The Maters Thesis is an in-depth study on the latest trends on mobile advertising and digital strategy. It also talks about application on hospitality industry where brand and customer loyalty can be increased through mobile websites and apps rather than just losing profits to online travel agents such as priceline etc.

1.
MOBILE
DIGITAL
MARKETING
AND
THE
FUTURE
OF
HOTELS
THESIS
Submitted
in
Partial
Fulfillment
of
the
Requirements
for
the
Degree
of
MASTER
OF
SCIENCE
IN
MANAGEMENT
OF
TECHNOLOGY
at
NEW
YORK
UNIVERSITY
POLYTECHNIC
SCHOOL
OF
ENGINEERING
by
Karishma
Aggarwal
May
2014

2.
MOBILE
DIGITAL
MARKETING
AND
THE
FUTURE
OF
HOTELS
THESIS
Submitted
in
Partial
Fulfillment
of
the
Requirements
for
the
Degree
of
MASTER
OF
SCIENCE
IN
MANAGEMENT
OF
TECHNOLOGY
at
NEW
YORK
UNIVERSITY
POLYTECHNIC
SCHOOL
OF
ENGINEERING
by
Karishma
Aggarwal
May
2014
Approved:
Advisor
Signature
Date
Department
Head
Signature
Date
Copy
No.
#
Student
ID#:

3. iii
VITA
Charisma Aggarwal
LaCharismae@Gmail.com
1. NEW YORK UNIVERSITY, COLLEGE OF ENGINEERING & NYU STERN New York City, New York
Masters in Technology Management & Innovation Jan 2013 – May 2014
Masters Degree in Technology Management (deployment & digitalization of businesses)
and Innovation. Luxury marketing course from NYU Leonard N. Stern School of
Business.
2. NEW YORK UNIVERSITY, COLLEGE OF PROFESSIONAL STUDIES New York City, New York
Professional Certificate in Digital Marketing 2014
Digital Marketing, Online Strategy, Multi-Channel Marketing, Analytics
3. UNIVERSITY OF DELHI New Delhi, India
Bachelors of Commerce (Business) 2005-2008
4. THE BRITISH COUNCIL
HND Business & Computing Applications, UK, New Delhi
Associates equivalent in E-commerce and online Business Applications 2003-2005
1. Giorgio Armani Corporation, USA Feb – May 2014
CRM, E-Commerce & Trade Marketing
Contract position where my role includes planning for Armani events for all brands in the
portfolio, strategy to increase footfall at retail locations, Brand's e-commerce initiatives and
external partnerships.
2. Omni-Channel Marketing, Branding, and Promotions, New Delhi, India 2010 –2013
Business Development Consultant: Specialized in collaborations, events and launching
Luxury Brands into India’s Ultra Wealthy Marketplace
3. GLOPLAST Manufacturing and Design, New Delhi India 2002 – 2010
Head of Business Development and Customer Relationships for manufacturing large
LED signs and displays main clients include multi-national corporations.
CONSULTING PROJECTS:

4. iv
FERRARI SUPER CARS, INDIA: Market launch of Ferrari and Maserati in India
Activities: Created and managed various events and marketing campaigns including
F1 track events, Ferrari Ezperienza, the launch of Ferrari FF with F1 driver Fernando
Alonso etc. Personally promoted to a network of billionaires, ambassadors, and
politicians as prospective buyers
GENESIS LUXURY, INDIA: Market Research, Strategic and Acquisition Consulting
Activities: Consulted on various projects, including luxury retail locations based on
research, reporting on collaborating with international luxury brands
ESSEC BUSINESS SCHOOL, PARIS: Promoted renowned MBA in Luxury Marketing via
Round Table Conferences in India to connect the alumni and luxury industry
professionals
HOTEL GRAND, NEW DELHI: Instrumental in re-positioning the luxury hotels chain
formerly Grand Hyatt target towards the India’s ultra-wealthy market.

5. v
Acknowledgements
Firstly,
I
would
like
to
acknowledge
the
contribution
of
Dr.
Brian
Glassman,
PhD.,
Technology
Management,
Product
Development,
&
Innovation
for
motivating
me
and
being
a
mentor.
Without
his
constant
moral
support,
this
research
would
not
have
been
completed.
I
would
also
like
to
express
my
appreciation
to
Dr.
Bharat
Rao,
Department
Chair
for
the
Management
of
Technology
Program.
The
knowledge
he
conveyed
to
me
through
his
course
on
marketing
was
directly
applied
to
create
this
thesis’s
primary
and
secondary
research
studies.
I
would
like
to
thanks
to
Professor
Jonatan
Jelen,
my
advisor
for
teaching
the
entrepreneurship
course
and
Professor
Mike
Driscoll
both
of
who
strengthen
my
enthusiasm
for
technology.
Professor
Driscoll’s
course
on
Advance
Trends
in
Technology
and
Global
Innovation
demonstrated
his
immersion
passion
for
business
and
technology,
which
played
strongly
into
the
formation
of
this
thesis.
I
further
extend
my
personal
gratitude
to
the
interviewees
Mr.
Amit
Modi,
Mr.
Maurizio
Bonivento,
Mr.
Arjun
Channa
and
Mr.
John
K.
Knowles
for
their
time
and
replying
candidly
to
questioning
shown
herein.
Lastly,
I
would
like
to
give
a
strong
thanks
to
Mr.
Vivek
Veeriah,
Administrative
Director
of
Management
of
Technology
Program
for
being
prompt
and
supportive
at
all
times.

6. vi
Dedication
To
my
parents:
Vimal
&
Neeta

7. vii
ABSTRACT
MOBILE
DIGITAL
MARKETING
AND
THE
FUTURE
OF
HOTELS
by
Karishma
Aggarwal
Advisor:
Jonatan
Jelen
Submitted
in
partial
fulfillment
of
the
requirements
for
the
degree
of
Master
of
Science
in
the
Management
of
Technology
May
2014
ABSTRACT
This
research
focuses
on
mobile
marketing.
In
particular,
it
focuses
on
the
value
that
mobile
marketing:
methods,
technologies,
and
strategies
have
to
the
hotel
industry.
Chapter
1
is
a
comprehensive
review
of
the
current
state
of
mobile
marketing
and
details:
the
growth
rates
of
mobile
marketing,
how
consumers
are
using
the
smart
phones
and
tablets,
using
mobile
analytics,
understanding
mobile
marketing
strategies,
and
the
newest
mobile
marketing
technologies.
Any
reader
wishing
to
gain
a
firm
understanding
of
mobile
marketing
from
one
source
would
find
chapter
1
particularly
valuable.
Chapter
2
and
Chapter
3
build
on
the
prior
chapter
by
focusing
on
the
application
of
mobile
marketing
to
the
hotel
industry.
In
particular
it
examine
current
traveler
mobile

8. viii
habits,
how
smart
phones
and
tablets
are
used
to
book
hotel
and
use
their
services,
and
includes
a
detailed
reviews
of
top
hotel
apps
of
2013.
Chapter
4
is
standard
with
any
research
study
and
includes
the
research
studies:
goals,
motivation,
limitations,
and
study
methodology.
Chapter
5
discusses
the
interview
results.
Here
the
general
managers
of
four
hotel
chains
are
interviewed
and
their
responses
were
cross-­‐compared
against
the
prior
literature.
In
particular,
the
interviews
captured
information
on
these
hotels’:
marketing
capabilities,
customer’s
mobile
usage,
management’s
awareness
of
current
mobile
technologies,
and
the
value
management
see
in
specific
mobile
technologies.
Finally,
Chapter
6
is
a
summary
of
the
research
findings
and
provides
the
author’s
future
predictions
of
how
mobile
marketing
will
evolve
and
affect
the
hotel
industry
in
the
near
future.

