as fast as e-
commerce. Estimated at $200 billion in 2014, m-commerce sales are
set to grow $100 billion annually to reach $600 billion in value in
2018, Digi-Capital estimates. By then, global retail is expected to
reach a whooping $28.3 trillion in value, in which e-commerce will
account for 8.8% (a conservative estimate), according to eMarketer.
E-commerce models also generate good returns, with 16% of
Internet of Things developers who use e-commerce of physical goods
generating more than $10,000 per month, while the equivalent figure
for those working with e-commerce of digital goods is 20%. Yet,
despite the revenue benefits, only 9% of IoT developers go for e-
commerce revenue models, based on our 9th Developer Economics
survey wave of May 2015.
In this paper we explore the untapped e-commerce revenue
opportunity for developers, both those working on mobile apps and
Internet of Things projects. We then discuss case studies of how
connected devices, frictionless payment, and discovery is changing e-
commerce. This leads us to a prediction of the e-commerce industry
future, which will be structurally disrupted as every connected
surface becomes an e-commerce window.
Mobile commerce: A $600 billion opportunity
Global retail sales will generate in 2015 an annual turnover of $23.9
trillion (yes trillion!), of which e-commerce makes up 6.7%. By 2018,
global retail is expected to reach a whooping $28.3 trillion in value,
in which e-commerce will account for 8.8%. Sales of physical goods
are here set to lead the growth in e-commerce as digital goods reach
maturity, according to Forrester.
1 THE STATE OF E-COMMERCE DEVELOPERS
Imagine a world where every object is connected to the Internet. And comes with smarts.
Where every connected object is a window into an e-commerce store. Where browsing,
shopping, paying and getting stuff delivered is so frictionless that it has almost become
invisible. This future is about 5-10 years away. But there are already signs of it here,
today.

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Global retail sales will be close to 50 times the size of m-commerce
which is set to grow to $600 billion by then. While analyst estimates
vary, they all point to the same trend: e-commerce will represent an
ever-growing share of global retail.
Simultaneously, m-commerce will grow rapidly, actually twice as fast
as e-commerce. E-commerce growth will be especially fast-paced in
China and Latin America. China is the fastest growing m-commerce
economy with nine of Internet Retailer’s ten fastest-growing Mobile
500 companies worldwide (based on annual mobile sales). The
mobile share of e-commerce in China is already above 50%,
according to Criteo, an advertising solution provider for the retail
sector.
Estimated at $200 billion in 2014, m-commerce sales are
conservatively forecast to grow by $100 billion annually to reach
$600 billion in value in 2018, according to Digi Capital.
According to Internet Retailer’s data, countries outside of the US will
lead the way when it comes to m-commerce growth, with Europe
growing 71% year-on-year in 2015, while Latin America is set to
grow 60% year-on-year. These are however pale figures compared to
those of China, where the top 14 Mobile 500 e-retailers are
collectively on their way to growing mobile sales at an estimated
249% this year. China and the US are together the world’s largest e-
commerce markets measured in dollars. And the UK leads all
countries in terms of the e-commerce share of total retail sales, at
13% in 2014.
We believe that m-commerce growth is accelerating and will outpace
that of e-commerce as more and more services are adapting to
smaller screens, smartphone penetration is increasing
disproportionately in developing markets that are not yet saturated,
and payments on mobile devices get more and more frictionless.
Smart mobile developers go for e-commerce
Our research shows that mobile e-commerce is by far the largest
revenue opportunity in the app economy. As we'll see, e-commerce as
a revenue model is likely to provide the highest median monthly
revenue to mobile developers. Indeed, one in three mobile developers
who use e-commerce revenue models make more than $10,000 per
month. Yet, only a small share of developers, 9%, have chosen to
work in that field, based on our 9th Developer Economics survey
wave of May 2015. We believe that more developers will join in as
off-the-shelf inventory selection, frictionless payment systems and
fulfillment-as-a-service become more prevalent.

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The Internet of Things is still a field in its nascent stage, whether we
look at Wearables, Smart Home, or Connected Car verticals. Of all
IoT developers, 57% are Hobbyists and Explorers, with a goal to
learn, have fun, build something for their own use, and in some cases
explore new business opportunities. As such, it should come as no
surprise that 59% of IoT developers are earning under $500 per
month and 79% less than $5,000 per month, based on our survey of
3,150+ IoT developers in our Developer Economics 9th edition
survey which run in May 2015.
Selling physical goods, that is devices, together with software
licensing are already the preferred ways of doing business for IoT
developers. Among IoT developers, 18% of those working with the
sale of physical products make more than $10,000 per month. This
compares to 22% among IoT developers working with software
licensing, the highest revenue-generating revenue model for IoT
developers.
E-commerce models also generate good returns with 16% of IoT
developers working with e-commerce of physical goods generating
more than $10,000 per month, while the equivalent figure for those
working with e-commerce of digital goods is 20%. Yet, despite the
revenue benefits, only 9% of IoT developers go for e-commerce.
When it comes to choosing a revenue model, 19% of IoT developers
prefer to work on selling physical goods, which places this way of
doing business on par with software licensing and contract work
(both at 19%), excluding developers who are unsure about their
business model.

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The Internet of Things: five connected objects per
smartphone owner
In parallel with the rapid growth of e-commerce and m-commerce,
Internet of things (IoT) has started to find its mark and is steadily
leaving the hype phase to become a revenue-generating reality. By
2020, the number of connected objects is set to reach a volume of 26
billion worldwide, according to Ericsson. Of all those connected
devices, almost 15 billion will be phones, tablets, laptops and PCs.
That translates to nearly three connected things for every person on
the planet or nearly five connected things for every smartphone user,
forecast to have grown to 6.1 billion by 2020, reaching 70% of the
world’s population. These forecasts exclude passive sensors and radio
frequency ID tags. Looking at the amount of connected objects
around us already today makes this forecast seem conservative.
Revenue-wise, estimates are equally impressive. From $655.8 billion
in 2014, the worldwide IoT market is set to grow to $1.7 trillion in
2020, IDC forecasts. This implies the IoT market will grow with a
compound annual growth rate (CAGR) of 14.7%, with devices,
connectivity and IT services making up the majority of the IoT
market in 2020. Modules and sensors alone should by then represent
31.8% of the total IoT market.
IoT population at 4.5 million and set to double by 2020
Based on our research data from over 7,000 IoT developers through
the November 2014 and May 2015 Developer Economics survey
waves, we estimate that there are 4.5 million IoT developers in the
world today, a community in an early phase that is set to grow at a
CAGR of 17% through 2020.

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In addition, 53% of the world’s 5.5 million mobile developers in
2014 also worked on IoT projects, growing to 59% out of 6.3 million
developers in 2015. Out of 6.3 million mobile developers in 2015,
19% were professionally involved in IoT while 40% were involved in
IoT as hobby or side project. We forecast the number of mobile
developers will grow to reach 7.9 million people in 2017.
When it comes to verticals targeted by developers, the smart home
segment is their primary focus, today as well as tomorrow. Indeed,
more than three out of ten of IoT developers (32%) are working on
smart home solutions and 35% are planning to do so in the future.
These numbers tell a tale of a market segment coming of age, with a
greater user reach as well as greater platform maturity.
Retail is the second largest vertical targeted by IoT developers today.
However, possibly due to the lack of maturity and the fragmentation
of this market, whereby much of the activity has thus far consisted of
early stage trials, retail ends up at the bottom of IoT segments
developers are planning to work with in the future. Some IoT
developers may have faced serious challenges on this vertical and will
need incentives to get back on that horse. The third largest IoT
vertical is Industrial IoT, with nearly a third of IoT developers
working on such a project and nearly one in four planning to do so in
the future.
Making money: a developer community in need of
directions
Mobile and IoT developers appear to be a community in need of
directions when it comes to making money. Despite the fact that e-
commerce has the potential to earn mobile developers top dollars,
the business model is not getting the attention it deserves. Indeed,
the top four business models prioritized by mobile developers