9. ix
TABLE
OF
CONTENTS
ABSTRACT
.........................................................................................................................
vii
TABLE
OF
CONTENTS
.........................................................................................................
ix
LIST
OF
FIGURES
...............................................................................................................
xii
LIST
OF
TABLES
................................................................................................................
xiv
CHAPTER
1
INTRODUCTION
..................................................................................................................
1
A.
Summary
of
the
Chapter
..........................................................................................
2
B.
Key
Definitions
.........................................................................................................
3
C.
Key
Statistics
Related
to
the
Growing
Usages
of
Mobile
Phones
.............................
3
D.
The
Shift
in
the
Mobile
Phone
Devices
toward
Smart
Phones
.................................
5
E.
Smartphones
are
Becoming
More
Affordable
.........................................................
7
F.
Tablets
usage
and
Marketing
...................................................................................
9
G.
Mobile
Based
Commerce
.......................................................................................
11
H.
Smartphone
User
Habits
a
Worldwide
Assessment
...............................................
13
I.
The
Future
of
Shopping
and
Omni-­‐Channel
Retail
.................................................
18
J.
Mobile
Shopping
....................................................................................................
24
K.
Mobile
Applications,
Apps
.....................................................................................
30
L.
Measurement:
Application
Analytics
.....................................................................
34
M.
Innovative
Mobile
Advertising
and
Media
.............................................................
35
N.
Strategy
of
Mobile
Advertising
..............................................................................
41
O.
Mobile
Tactics
........................................................................................................
44
CHAPTER
2
MOBILE
MARKETING
FOR
HOTELS
...................................................................................
46
A.
Hotel
Mobile
Marketing
and
Distribution
Channels
..............................................
46
B.
Smart
Phones
and
Tablets
use
in
Travel
................................................................
49
C.
Undercutting
the
Online
Travel
Agencies
..............................................................
57
D.
The
Future
of
Mobile
Hotel
Website
and
Apps
......................................................
59

10. x
CHAPTER
3
ANALYSIS
OF
TOP
HOTEL
APPS
.........................................................................................
62
A.
A
Situational
Analysis
for
Hotel
Apps
.....................................................................
62
B.
W
Hotel
Mobile
App
Analysis
.................................................................................
63
C.
Ritz-­‐Carlton
Mobile
App
Analysis
...........................................................................
64
D.
Four
Seasons
App
Analysis
.....................................................................................
65
CHAPTER
4
RESEARCH
GOALS
AND
RESEARCH
METHODOLOGY
........................................................
68
A.
Summary
of
Chapter
..............................................................................................
68
B.
Research
Goals
.......................................................................................................
68
C.
Research
Limitations
..............................................................................................
70
D.
Research
Methodology
..........................................................................................
70
E.
Limits
of
applying
results
.......................................................................................
71
CHAPTER
5
RESEARCH
RESULTS
AND
DISCUSSION
.............................................................................
72
A.
Summary
of
this
Chapter
.......................................................................................
72
B.
Profile
of
Respondent
1
-­‐
Amit
Modi,
CFO,
Hotel
The
Grand,
New
Delhi
..............
73
C.
Profile
of
Respondent
2
-­‐
John
K.
Knowles
Roger
Smith,
New
York
City
................
74
D.
Profile
of
Respondent
3
-­‐
Arjun
Channa,
General
Manager,
Starwood
Hotels,
Canada
..........................................................................................................................
75
E.
Profile
of
Respondent
4
-­‐
Maurizio
Bonivento,
General
Manager
Empire
Hotel,
New
York
......................................................................................................................
76
F.
Interviewee
Profile
Analysis
...................................................................................
76
G.
Results
of
Marketing
Capabilities
Questions
..........................................................
78
H.
Marketing
Capabilities
...........................................................................................
78
I.
Results
for
the
Percentage
of
Customers
using
Mobile
Questions
........................
78
J.
Results
of
Awareness
of
Trends
Questions
............................................................
79
K.
Implementing
New
Technologies
...........................................................................
80
L.
Results
of
Mobile
Coupon
Scenario
Question
........................................................
80

11. xi
M.
Results
of
Mobile
Advertising
Scenario
Question
..................................................
81
N.
Results
of
Advertising
with
Geo-­‐Fencing
Scenario
Question
.................................
81
O.
Results
of
Mobile
Hotel
Services
Scenario
Question
.............................................
82
P.
Results
of
Social
Media
Scenario
Question
............................................................
83
Q.
Results
of
Mobile
Social
Media
Targeting
Guests
Scenario
Question
....................
84
R.
Results
of
Places
of
Interest
and
Value
Scenario
Question
....................................
85
CHAPTER
6
CONCLUSIONS
AND
FUTURE
OF
MOBILE
MARKETING
FOR
HOTELS
................................
86
A.
Summary
of
the
Chapter
........................................................................................
86
B.
General
Conclusion
on
the
Mobile
Marketing
.......................................................
86
C.
Conclusion
on
the
Review
of
Literature
for
Hotel
Mobile
Marketing
....................
87
D.
Conclusions
from
the
Analysis
of
Top
Hotel
Apps
..................................................
87
E.
Conclusion
of
Result
of
the
Research
Study
...........................................................
88
F.
Future
of
Hotel
Mobile
Marketing
.........................................................................
88
G.
A
Bright
Outlook
on
the
Future
..............................................................................
89
H.
Prospective
Threats:
..............................................................................................
90
BIBLIOGRAPHY
..................................................................................................................
92
APPENDIX
A-­‐
SURVEY
INSTRUMENT
...............................................................................
100
APPENDIX
B-­‐
SURVEY
RESULTS
.......................................................................................
110

12. xii
LIST
OF
FIGURES
Figure
1:
Mobile-­‐Cellular
Penetration
in
2013
...................................................................
4
Figure
2:
Mobile-­‐Cellular
Subscription
Growth
Rates
2005-­‐2013
......................................
5
Figure
3.
Mobile
Phone
Users
Worldwide,
2012-­‐2017
.......................................................
7
Figure
4:
Worldwide
Smartphones
Shipments
(USD
Billions)
............................................
8
Figure
5:
Mobile
Traffic
Sources
by
Device
.........................................................................
9
Figure
6:
Global
PC
(Desktop
/
Notebook)
and
Tablet
Shipments
by
Quarter
Q1:1995
–
Q1:
2013
...............................................................................................................
10
Figure
7:
Global
Device
Penetration
per
Capita
...............................................................
11
Figure
8:
From
Telephones
to
Smartphones
–
Technology
Adoption
Lifecycle
US.
Households
by
Type
of
Phone
1900-­‐2011
............................................................
14
Figure
9:
Seven
Primary
Reasons
that
People
use
their
Smart
Phones
............................
17
Figure
10:
The
Non-­‐Stop
Customer
Experience
Model
....................................................
20
Figure
11:
Advertisement
Offering
delivered
via
a
RFID
Beacons
and
Smartphones
.......
26
Figure
12:
Purchasing
Options
Mobile
Shopping
Lifecycle
...............................................
28
Figure
13:
Traditional
Purchase
Funnel
............................................................................
28
Figure
14:
Mobile
Applications
continue
to
Dominate
the
Web
......................................
30
Figure
15:
Mobile
Apps
Features
and
Functionality
.........................................................
32
Figure
16:
Kind
of
Mobile
Apps
from
Developer
Standpoint
............................................
33
Figure
17:
Mobile
Ads
Classifications
...............................................................................
40
Figure
18:
Frequency
vs
Quality
of
Mobile
Strategy
.........................................................
43
Figure
19:
Percentage
Increase
in
Mobile
&
Tablet;
Decrease
in
Desktop
in
Q3
2013
....
48
Figure
20:
Graph
Showing
Usage
by
Time
of
Computer,
Tablet,
and
Smart
Phone
.........
48
Figure
21:
Reasons
for
Booking
on
a
Smartphone
...........................................................
48
Figure
22:
Part
1:
Infographic
on
Travel
Usage
Trends
for
Mobile
devices
in
USA
...........
51
Figure
22:
Part
2:
Infographic
on
Travel
Usage
Trends
for
Mobile
devices
in
USA
...........
52
Figure
23:
Infographic
showing
what
customers
want
from
Hotels
.................................
55
Figure
24:
Infographic
on
Today’s
Mobile
Booker
............................................................
56