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(Advertising, Contract work, Pay per download and Consumable in-
app purchases) all contribute on average lower monthly revenue than
e-commerce.
E-commerce might be an intimidating direction to take, especially
the e-commerce of physical goods as it involves inventory and
fulfillment management, not to mention customer and billing
management. At the same time, e-commerce and fulfillment services
such as Amazon Mobile Affiliate APIs are available off-the shelf.
Developers only need to choose the items they need to sell and build
an online store.
The potential within e-commerce is not just untapped, and not just
substantial, but gets only bigger as more and more objects get
connected to the Internet, potentially turning them into prime
contextual e-commerce real estate.
Android catching up on iOS in m-commerce
Traditionally, iOS users have spent more money on m-commerce
compared with users on other platforms, as have users on tablet and
the web. According to App Annie, iOS users tend to spend up to four
times as much on apps compared to Android users. But data by
Criteo suggests that Android is catching up with iOS in terms of
transactions, if not yet in total transaction value. Although iPhone
users are still on average better off than Android users, and hence
more likely to spend more money on goods and services of all kinds,
the higher Android penetration mitigates this state of facts. At the
same time, following Apple’s inroads in China, the gap between iOS
spending and Android spending might be expanding rather than
retracting, according to App Annie’s data.
Based on our research, 50% of the developers targeting iOS and who
have chosen to make money from e-commerce, excluding those who

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are not interested in making money, are pulling in more than
$10,000 a month. This reflects both the greater disposable income
amongst iOS users and the higher standards that Apple has set for
iOS apps that make it into the store.
And while developers targeting iOS might be doing best out of m-
commerce, 36% of Android developers selling tangible goods are also
making a comfortable income, that is more than $10,000 a month,
according to our research.
Excluding Hobbyists and Explorers, and counting only those
developers building apps for a living, about 44% of all developers are
targeting both iOS and Android. Android remains overall the most
popular platform, as it is targeted by 71% of all mobile developers. A
vast majority of mobile developers working with e-commerce choose
Android as their primary platform (47%), versus 14% that choose
iOS as primary, despite the fact that, to date, iOS has proven to
provide higher monthly e-commerce revenue.

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Here’s some of the commercial developments we discuss in this
section.
• Amazon’s Dash button allows you to re-order washing powder,
with the press of a button; delivery and payment is all taken care
of effortlessly.
• With Amazon Echo, Amazon goes one step further, by letting
consumers order goods and access information just by a casual
conversation with Alexa, Echo’s built-in intelligent virtual
assistant.
• By clicking on a Pinterest buyable button, the user goes from “I
want this” to “I bought this” in just one action.
• Zalando lets shoppers take a photo of a piece of clothing and
matches it to related or alternative clothing products, driving
impulse purchases.
• By letting consumers purchase goods directly off of street
furniture posters, JCDecaux lets consumers act on an impulse
purchase while removing payment friction.
• Connected buttons by Flic or by Telefonica, let you order a pizza
or a taxi just by pressing a single button, no questions asked.
These moves are all part of a bigger structural trend that will see
every connected surface become a prime e-commerce real estate.
2 REMOVING THE FRICTION FROM E-COMMERCE
The next few years we’ll see friction gradually disappear in e-commerce. Transactions will
become intuitive and almost invisible to consumers. The groundwork for this frictionless
e-commerce era has already been laid out, as we’ll discuss in this section.
Vertical Case Company
Retail Pinterest Buyable Buttons Pinterest
Retail Zalando’s photo and order Zalando
Smart Home Amazon Dash Amazon
Smart Home Amazon Echo Amazon
Transportation &
Food Delivery
Telefonica’s Click&Pizza and
Click&Go
Telefonica,
Telepizza, Cabify
Smart Home Flic button Shortcut Labs
Connected Cars Volvo Sensus Park & Pay Volvo, Parkopedia,
EasyPark
Smart City E-commerce from street
furniture
AFA JCDecaux,
Powatag
Smart Office HP Instant Ink HP