13. xiii
Figure
25:
Affluent
Travels
in
USA
using
more
Hotel
Sites
vs.
OTAs
................................
58
Figure
26:
Impact
of
Quality
of
Website
and
App
on
Segmentation
of
Travelers
............
60
Figure
27:
Facilities
requested
by
Business,
Leisure
and
Family
Travelers
.......................
61
Figure
28:
Hotel
Brands
according
to
Digital
IQ
Index
for
Hotels
2013
............................
62
Figure
29:
Graphic
User
Interface
of
W
Hotels
Mobile
Application
.................................
63
Figure
30:
Graphic
User
Interface
of
Mobile
Application
of
Ritz
Carlton
Hotels
..............
64
Figure
31:
Graphic
User
Interface
of
Mobile
Application
of
Four
Seasons
Hotels
...........
65
Figure
32:
Affluent
USA
Traveler’s
Bookings
made
via
Browser
and
Mobile
App
............
67
Figure
33:
Respondent
1:
Amit
Modi,
CFO,
Hotel
The
Grand,
New
Delhi
........................
73
Figure
34:
Respondent
2:
John
K.
Knowles,
Director
of
Digital
Marketing,
Roger
Smith
.
74
Figure
35:
Respondent
3:
Arjun
Channa,
Hotel
Manager,
Starwood
Hotels,
Canada
......
75
Figure
36:
Respondent
4:
Mr.
Maurizio
Bonivento,
General
Manager
Empire
Hotel,
New
York
.......................................................................................................................
76
Figure
37:
Private
Encrypted
Technology
Solutions
.........................................................
91

14. xiv
LIST
OF
TABLES
Table
1:
Mobile
email
opens
are
significant,
on
phones
and
tablets.
..............................
10
Table
2:
Goldman
Sachs’
Global
Mobile
Commerce
Forecast,
2012-­‐2018E
$
in
billions,
except
per
buyer
...................................................................................................
12
Table
3:
List
of
Google
Analytics
App’s
Feature
................................................................
34
Table
4:
Division
of
Population
into
Mobile
Adoption
Segments
.....................................
42
Table
5:
Division
of
Population
into
Mobile
Adoption
Segments
.....................................
43

15.
1
CHAPTER
1
INTRODUCTION
“There
is
no
black
magic
to
successfully
attracting
customers
via
the
Web.”
Rand
Fishkin
Forth
Thought
Since
the
inception
of
the
mobile
phone
for
consumers
in
1973,
there
has
been
a
steady
evolutionary
change
in
the
market
for
mobile
phones
and
how
customers
interacted
with
them
on
a
daily
bases.
As
I
have
and
I
bet
everyone
have
observed
the
mobile
phone
is
no
longer
a
device
solely
used
to
communicate,
it
morphed
into
a
massively
powerful
tool
for
information
and
decision
making,
entertainment,
navigation,
photography,
gaming,
and
intern-­‐connectivity.
Truly,
it
has
changed
the
way
people
operate
and
live
in
the
twenty
century
on
a
daily
and
minute-­‐by-­‐minute
base.
The
global
climatic
shift
in
the
way
mobile
phones
touch
our
daily
lives
has
created
a
tremendous
opportunity
for
marketers.
The
walls
between
traditional
methods
of
marketing
and
digital
marketing
have
tumbled
down,
and
peering
across
the
void
we
see
that
reaching
the
customer,
wherever
they
are,
has
never
been
easier.
With
these
massive
changes
comes
a
landmark
opportunity
to
guide
marketers
to
channel,
target,
and
engage
customers
through
the
immensely
powerful
smart
phone.
Marketers
have
already
started
down
this
road
and
are
setting
up
signs
guiding
others
toward
mobile
ready
websites,
and
mobile
advertising
in
apps
and
search
engines.
However,
at
the
speed
new
technologies
are
being
created
in
the
20th
century
a
number
of
new
options
are
appearing
that
would
further
advance
mobile
marketing.
Therefore

16.
2
looking
forward,
I
impatiently
asked
the
question,
“How
are
smart
phone
going
to
be
used
to
permanently
change
the
way
marketer
reach
their
customer?”
A. Summary
of
the
Chapter
Chapter
one
is
review
of
the
literature
relevant
to
mobile
marketing.
Beginners
to
advanced
practitioners
will
benefit
from
the
detailed
review
of
this
subject.
This
chapter
starts
with
a
section
A
on
the
key
definitions
relevant
to
mobile
marketing,
then
moves
into
the
growth
rate
and
usage
of
mobile
phones
and
other
mobile
connected
devices
(section
B).
The
next
section
D
describes
the
segmentation
of
smart
phone
as
compared
to
mobile
phones
showing
the
shifting
tied
towards
multi-­‐media/web
capable
devices.
This
is
followed
by
section
F
being
growing
usage
of
tables,
such
as
the
iPad,
as
they
are
a
device
specifically
targeted
by
mobile
marketers.
Moving
away
from
the
device
towards
the
environment
the
next
section
G
examines
the
world
of
mobile
commerce
and
its
tremendous
growth
rates.
This
is
followed
by
section
H
an
review
of
worldwide
habits
of
smartphone
uses
as
they
consume
media,
shop,
play
games.
The
marketers
goal
is
to
seamless
provide
a
brand
message
across
multiple
medians,
consequently
section
I
thus
the
next
section
examines
Omni-­‐channel
retails.
Keeping
with
the
vain
of
retail,
section
J
describes
the
different
aspects
of
mobile
shopping
which
is
emerging
as
a
massive
branch
termed
mobile
retail.
Subsequently,
section
K
discusses
the
hot
areas
of
mobile
applications
“apps”
is
described
and
continues
to
redefine
the
way
brands
interact
with
consumers.
Application
analytics
starts
section
L,
as
this
is
vital
to
confirming
one’s
marketing
campaigns
and
strategies.
With
the
base
understanding
of
how
to
measure
results,
section
M
gets
very
interesting
and
describes
the
future
and
innovation
in
mobile
marketing
via
meeting
customer’s
core
physiological
needs.
Here
physiological
needs
like
instant
gratification,
goal
achievement,
social
interactions,
belonging
to
a

17.
3
community,
and
self-­‐identifications
are
related
to
new
and
innovative
mobile
technologies.
B. Key
Definitions
A
general
definition
of
Mobile
Advertising
would
be
a
form
of
advertising
that
is
communicated
to
the
consumer
via
a
handset.
This
type
of
advertising
is
most
commonly
seen
as
a
mobile
web
banner,
mobile
web
poster,
or
full
screen
interstitial
that
appears
while
a
requested
mobile
web
page
is
“loading.”
Other
forms
of
this
type
of
advertising
are
SMS
and
MMS
ads,
mobile
gaming
ads,
and
mobile
video
ads
being
pre,
mid,
and
post
roll
ads
(Mobile
Marketing
Assocation,
n.d.).
The
same
organization
defines
Mobile
Marketing
as
“a
set
of
practices
that
enables
organizations
to
communicate
and
engage
with
their
audience
in
an
interactive
and
relevant
manner
through
any
mobile
device
or
network”
(Mobile
Marketing
Association).
While
m-­‐commerce
(mobile
commerce)
is
more
of
transaction
or
revenue
based,
mobile
marketing
is
a
bigger
part
of
the
mobile
ecosystem
than
mobile
advertising
or
m-­‐
commerce.
Mobile
marketing
is
more
about
brand
building,
customer
acquisition,
engaging
customers,
starting
a
conversation,
and
creating
word
of
mouth.
In
simpler
terms,
mobile
marketing
efforts
like
mobile
advertising
and
mobile
transactions
are
increasing
the
amount
of
m-­‐commerce.
C. Key
Statistics
Related
to
the
Growing
Usages
of
Mobile
Phones
According
to
statistics
the
number
of
mobile
subscriptions
have
reached
almost
the
same
number
as
the
world’s
population
as
of
2013.
Figure
1
shows
out
of
6.8
billion
subscriptions,
more
than
half
3.8
billion
are
in
Asia-­‐Pacific
region.
It
been
estimated
that
the
global
mobile
penetration
has
reached
almost
100%;
hence,
there
would
be
slower
growth
in
the
number
of
subscribers.
The
report
suggests,
“Mobile
cellular

18.
4
penetration
rates
stand
at
96%
globally;
128%
in
developed
countries;
and
89%
in
developing
countries”
(International
Telecommunication
Union,
2013).
Figure
1:
Mobile-­‐Cellular
Penetration
in
2013
Source:
(International
Telecommunication
Union,
2013)
The
decrease
in
growth
corresponds
with
the
reduction
in
cellular
subscription
growth
rates
shown
by
figure
2.
One
problem
is
that
this
data
does
not
include
devices
like
iPads
and
Tablets,
or
devices
like
Google
Glasses
(wearable
technology)
which
also
constitute
an
increasing
number
of
the
mobile
device
market.
It
is
also
shows
that
with
the
increased
usage
of
high-­‐speed
broadband
mobile
services,
customers
can
download
and
buffer
rich
media
content
such
as
pictures,
movies,
and
games
resulting
in
a
rich
media
experience
over
the
prior
simple
non-­‐smart
phones.
Tablets
are
also
a
big
part
of
mobile
as
more
and
more
users
are
using
these
multiple
devices
in
their
daily
lives.
As
of
2014
the
hands
down
leader
in
the
category
is
an
iPad.
However,
more
android
tablets
are
being
adopted
and
they
may
surpass
Apple’s
OS
in
the
near
future
(The
Guardian,
2013).

19.
5
Figure
2:
Mobile-­‐Cellular
Subscription
Growth
Rates
2005-­‐2013
Source:
(International
telecommunication
Union,
2013)
D. The
Shift
in
the
Mobile
Phone
Devices
toward
Smart
Phones
There
are
three
categories
of
mobile
phone
devices
as
of
2014
(Nielsen,
2013).
1. Smart
Phones:
with
touch
and
non-­‐touch
screens
(Blackberry,
iPhones,
Samsung
Galaxy
etc.)
2. Multimedia
Phones:
with
or
without
touchscreens
but
it
does
not
have
an
advanced
operating
systems.
3. Features
Phones:
does
not
have
advanced
operating
systems
it
is
only
used
to
make
call
and
text
primarily
with
QWERTY
keyboard,
or
standard
123456789*0#
dial
pad.
The
world
of
mobile
advertising
is
due
to
the
advent
of
smartphones.
PC
Magazine
describes
the
smartphone
as
“A
cellular
telephone
with
built-­‐in
applications
and
Internet
access.
In
addition
to
digital
voice
service,
modern
smartphones
provide
text

20.
6
messaging,
e-­‐mail,
Web
browsing,
still
and
video
cameras,
MP3
player
and
video
playback
and
calling.
In
addition
to
their
built-­‐in
functions,
smartphones
run
myriad
free
and
paid
applications,
turning
the
once
single-­‐minded
cellphone
into
a
mobile
personal
computer”
(Pc
Mag,
n.d.).
In
other
words,
a
smartphone
is
like
a
mini
personal
computer
and
has
many
other
features
other
than
just
calling
or
simple
text
communication.
Technically
the
era
of
smartphones
began
when
IBM
launched
“Simon”
in
1993
(Microsoft
Research,
n.d.).
Experts
suggest
that
the
number
of
smartphone
users
are
increasing
in
the
world;
there
would
be
nearly
1.75
billion
smartphone
users
by
the
end
of
2014,
and
nearly
4.5
billion
mobile
phone
users
as
shown
in
figure
3
(EMarketer,
2014).
In
addition,
another
report
states
that
there
were
6.8
billion
mobile-­‐cellular
subscriptions
in
the
world
in
2013
(International
telecommunication
Union,
2013).
It
will
be
noteworthy
that
numbers
of
mobile
users
have
multiple
subscriptions
one
for
personal
and
one
for
business.
Some
businesses
even
mandate
employees
to
keep
personal
and
business
communications
separate
so
that
when
the
employee
leaves
or
are
transferred,
the
business
phone
are
transferred
to
the
new
employee
one;
also,
it
helps
companies
keep
privacy
issues
intact.
Nearly
half
of
Brazilian
and
Russian
users
have
more
than
one
mobile
phone
device
(Nielsen,
2013).
Number
of
subscribers
are
growing
four
times
fasters
than
the
world’s
population
(AT
Kearney,
2013).

21.
7
Figure
3.
Mobile
Phone
Users
Worldwide,
2012-­‐2017
(Billions,
%
of
population
and
%
of
change)
Source:
(EMarketer,
2014)
E. Smartphones
are
Becoming
More
Affordable
High-­‐end
smart
phones
were
the
highest
selling
versions
as
of
2010;
however,
with
a
total
saturation
of
the
high-­‐end
market
that
growth
has
slowed
to
replacement
phones.
Now,
as
the
cost
for
smart
phone
drops,
we
are
seeing
another
adoption
of
smart
phones
in
the
low-­‐end
market;
apple
computers
tried
to
target
this
market
with
their
IPhone
5C
but
unfortunately
it
did
not
meet
sales
expectations.
Companies
like
Wiko
and
many
other
Chinese
manufacturers
that
sell
smart
phones
for
less
than
$
100
are
increasing
in
their
market
share
in
both
developed
and
developing
countries.
The
consumers
buying
these
cheaper
versions
would
rather
buy
a
new
phone
than
a
used
high
end
model.
More
importantly,
the
move
to
smart
phones
by
those
who
previously
owned
mobile
phones
seek
access
to
social
media,
music,
and
other
attractive
features.
Another
reason
for
the
shift
to
target
the
low-­‐end
market
is
due
to
drastically
reduced
manufacturing
costs
making
lower
priced
smart
phones
profitable
at
reduced
price
points.
Manufacturers
target
the
price
sensitive
spectrum,
which
is
untouched
by
high

22.
8
end
manufacturers
like
Apple
and
Samsung.
This
market
is
especially
much
bigger
in
emerging
markets
such
as
Africa,
Asia,
and
the
Indian
subcontinent.
The
shift
toward
smart
phones
in
the
low-­‐end
segments
is
creating
an
increase
number
of
viewers
for
mobile
advertisements
and
mobile
marketing.
This
allows
for
mass
targeting
advertising
content
and
not
just
meant
for
the
upper
crest
of
society
that
had
propensity
to
buy
expensive
handsets
only.
The
Figure
4
shows
worldwide
smartphone
shipments
in
Billions
from
2011
through
the
forecasted
2018.
One
can
see
that
the
number
of
smartphones
priced
at
or
less
than
$99
has
been
steadily
increasing
since
2011
when
the
first
$99
smart
phone
was
introduced.
In
2011,
the
shipments
grew
to
90
million
(approximately)
then
rose
almost
3
times
the
following
year
to
almost
300
million
handsets
in
2012.
An
estimated
increase
to
almost
350
million
in
2014
is
projected.
Reports
have
forecasted
the
number
of
cheap
handsets
will
reach
450
million
by
2018.
On
the
other
hand,
smartphones
priced
at
or
above
$500
increased
from
2011-­‐
2012
from
250
million
to
350
million
and
then
remained
steady,
which
is
indicative
of
market
saturation
for
the
high-­‐end
smart
phones.
Forecasted
show
the
more
expensive
smartphone
handsets
will
decline
to
300
million
by
2018.
(The
Economist,
2014)
Figure
4:
Worldwide
Smartphones
Shipments
(USD
Billions)
Source:
(The
Economist,
2014)