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Retail:
Pinterest’s buyable buttons
Social network Pinterest, which lets its members pin pictures of
things of interest, introduced buyable pins earlier this year,
transforming the site into a mobile shopping mall. As Pinterest
describes it itself, if Facebook is a place where a user shows things
they have done, Pinterest is all about showing things a user wants to
have. Adding buyable pins is hence a logical next step to take
Pinterest users from “wanting” to “having”.
While the traditional pins are red, buyable pins are blue and signal
that the merchandise on display can be purchased right through the
Pinterest app. Buyable pins offer a simple and secure checkout to the
site’s mobile app users. Payments can be processed via Paypal,
ApplePay or credit card. Users need only enter their personal billing
information once, reducing friction in the shopping experience.
For brands and merchants it is a novel way to reach customers while
retaining full control over the shopping experience, as Pinterest does
not take a cut from the sales or handle shipping and customer
service. For buyable pins, Pinterest has partnered with five major e-
commerce platforms: Bigcommerce, Demandware, IBM Commerce,
Memento and Shopify.
As of November 2015 there are over 60 million buyable pins to
choose from and the service is available to iOS and Android users in
the US.
Retail:
Zalando
Online fashion retailer Zalando allows users to get buying
recommendations based on clothing items they have spotted around
them. For example, users may notice someone wearing a jacket that
they like. They can take a picture and based on its product
assortment, the Zalando app will propose a set of jackets that are
similar to the one just seen on the street. If the user likes it, they
select it and can there on proceed to checkout.
Here Zalando is offering both impulse shopping and purchasing
convenience. Customers are no longer browsing a stand-alone web
shop but choosing one item that they stumble on that’s worthy of
buying.
Smart Home:
Amazon Dash Replenishment Service (DRS)
Amazon DRS combines Internet of things with e-commerce to
provide a frictionless shopping experience that is is a win-win for
consumers and brands alike.
Launched in March 2015 to Amazon Prime customers in the US,
Amazon DRS is an API that enables reordering and automatic
replenishment of physical goods either manually from connected
buttons or automatically from connected appliances and devices.
DRS powers Amazon’s dedicated connected buttons, Dash Buttons,
as well as connected devices that measure consumable usage using
infrared sensors, scales or other mechanisms, for example Brita’s
water dispensers.
With the thumb-sized Wi-Fi-connected branded buttons, consumers
can place orders in one-click without having to input any billing or
shipping details as these are catered with via their Amazon account.
Dash buttons will typically be used for consumables that are not
associated with a device, such as sport drinks or tooth paste. Orders
via connected appliances are instead placed automatically when
supplies are running low, here again without requiring any further

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action by the user. Users just need to pre-define what quantities they
want to order for which products when it is time to replenish those.
Device makers will have two options for integrating with DRS: either
they can integrate a physical button right into the device or they can
use sensors to measure consumable usage in real-time in order to
enable automatic reordering.
Consumers get the benefit of skipping the hassle of entering shipping
and payment information, whereby the payment process is made
close to invisible. From a consumer perspective, the benefit is
convenience and not having to think twice about re-ordering
consumables. As Dash Buttons are branded, they also create a tighter
relationship between them and the brand. Dash buttons act on the
consumer’s intention to buy before they change their mind.
About 250 products ranging from pasta to baby formulas are already
eligible for DRS, and Amazon has also added new connected device
partners. Since the launch of DRS with three brands - Brother,
Whirlpool, and Brita - Amazon added eleven new partners, among
which General Electric and Samsung, which is indicative of appliance
manufacturers’ growing interest in the service.
DRS is only the beginning as Amazon has already filed a patent for
anticipatory shipping, whereby its backend infrastructure can
anticipate consumers’ future orders and place these in waiting at the
closest shipping hub so as to improve delivery times.
Smart Home:
Amazon Echo
Launched at the end of 2014, Amazon Echo is a hands-free voice-
controlled device that allows users to access internet services such as
information and music as well as order goods via voice commands in
the comfort of their home. Amazon Echo can also control smart
home appliances through its integration with Philips Hue, Samsung
SmartThings, WeMo smart plugs, Insteon and Wink home products.
It also allows Amazon Prime customers to re-order products by
simply asking Echo to place an order.
Echo is powered by the Alexa Skills Kit, a free SDK that enables
customers to interact with devices in a more intuitive way using
voice. Examples of these skills include the ability to play music,
answer general questions, set an alarm or timer.
Amazon also offers Alexa Voice Services, a second SDK that allows
other device manufacturers to integrate the same capabilities as Echo
has, into their own devices. Alexa Voice Services is to Echo what
Dash Replenishment Service is to Dash Buttons; an e-commerce
platform for connected device manufacturers.
The launch of the new Apple TV, also equipped with Siri voice
control, heralds Apple’s march towards the voice-controlled smart
home market. It remains to be seen though how Apple executes on
its vision. The new Apple TV, linked to millions of iTunes accounts
and its myriad of users already acquainted with spending money via
their iOS devices, is in any case a mighty contender to some of the
services Amazon Echo offers. Similar efforts by Google with Google
Now, Microsoft with Cortana or Jibo and Homey are all heading in
the same direction.

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Smart Office:
HP Instant Ink
HP Instant Ink is a connected service that lets a printer order ink
based on consumption. Ink, shipping and cartridge recycling are all
included in the monthly subscription service that promises to deliver
convenience (“you never need to run out of ink”) and cheaper supply
as users pay for the number of pages they print, not for the number
of cartridges they buy.
This is how it works: the consumer buys an eligible connected
printer, signs up for a plan based on the number of pages they
normally print and HP mails Instant Ink Cartridges, removing the
need for manual ordering. No annual fee is charged to the user who
can cancel its subscription any time.
Billing and service starts when the user inserts its first HP Instant Ink
cartridge. As the printer tells HP when to send more ink, users get
ink before they even realize they need it. Postage paid shipping
material is also included to recycle used cartridges. The user’s credit
card is charged 30 days after they insert their first cartridge and then
every 30 days.
HP’s post-paid subscription ink service offers users convenience as it
removes the hassle of running out of ink while at the same time
making payment automatic and frictionless. For HP, it is a good way
not only to plan and streamline its sales of ink but also a good way to
increase loyalty to its brand and products, especially since many
printer users buy cartridges from other suppliers.
Transportation & Food Delivery:
Click & Pizza and Click & Go by Telefonica and Telepizza
In November 2014, Telefónica piloted a number of connected
buttons under the Click & Go brand. These are connected smart
buttons, which can turn the push of a button into a food delivery or a
taxi order.
Telefónica released Click & Pizza with restaurant chain Telepizza
and Click & Go with online private driver company Cabify. Both
buttons build on Telefónica’s Thinking Things Open, a software and
hardware platform for building connected objects.
In the case of Telepizza, the wirelessly connected button lets
customers order a pizza (pre-defined earlier) with just one click.
Once the order is taken, the customer receives a confirmation e-mail
or SMS with the order summary. The service makes ordering a pizza
easier as customers tend to order the same type of pizza and only
need to use the button to do so.

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The Click & Pizza button is limited as it can only perform two tasks:
ordering and canceling. Telefónica is now working on the next
iteration of the button where payment will be integrated, providing
for a frictionless pizza ordering experience. The first button with
integrated payments will be in partnership with Delsuper, an online
grocery ordering service.
“The major benefit with Click & Go is that it is a very simple and
frictionless way of offering a service, it removes earlier barriers
and, as with all buttons, the customer does not need to think, only
click and order.”
Pablo Marin Soto, Global Business Manager IoT at Telefónica
I+D
With Click & Go, a connected button placed in hotels and shops,
users can order a cab with just one click. The button also allows the
user to choose the type of cab being ordered. A receipt with the name
and number of the driver on it can be directly printed from the
button device, adding a level of re-assurance to the user experience.
There is no configuration by the end-user required as the button
comes equipped with a SIM card. For Cabify, this means being able
to roll out the same service to their customers on all of their markets,
including Spain, Mexico, Peru and Chile.
There is an added convenience with Telefonica’s smart buttons as
they contain a SIM card and therefore do not require a smartphone
or a PC to operate.
Smart Home:
Flic, the smart button
Shortcut Labs used crowdfunding to take its smart button, Flic, to
market, which has now started shipping. Contrary to other smart
buttons, like Telefónica’s Click & Pizza or Amazon’s Dash button,
Flic lets the end-user decide which functions they want to associate
with the button, for example take a picture, dim the lights at home or
ring a friend in a specific situation.
Flic is a wireless button that one can stick or carry anywhere thanks
to a powerful backside adhesive and a clip-in. The button can
respond to different triggers, click, double-click and hold, and
therefore execute three different commands. It needs to connect to
an iOS or Android device in order to operate.
In addition to pre-set functions, Flic also supports IFTTT and
Zapier, which allow Flic to connect to hundreds of services, for
example logging your location to a spreadsheet each time you press
the Flic button.
To extend the functionality of Flic, Shortcut Labs have created an
SDK that lets developers integrate Flic with iOS and Android
applications. The company has also recently entered a partnership
with Domino’s Pizza, whereby the pizza chain’s customers will be
able to order a pizza by the click of a Flic button, very much like
Telefónica’s and Telepizza’s Click & Pizza.
Smart city:
AFA JCDecaux Denmark
In 2015, outdoor advertising company AFA JCDecaux entered a
partnership with m-commerce platform Powatag in order to enable
Danish consumers in 20 cities to purchase items via their
smartphones directly from street furniture advertising posters. To
start with, posters will display QR codes but NFC could be
introduced in the future. The campaign is to start rolling out in Q4
2015.
In this case QR codes have been integrated with Danish P2P
Payment solution Mobilepay. This means consumers with the
Mobilepay app, used today by two million Danes, can go through