23.
9
F. Tablets
usage
and
Marketing
“One
in
every
5
people
in
the
world
own
a
smartphone,
one
in
every
17
own
a
tablet”
(Business
Insider,
2013).
Since
tablets
can
also
be
connected
via
Wi-­‐Fi
and
GSM
technologies,
they
are
considered
a
significant
part
of
the
mobile
ecosystem.
Tablets
are
like
mini
computers
and
more
users
are
adopting
them
due
to
the
ease
of
use
and
the
mobility
factor.
More
companies
are
installing
tablets
in
the
retail
sector
as
tablets
to
improve
customer
engagement
and
operational
efficiency
(Samsung,
2013).
Tablets
are
also
responsible
for
increased
email
marketing
effectiveness
as
an
increasing
number
of
users
are
opening
emails
on
their
tablets.
“Retailers
are
now
dedicating
an
average
of
6%
of
their
search
budgets
to
search
campaigns
on
tablets.
By
the
end
of
2013,
more
than
seven
out
of
10
retailers
surveyed
said
they
will
have
phone-­‐and
tablet-­‐
specific
search
programs
in
place”
(Forrester,
2013).
Figure
5:
Mobile
Traffic
Sources
by
Device
Source:
(Forrester,
2013)

24.
10
Table
1:
Mobile
email
opens
are
significant,
on
phones
and
tablets.
Source:
(Forrester,
2013)
Figure
6:
Global
PC
(Desktop
/
Notebook)
and
Tablet
Shipments
by
Quarter
Q1:1995
–
Q1:
2013
Source:
(AOL
Advertising)

25.
11
Figure
7:
Global
Device
Penetration
per
Capita
Source:
(Business
Insider,
2013)
Figure
7
above
shows
that
how
PC
(desktops
and
laptops),
mobile
phones
and
tablets
are
increasing
their
penetrating
the
global
market,
this
is
providing
a
push
to
m-­‐
commerce.
The
rate
of
PC
adoption
(i.e.
the
slope
of
the
curve)
is
decreasing
(18%
in
2010,
19%
in
2011,
20%
in
2012
and
20%
in
2013);
however,
the
mobile
and
tablets
curves
are
rising
sharply.
The
per
capita
penetration
of
mobile
smartphone
devices
has
sharply
increased
to
22%,
surpassing
the
PC
penetration
in
2013
and
tablets
to
almost
6%,
three
times
since
2011
in
just
two
years.
Nonetheless,
tablet
penetration
is
still
small
in
comparison.
G. Mobile
Based
Commerce
M-­‐Commerce
is
becoming
a
behemoth,
the
sales
numbers
and
number
of
paid
searches
tells
the
tale.
Estimated
show
that
by
2018
mobile
commerce
will
account
for
nearly
half
of
e-­‐commerce
by
percentage
of
revenues
(Internet
Retailer,
2014).
Table
2
show
“global
m-­‐commerce
sales
reaching
$133
billion
in
2013,
and
an
expected
$626
billion
in
sales
in
2018.
In
the
US,
m-­‐commerce
will
be
more
than
triple
by
2018,
representing
$131
billion
or
32%
of
American
e-­‐commerce
sales”
(Goldman
Sachs,

26.
12
2014).
The
Goldman
Sach
2014
report
divides
the
revenues
from
smartphones
and
tablets
and
estimates
of
global
m-­‐commerce
revenues;
their
numbers
indicate
the
revenues
were
$133
Billion
in
2013
and
are
estimated
to
increase
to
$204
billion
approximately
in
2014
(Goldman
Sachs,
2014).
Table
2:
Goldman
Sachs’
Global
Mobile
Commerce
Forecast,
2012-­‐2018E
$
in
billions,
except
per
buyer
Source:
(Goldman
Sachs,
2014)
Monitoring
the
rise
in
the
use
of
m-­‐commerce
against
projections
will
be
imperative
in
determining
the
growth
in
the
mobile
advertising
industry.
Global
mobile
advertising
spending
is
forecasted
to
reach
$18.0
billion
in
2014,
up
from
the
estimated
$13.1
billion
in
2013
(Gartner,
2014);
however
another
report
indicates
the
mobile
ad
revenues
in
2013
to
be
$18
billion
which
is
followed
by
a
very
bullish
$30
billion
in
2014
(EMarketer,
2014).
This
is
a
significant
increase
in
just
one
year.

27.
13
Even
though,
mobile
advertising
is
still
catching
up
with
traditional
advertising
mediums
such
as
television
and
print,
it
is
increasing
in
leaps
and
bounds.
Google
and
Facebook
are
the
leaders
in
mobile
advertising.
These
two
giants
constitute
world’s
two
thirds
of
the
mobile
ad
market.
The
other
companies
included
Twitter,
Pandora,
Yelp!,
and
Millennial
Media
etc.
(EMarketer,
2014).
Google
is
a
major
leader
taking
the
53%
of
the
pie
with
a
distant
second
Facebook
with
just
15%;
however,
these
two
makeup
the
two
thirds
of
the
entire
market
(EMarketer,
2014).
Facebook
is
increasingly
shifting
their
strategy
to
mobile
as
more
and
more
Facebook
users
are
now
accessing
the
social
networking
site
with
their
smartphones
and
tablets.
The
company
revealed
that
almost
78%
of
the
users
of
the
social
media
site
were
mobile
(TechCrunch,
2013)
resulting
in
a
bump
in
their
stock
prices
in
2014
due
to
increase
in
revenues
from
mobile
advertising.
H. Smartphone
User
Habits
a
Worldwide
Assessment
The
usage
and
device
penetration
of
mobile,
especially
in
the
case
of
smartphones,
differs
greatly
by
regions,
countries,
and
demographics.
Smartphone
users
in
developed
or
developing
countries,
within
different
income
groups,
of
different
ages,
be
they
male
or
female
have
different
usage
patterns,
this
allows
marketers
to
segment
and
carefully
target
products
and
services
to
the
appropriate
customers/user
groups.
Users
not
only
use
mobile
devices
when
they
are
on
the
move,
as
predicted
earlier
but
68%
of
consumer’s
smartphone
usage
occurs
at
home
(Harvard
Business
Review,
2013).
It
can
be
seen
that
most
mobile
use
happens
in
the
“me
time”
of
the
consumers,
which
is
a
great
opportunity
for
marketers
to
target
advertisements
and
promotional
material.
The
“me
time”
consists
of
shopping,
self-­‐expression,
looking
for
news
and
information,
preparing
for
activities,
such
as,
a
forthcoming
travel
or
planning
holidays
etc.
and
accomplishing
productive
tasks
such
as
preparing
financial
sheets,
paying
taxes
online
etc..
(Harvard
Business
Review,
2013).

28.
14
The
rate
of
technology
adoption
among
consumers
is
speeding
up;
amazingly,
consumers
in
earlier
decades
were
slower
to
adopt
new
technologies.
“It
took
early
25
years
for
telephones
to
reach
10%
adoption
but
less
than
five
years
for
tablet
devices
to
achieve
the
10%
rate.
It
took
an
additional
39
years
for
telephones
to
reach
40%
penetration
and
another
15
before
they
became
ubiquitous.
Smart
phones,
on
the
other
hand,
accomplished
a
40%
penetration
rate
in
just
10
years”
(McGrath,
2013).
McGrath
substantiates
their
argument
with
the
understated
technology
adoption
graph
explaining
the
phenomenon
of
the
sudden
rise
of
mobile
phones.
Figure
8:
From
Telephones
to
Smartphones
–
Technology
Adoption
Lifecycle
US.
Households
by
Type
of
Phone
1900-­‐2011
Source:
(DeGusta,
2012)
Since
more
and
more
people
are
adopting
smart
phones
in
at
a
faster
pace
than
previous
technologies;
such
as,
phones
or
mobile
phones,
there
has
been
a
constant
change
in
the
way
users
are
using
their
smart
phones
devices.
It
is
imperative
for
mobile
marketers
to
understand
the
mobile
usage
pattern
and
mobile
behavior
of
users.

29.
15
There
are
many
activities
that
a
mobile
user
performs
via
their
handheld
devices
(AOL
Advertising,
2012):
To
Accomplish:
All
the
activities
a
user
does
to
feel
accomplished.
These
could
include
productivity
tasks,
scheduling
etc.
To
Socialize:
Interaction
with
people,
friends
and
family
on
social
media
apps,
messenger
services
etc.
To
Prepare:
Planning
and
preparing
for
future
and
upcoming
activities
like
on
the
calendar,
planning
trips
etc.
For
Me
Time:
The
time
spent
by
the
user
for
themselves
in
relaxing
and
entertainment
for
example
watching
movies,
trailers,
surfing
etc.
To
Discover:
Seeking
information,
news
etc.
To
Shop:
Purchasing
of
new
products
and
services,
looking
for
discount
deals
on
the
phone
To
Express:
Expressing
their
interests,
opinions
and
passions
through
mobile
devices
InsightsNow
(2012)
provided
an
in-­‐depth
analysis
of
what
people
actually
do
with
their
mobile
handsets.
The
authors
provide
information
to
marketers
and
helps
in
product
development
to
assess
what
information
to
be
targeted
to
consumers
and
how.
The
information
that
is
provided
via
companies
like
those
that
InsightsNow
are
compared
to
the
consumer
behavior
analysis
surveys
provide
from
the
traditional
advertising
and
marketing
research
analysts.
These
analysts
frequent
shopping
malls
and
physically
analyze
through
the
“observing”
technique
how
shoppers
behave
in
a
shopping
mall
and
how
products
can
be
placed
on
shelves
and
in
stores
to
increase
their
visibility
and
sales.
With
this
increase
in
mobile
usage,
brands
must
be
able
to
engage
customers
through
mobile
apps,
mobile
ready
sites,
and
mobile
optimized
advertising.
Hence,
this
detailed
analysis
narrows
down
mobile
behavior
so
that
more
companies
can
target
integrated
cross
platform
solutions
to
deliver
better
mobile
content
and
targeted
advertising.

30.
16
The
research
provided
by
InsightsNow
(2012)
was
conducted
in
three
phases:
ethnographic,
qualitative,
and
then
quantitative.
For
the
ethnographic
research,
they
recorded
on
video
and
took
notes
on
seven
days
of
select
subject
smart
phone
usages.
This
was
followed
up
with
in-­‐depth
qualitative
interviews,
which
allowed
the
researchers
to
determine
the
what,
when,
where,
and
why
those
subject
interacted
with
their
mobile
phone
during
that
seven
day
period.
For
privacy
reasons
the
content
of
phones,
texts
and
emails
was
strictly
not
recorded;
but
more
importantly,
the
time
and
frequency
of
these
activities
was
recorded.
Next,
two
separate
quantitative
studies
were
deployed,
the
first
method
gave
1000
smart
phone
users
an
in
person
survey.
This
survey
asked
questions
about
three
different
moments
in
which
they
used
their
phone
(excluding
voice
calls,
email,
and
texts).
The
second
method
respondents
agreed
to
have
their
mobile
behaviors
tracked
across
a
31-­‐day
period
using
metering
technology
provided
by
Arbitron
Mobile
Oy,
a
subsidiary
of
Arbitron
Inc.
The
combination
of
these
two
independent
studies,
the
survey
instrument
and
the
collection
of
metered
data
helped
gathering
information
on
approximately
3000
user
interactions
with
their
smart
phones.
This
captured
the
landscape
of
mobile
phone
touch
points
what
the
researchers
called
the
mobile
moments
being
the
deep
motivations
spur
by
each
moment.
On
further
segmentation,
these
mobile
moments
were
mapped
as
moment
markets
and
are
presented
in
the
figure
9
below.

31.
17
Figure
9:
Seven
Primary
Reasons
that
People
use
their
Smart
Phones
Source:
(Harvard
Business
Review,
2013)
Some
revelations
gleamed
from
this
study
made
the
researchers
realized
that
one
activity
can
be
performed
under
different
headings;
such
as,
ordering
a
pizza
falls
under
shopping
and
me
time
both
as
the
user
was
dreaming
of
eating
a
pizza
in
me
time
lead
to
the
ordering
of
pizza
in
the
shop
activity.
It
can
be
seen
from
the
figure
8
above
that
users
spent
46%
of
their
time
in
me
time
activities
that
could
include,
but
are
not
limited
to
watching
videos,
relaxing,
entertainment,
reading
gossip,
and
just
internet
surfing
for
pleasure
etc.

32.
18
The
next
most
frequent
activity
was
socializing
with
their
peers
being
nineteen
percent
of
the
smart
phone
user’s
time
or
7
hours
per
user
per
month.
The
socializing
apps
could
include
but
are
not
limited
to
social
media
applications,
instant
messenger
applications
What’s
app,
blackberry
messenger,
Facebook
chatter
etc...
The
next
most
popular
activity
was
accomplishing
(see
figure
9)
and
shopping
with
nearly
eleven
to
twelve
percent
of
their
time
respectively
spent
performing
both
the
activities.
As
we
have
noticed
that
more
and
more
people
are
shopping
their
mobile
devices,
this
number
has
been
on
a
constant
increase
and
in
2013
the
mobile
retail
officially
surpassed
online
and
PC
retail
(Internet
retailer,
2013).
The
authors
assert
“It
was
further
noticed
that
marketers
were
still
making
incorrect
assumptions
and
hence
leading
to
misleading
conclusions
about
mobile
use
and
mobile
phone
users:”
Firstly,
marketers
make
poor
assumptions
about
applications
usage:
Mobile
applications
can
be
used
for
more
than
one
purposes.
For
example,
social
media
applications
like
Facebook
can
be
used
for
me
time
and
socializing
both.
Secondly,
they
fail
to
connect
to
users
during
the
me
time.
Ads
targeted
on
the
me
time
were
seen
to
do
poorly
if
they
are
not
related
to
the
context.
Thirdly,
they
do
not
invest
enough
in
mobile
media:
“Ten
percent
of
consumers'
media
time,
but
only
1%
of
all
advertising
money
is
spent
on
mobile”
(Harvard
Business
Review,
2013).
Hence
marketers
need
to
invest
more
time
and
resources
in
mobile
media;
such
as,
video
ads,
mobile
ads
etc.
so
that
more
mobile
users
can
click
and
avail
those
opportunities.
I. The
Future
of
Shopping
and
Omni-­‐Channel
Retail
Marketers
are
also
targeting
customers
through
omni-­‐channel
retailing.
Omni-­‐channel
retailing
can
be
described
a
step
further
than
multi-­‐channel
retailing.
Multi-­‐channel