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with a purchase without having to be re-directed to a brand’s web
page where they are required to enter their payment information.
That payment friction has been removed.
Connected Car:
Volvo Sensus connect with Park & Pay
Sensus Connect, Volvo’s built-in infotainment and navigation
system, has integrated a Park & Pay solution that enables drivers to
find available parking spots and pay for their parking time right from
their car.
Drivers enter their destination into Sensus Connect and the
navigation system will display all possible parking alternatives at the
destination using Parkopedia’s geographical parking data. Once the
driver has chosen a parking spot, they can start their parking time
right from the navigation system provided it is connected to the
EasyPark parking payment platform. They can then shorten or
extend the parking time from the EasyPark mobile app.
The service shows what can be achieved through partnerships, here
between car maker Volvo, parking location data provider Parkopedia
and parking payment specialist EasyPark. The service saves drivers
the hassle of looking for a parking spot, and paying for the right
amount of time. Payment is also automated through the application.

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Risk-taking entrepreneurs, commodity hardware, and cheap access to
capital are forming the perfect storm that will allow Internet of
Things to reshape e-commerce as we know it today.
An unconnected ‘thing’ is a missed business opportunity
Today, it is well understood that adding computing and Internet to a
car, a watch, a thermostat, or a chair can allow the manufacturer to
capture value beyond the purchase of that object and into data-driven
business models. Car makers can now offer post-sales services, like
vehicle diagnostics that alert you when it is time to have your car
serviced by a dealer. Or smartwatch apps that alert you when you’ve
forgotten to lock your car. While these services may not all directly
generate revenue, they may be an extra selling point and extend
customer loyalty. Watchmakers can create stickiness as you can now
use your watch to unlock your front door, or control your thermostat
without leaving the couch. Thermostat makers can now expand into
energy management. Office furniture makers can now extend their
business into productivity management or even wellness with
examples such as the Tao chair that lets you work out from the
comfort of a connected chair.
Makers of connected ‘things’ can subsidize them to make money
from data-driven services. We suspect that new norms will form in
industry after industry, as goods manufacturers and services vendors
experiment with these new business models. What is clear is that
selling unconnected ‘things’ will increasingly look like a missed
opportunity. So will requiring multiple actions to finalize a
transaction.
Affiliate Buttons
We believe that Internet of Things will fundamentally change the
shape of e-commerce. With IoT, washing machines can now not just
deliver detergent just in time by knowing when your supplies run out,
they can also recommend the right detergent, based on your usage,
type of clothes, on demand. Car makers can recommend where you
buy your gas, by understanding your drive journey, availability of gas
stations, pricing on-demand discounts, and gas station commission -
in fact Google’s Waze does this already. Watchmakers can command
a commission from health insurers, as they can monitor your heart
rate, temperature, fitness habits and determine what risk zone you
3 THE OPPORTUNITY AHEAD: THE COMMERCE OF THINGS
The rise of mobile commerce provides developers with an unprecedented revenue
opportunity, if only they can acknowledge it and seize it. It is not just inventory, payment
and fulfillment infrastructure that is falling into place.