33.
19
retailing
targets
customers
via
many
channels
like
digital:
mobile,
online,
social
or
traditional
ads
via
brick
and
mortar,
TV,
tele-­‐marketing
etc...
In
Omni-­‐channel,
a
seamless
customer
experience
are
delivered
at
all
levels
regardless
of
which
channel
the
customer
buys
through.
“It
is
a
seamless,
[the]
omni-­‐channel
approach
provides
a
single,
unified
experience
for
the
customer
across
all
channels”
(Accenture
,
2013).
As
the
new
customers
are
more
empowered
via
the
instant
information
and
knowledge
at
their
fingertips
via
smart
phone
a
dramatic
shift
in
the
way
traditional
shopping
is
occurring
is
underway.
This
make
delivering
the
same
or
omni-­‐channel
experience
that
much
more
important.
It
has
been
discovered
that
initially
the
companies
had
a
great
deal
of
control
over
the
consumer’s
decision
making
process
while
making
a
purchase
decision;
however,
with
the
advancement
of
technology
that
has
empowered
customers,
marketers
now
have
a
diminished
amount
of
control
and
access
to
the
customer’s
decision
making
process.
With
analytics
data
companies
can
only
analyze
and
track
how
the
customers
are
making
a
purchase
decision
but
as
said
their
influencing
it
at
any
stage
is
greatly
reduced.
The
understated
figure
10
describes
The
Non
Stop
Customer
Experience
Model
vs.
the
traditional
one
(Accenture
Outlook,
2012).
Their
model
expands
on
the
consumer’s
decision
process
for
purchasing
by
moving
away
from
the
archaic
linear
model
(Discover
–
Consider
–
Evaluate
–
Purchase)
and
instead
uses
new
feedback
loop
model.
The
linear
model
was
introduced
before
mass
information
technology
where
consumers
had
limited
access
to
information.
Traditionally,
consumers
purchase
decisions
were
usually
more
straightforward
with
less
outsider
influencers
in
the
decision-­‐making
process.
However,
with
social
media
technology
and
other
digital
channels
the
customer’s
purchase
process
is
non-­‐linear
and
much
less
influenced
by
the
marketer’s
influences.
Consequently,
in
today’s
world
there
is
no
long
a
mainline
for
influencing
the
consumer
via
the
marketer’s
messaging,
as
the
access
to
information
via
the
consumers’
smart

34.
20
phone
from
more
trusted
sources
provides
more
influential
information
for
making
their
purchase
decisions.
Figure
10:
The
Non-­‐Stop
Customer
Experience
Model
Source:
(Accenture
Outlook,
2012)
The
following
can
be
said
for
the
new
non-­‐Stop
customer
experience
model
(Accenture,
2013):
• Customer’s
journey
is
more
dynamic
• Customer’s
journey
is
more
accessible
• Customer’s
journey
is
continuous
and
“always
on”
Ridby
2011
states
the
following:
“E-­‐commerce
is
now
approaching
$200
billion
in
revenue
in
the
United
States
and
accounts
for
9%
of
total
retail
sales,
up
from
5%
five
years
ago.
The
corresponding
numbers
are
about
10%
in
the
United
Kingdom,
3%
in
Asia-­‐Pacific,
and
2%
in
Latin
America.
Globally,
digital
retailing
is
headed
toward
15%
to
20%
of
total
sales,
though
the
proportion
will
vary
significantly
by
sector.
Moreover,
digital
retailing
is
now
highly
profitable.
Amazon’s
five-­‐year
average
return
on
investment,
for
example,
is
17%,
whereas
traditional
discount
and
department
stores
average
6.5%.”

35.
21
Omni-­‐channel
retailing
presents
the
opportunity
of
an
integrated
sales
experience
that
is
benefitting
both
the
consumers
and
the
retailers
with
the
information-­‐rich
and
a
highly
price
competitive
shopping
experience.
Customers
are
now
browsing
products
online,
with
a
reference
point,
they
are
better
at
spotting
deals
for
product
at
brick
and
mortar
store,
they
are
asking
for
reviews
from
friends
on
social
media
via
their
smartphones,
and
are
making
a
purchases
via
the
iPad
or
tablet.
This
is
an
“a-­‐typical”
modern
shopper
that
wishes
to
review
the
same
shopping
cart
with
the
third
or
now
in
future
the
fourth
screen,
which
could
be
a
wearable
technology
like
Google
Glass,
or
Apple’s
iWatch.
The
importance
of
a
seamless
brand
experience
across
all
channels
does
not
only
help
increase
sales
it
but
also
increase
brand
equity
and
perception
in
the
eyes
of
the
consumers.
It
is
important
to
integrate
all
digital
channels
being
offline
physical
channels
with
that
of
the
digital
online
channels.
If
a
customer
tries
a
product
in
a
store’s
isle,
he
should
be
able
to
add
that
to
a
wish
list,
then
make
a
click
to
purchase
action
online
later
maybe
when
they
are
more
compelled
or
have
available
funds.
Even
after
physically
interacting
with
a
product
stores
should
provide
online
and
offline
promotions
to
induce
a
purchase,
or
even
allow
cross-­‐stores
prices
comparisons.
It
is
vital
that
various
activities
performed
both
offline
and
online
are
integrated
at
all
levels;
this
includes
backend
and
frontend
of
the
supply
chain.
At
the
back-­‐end
the
online
and
m-­‐commerce
stores
must
be
integrated
to
the
supply
chain
of
the
physical
brick
and
mortar
so
that
the
systems
would
know
no
matter
what
sales
channel
is
being
used
how
much
inventory
of
a
particular
products
is
available
at
a
particular
time.
With
this
technology,
the
advantages
of
both
shopping
online
and
offline
can
be
merged.
The
benefits
of
shopping
online
are
many
and
include:
rich
product
information,
being
customer
reviews
and
tips,
editorial
and
advertorial
content,
user
generated
content,

36.
22
coupons
and
promotions,
social
media
two
way
dialogue,
option
of
a
convenient
and
one
click
checkout
and
most
importantly,
the
convenience
of
anytime
anywhere
access.
And
with
a
smart
phone
all
of
these
benefits
are
available
at
their
fingertips
making
it
easy
for
them
to
compare
prices
and
products
and
immediately
asking
for
opinions
from
peers,
share
pictures
on
social
media,
and
click
through
store’s
product
information.
One
must
not
neglect
the
major
benefits
of
shopping
at
brick
and
mortar
(B&M)
stores
such
as:
instant
in
store
pickup,
helpful
sales
personnel
with
their
detailed
knowledge
and
experience,
customization
options,
handpicked
items,
or
selective
assortment
of
products
according
to
location.
Most
importantly,
B&M
stores
offer
the
ability
to
physically
test
and
try
products
which
for
many
items
is
vital
(think
couches),
walk
in
returns
and
or
replacement,
instant
gratification
of
purchase,
and
enabling
impulse
shopping
by
enticing
store
windows
el
al
(Bibliography:
Future
of
Shopping
2HBR).
With
omni
channel
retailing
all
the
advantages
of
B&M
can
be
merged
and
neither
the
consumers
nor
the
retailers
has
to
accept
trade
off
benefits
of
one
or
the
other.
The
only
task
would
be
for
companies
to
hire
the
technological
talent
that
could
develop
and
replicate
offline
shopping
experiences
online.
However,
some
have
noted
a
technophobic
culture
that
permeates
many
retailers,
and
young
computer
savvy
employees
refuse
to
work
at
such
places.
On
the
other
hand,
the
modern
consumers
are
very
adaptive
and
appreciative
of
technology
and
new
mediums
that
bring
“coolness”
and
convenience
to
their
modern
lifestyles
so
why
should
retail
fight
against
something
the
consumer
wish
for
like
the
move
toward
an
omni-­‐channel
experience?
Rigby
states
there
are
four
reasons
retailers
are
not
as
receptive
to
e-­‐commerce,
m-­‐
commerce,
or
the
whole
omni-­‐channel
phenomenon
(Rigby,
2011).
Firstly,
retailers
are
wary
of
hypes
and
booms
example
is
the
dot
com
bubble
of
2002.
Retailers
are
careful
about
new
phenomenon
that
are
wildly
optimistic
or
overpriced.
Since
digital
is
fairly
new
and
still
growing
in
adoption,
many
companies
are
over
cautious
in
dedicating
too

37.
23
much
timely
or
financial
resources
especially
after
many
were
burnt
by
the
dot
com
bubble.
The
metrics
for
measurement
of
digital
marketing
in
online
and
mobile
are
still
nascent
and
not
universal;
hence,
calculations
for
return
on
investment
(ROI)
can
vary
extremely.
There
can
be
large
differences
in
the
way
digital
advertising
agencies,
companies,
and
search
engines,
and
digital
publishers
calculate
ROI.
A
perfect
marriage
is
to
use
measurement
metrics,
which
are
best
able,
allocate
budgets
and
award
incentives
for
maximum
output.
The
process
is
still
evolutionary
and
will
take
few
more
years
to
get
cemented
and
could
be
a
Ph.D.
dissertation
in
itself.
Amazingly,
digital
retailing
threatens
existing
B&M
economics,
system
and
incentives.
Since
traditional
retailing
has
been
in
place
for
more
than
a
century,
measurement
metrics
are
fairly
set
and
cemented.
These
metrics
do
not
match
the
online
world
at
all.
For
example,
usually
commissions
in
traditional
retailing
are
up
to
20%-­‐30%
and
when
this
is
applied
to
the
online
or
mobile
commission
base,
the
system
completely
fails.
The
ticket
value
of
items
purchased
online
especially
through
mobile
is
usually
much
low
due
to
their
volume
based
business
models
and
lower
respective
overhead.
Hence,
commissions
are
usually
much
lower
but
purchase
frequency
and
online
traffic
is
much
higher.
The
e-­‐commerce
giant
Amazon
pays
4%
to
a
maximum
of
8.5%
to
all
its
affiliates
and
partners
(Amazon,
n.d.).
Since,
traditional
retailers
are
more
set
in
their
ways
and
new
generation
customers
like
the
millennials
are
moving
towards
mobile
shopping,
traditional
retailers
will
have
to
move
towards
Omni-­‐channel
retailing
as
soon
as
possible.
One
may
be
interested
to
know
that
traditional
retailers
tend
to
focus
on
financial
metrics,
which
are
incompatible
with
online
measures.
Retailers’
stock
prices
are
generally
by
return
on
invested
capital,
sales
per
square
foot,
and
growth
rather
than
by
profit
margins.
“Amazon’s
five-­‐year
operating
margin
is
only
4%—far
below
the
6%

38.
24
average
for
discount
and
department
stores;
but
with
faster
inventory
turns
and
no
physical
store
assets,
Amazon’s
return
on
invested
capital
is
more
than
double
the
average
for
conventional
retailers.
As
a
result,
Amazon’s
market
value,
$100
billion,
is
roughly
equivalent
to
that
of
Target,
Best
Buy,
Staples,
Nordstrom,
Sears,
J.C.
Penney,
Macy’s,
and
Kohl’s
combined”
(Rigby,
2011).
Hence,
the
online
and
traditional
retail
works
completely
on
a
different
measurement
system.
Finally,
conventional
retailers
have
not
had
great
experiences
with
breakthrough
innovation.
Traditional
retail
will
face
extreme
pressures
from
online
retailers
if
they
do
not
adopt
omni-­‐channel
strategies.
The
view
by
retailers
that
customers
would
always
come
if
the
store
doors
were
open
is
simply
not
true.
The
over
demanding
customers
who
need
an
integrated
and
modern
shopping
environment,
also
demand
a
better
B&M
retail
environment;
such
as,
information
about
products,
shorter
checkout
lines,
more
convenient
billing
systems
etc.
J. Mobile
Shopping
More
than
44%
of
the
consumers
are
using
their
smart
phone
devices
to
make
purchases.
Even
when
they
are
not
purchasing,
they
are
using
their
devices
to
comparing
prices.
This
has
led
to
a
phenomenon
called
“show-­‐rooming”
when
a
customer
goes
to
a
B&M
store
but
actually
makes
a
purchase
online
(through
mobile
or
tablet)
after
seeing
the
product
in
the
shelf.
Show-­‐room
is
finding
a
cheaper
price
on
the
web,
and
amazingly
about
36%
of
mobile
shoppers
go
online
while
they
are
making
purchases
in
store
(Margarita
Constantinides,
2013).
With
this
information,
one
can
assert
that
smart
phones
are
becoming
an
important
tool
in
the
lives
of
the
customers,
which
is
a
notable
shift
in
the
purchasing
behavior
of
the
customers.
Mobile
users
also
share
information
through
social
media
about
their
purchases
or
look
for
items
on
social
media
on
websites
such
as
“pinterest”
and
“instagram”
to
find
promoted
items
offline,
in
stores.

39.
25
This
integration
of
offline
and
online
retail
has
been
a
breakthrough
in
combining
marketing
technologies.
Companies
like
Walmart
and
Macy’s
have
mobile
apps
where
the
users
can
turn
on
“store
mode”
and
get
offers
from
the
Wi-­‐Fi
system
as
they
pass
by
different
sections.
They
receive
offers,
discount
coupons,
loyalty
points,
and
welcome
messages.
However,
this
can
be
performed
through
either
Bluetooth
(low
energy
Bluetooth
or
BLE)
technologies
used
by
many
retailers
where
the
mobile
phone
users
have
their
Bluetooth
turned
on
or
by
Wi-­‐Fi.
Low
energy
Bluetooth
technology
is
the
latest
and
more
targeted
technology
because
users
is
in
a
very
specific
range,
say
a
particular
isle
of
the
store
receive
a
signal
as
compared
to
the
Wi-­‐Fi
which
is
for
the
entire
store
or
floor
(VeriFone,
2013).
Low
energy
Bluetooth
requires
installing
“beacons”
or
small
physical
devices
in
various
parts
of
the
store
and
then
as
the
customer
passes
by
they
receive
a
specific
targeted
coupon,
message,
or
information
about
the
particular
section.
There
are
many
kinds
of
beacons
available
in
the
market
but
as
of
2014
there
are
few
limitations
associated
with
this
kind
of
technology.
Firstly,
mobile
users
may
not
have
their
Bluetooth
turned
on
as
it
consumers
battery
and
it
is
less
popular
technology
to
Wi-­‐Fi.
Secondly,
the
purchase
of
a
large
number
beacons
for
each
stores
and
malls,
as
a
whole
can
be
an
expensive
proposition
especially
for
a
technology
in
the
trial
stages.
Finally,
the
beacons
work
on
batteries
and
replacement
of
batteries
or
beacons
themselves
after
a
limited
period
can
be
an
additional
expense
and
hassle.

40.
26
Figure
11:
Advertisement
Offering
delivered
via
a
RFID
Beacons
and
Smartphones
Source:
(Swedberg,
2013)
One
should
note
that
in
addition
to
customers
being
empowered
by
technology,
the
storeowners,
store
managers,
and
sales
associates
are
also
empowered.
Sales
associates
now
carry
iPads
like
seen
in
the
“Genius
Bar”
at
the
Apple’s
stores,
which
are
connected
to
the
point
of
sale
systems
allowing
for
on
the
spot
purchases.
Further,
this
allows
store
managers
or
supervisors
to
monitor
in
real
time
the
effectiveness
of
sales
associates.
It
is
a
complete
360-­‐degree
solution
can
be
provided
at
retail
outlets.
There
are
more
techniques
that
can
help
retailers
integrate
mobile
and
M&B,
increasing
their
share
of
customer’s
wallet
and
allowing
to
integrating
more
into
the
customer’s
purchasing
lifecycle.
For
example,
Walmart’s
apps
have
set
reminders
on
mobile
for
refilling
pharmacy
prescriptions
and
customers
can
walk
in
and
scan
the
QR
codes
for
pick-­‐ups
for
medicines
(Margarita
Constantinides,
2013).
Further,
brands
like
Kate
Spade
have
taken
technology
in
retail
to
a
new
level
buy
replacement
of
paper
prices
and
product
information
labels
with
iPads.
The
replacement
of
paper
signs
that
display
price
information
for
products
with
iPads
with
much
more
information
about
the
clothes
or
BLE
Beacon