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are in. In short, IoT makers can now afford a negative BOM (bill of
materials) “à la Dell”, by subsidizing the cost of hardware with the
revenues from bundled e-commerce services.
Internet of Things will allow any connected “thing” to become an
affiliate for e-Commerce goods that are consumed together with the
“thing”. Any connected object could become a distribution surface
and customer acquisition channel for e-commerce goods and services
of every kind and description. IoT extends e-Commerce affiliate and
user acquisition schemes beyond websites, mobile and apps, into
every physical surface. Amazon’s Dash and DRS service that we
discussed earlier offers an early glimpse of this model.
E-commerce affiliate sales can happen in two ways: firstly, by pre-
sales hardcoding of the e-commerce service into the physical object.
Think how Telefónica’s Click & Pizza gets the order fulfilled right
there and right then. Affiliate sales can also be dynamic. Think how
BMW can recommend a different brand of oil for the maintenance of
the car based on price, oil efficiency observed on the car and many
other similar cars, and the driver’ analyzed behavior on the road.
Naturally, the more makers like BMW can track user behaviour, the
more value they will capture as an e-commerce affiliate. Their
succeeding in doing so will highly depend on how well they can track
user behavior, how they can engage users in doing so as well as how
qualitative the gathered data is.
White goods manufacturers can now extend their business models
across the product lifecycle. They can also own the device real-estate
that offers e-commerce discovery and distribution, and act as a
customer acquisition channel for e-commerce goods and services.
More likely, this customer broker role will be seized by more agile e-
commerce players.
Closing the attribution loop
More importantly, Internet of Things will allow e-commerce to
stretch across the breadth of the customer journey. Consider how
limited e-commerce is today in understanding the customer journey:
you search on Google for something to buy, click on what fits your
purchase intent, including advertisement links, which leads to a
purchase on the device being used. Along that path, Google receives
a payment (typically on a cost-per-click, CPC) from the advertiser on
the assumption that a small percentage of those clicking the link will
buy, making the business case for paying the CPC. There is no way
for advertisers to know when a real purchase was made in a brick-
and-mortar shop, let alone make someone with purchase intent visit
that physical shop in the first place. This is the holy grail of
advertising business, that is being able to track consumer behavior
from awareness to intent to purchase to purchase, and across web,
mobile and increasingly a number of physical connected touch
points. By embedding the e-commerce discovery and distribution
surface on physical objects, and more connected touch points across
the customer journey, you are now able to cross the last mile from
awareness to purchase intent to purchase.
Put simply, connected devices will become the optimum point-of-sale
for e-commerce, search boxes and app stores for services, at the ideal
place and ideal context of a purchase intent.

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Programmatic e-commerce
Consider billions of “things” doubling as e-commerce points of sale
(PoS). This will result in the unbundling and extension of PoS for e-
commerce outside the web (think Amazon.com), app and product
(think Kindle) silos controlled by e-commerce players. It will lead to
programmatic auctions for e-commerce Call To Action (CTAs), as
the most market-efficient way for matching demand with supply.
This will mean that the programmatic, real-time bidding (RTB) for
ads today will carry over to e-commerce and into the real world.
More importantly, by retaining attribution across the customer
journey and touch points, programmatic e-commerce will be able to
monetize by Cost-per-Action (CPA) in the physical world while
providing enhanced value experience beyond what the comparable
but unconnected appliance could ever bring. We can clearly expect a
major reshuffle of the advertising industry and a further cycle of VC
investment and consolidation that it will entail.

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For the purpose of this report, VisionMobile has done market
research around e-commerce, m-commerce and the Internet of
Things, as well as analysed data from Developer Economics 9th
edition, which reached an impressive 13,000+ developers. We have
also scanned the market for the most relevant use cases, talked to key
players active in the field of e-commerce and the Internet of Things,
as well as analyzed secondary macro-economic data on the
researched markets.
Developer Economics 9th edition, with 13,000+ respondents from
149 countries around the world, is the most global research on
mobile, desktop, IoT and cloud developers combined ever
conducted. This large-scale online developer survey was designed,
produced and carried out by VisionMobile over a period of five
weeks between May and June 2015.
Respondents to the online survey came from over 149 countries,
including major app and IoT development hotspots such as the US,
China, India, Israel, UK and Russia and stretching all the way to
Kenya, Brazil and Jordan. The geographic reach of this survey is truly
reflective of the global scale of the developer economy. The online
survey was translated in 7 languages (Chinese, French, Portuguese,
Japanese, Korean, Russian, Spanish) and promoted by more than 70
leading community and media partners within the app development
industry.
To eliminate the effect of regional sampling biases, we weighted the
regional distribution across 8 regions by a factor that was determined
by the regional distribution and growth trends identified in our App
Economy research. Each of the separate branches: mobile, desktop,
IoT and cloud were weighted independently and then combined.
The survey gathered responses from developers across mobile
platforms including Android, Amazon Fire OS, BlackBerry 10,
Firefox OS, iOS, Java ME, Jolla Sailfish, Mobile Browser, Tizen,
Windows Phone, Windows 8 and Ubuntu Phone. To minimise the
sampling bias for platform distribution across our outreach channels,
we weighted the responses to derive a representative platform
distribution. We compared the distribution across a number of
different developer outreach channels and identified statistically
significant channels that exhibited the lowest variability from the
platform medians across our whole sample base.
RESEARCH METHODOLOGY

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distilling market noise into market sense