Mobile Technologies are beginning to Dominate the Digital Path to Purchase

Stephen DeAngelis

July 01, 2014

A couple of years ago Thomas Husson, a Principal Analyst at Forrester Research, wrote, “Few companies can now rely on a standalone mobile business model and … most mobile business models remain unproven.” [“The Mobile Revolution Will Extend Your Business Model Faster Than The Web Did,” Forbes, 19 November 2012] The headline from his article clearly indicated, however, that he thought the situation was about to change. He explained:

“Mobile has the potential to be more disruptive than the Web. The mobile revolution will inevitably transform your business in the next decade, too — not because mobile will generate massive direct revenues but because it will trigger a more radical transformation toward systems of engagement. Mobile engagement empowers people to take the next most likely action in their immediate context and in their moments of need.”

He was right. In a post entitled “The Growing Importance of Mobile Tech on the Digital Path to Purchase,” I cited a recent survey from xAd and Telmetrics that concluded, “Mobile is now dominating the consumer purchase decision process.” This shouldn’t be too surprising. Jon Morris reports, “By the end of 2013, there will be 1.4 billion smartphones worldwide. This staggering number helps to justify why mobile search will outpace desktop search in a few short years.” [“How to Dominate Mobile Marketing,” Inc., 23 August 2013] The xAd and Telmetrics study concluded that consumers already spend more than 50% of their online time on mobile devices. Supply chain analyst Lora Cecere has argued for years that new technologies are going to radically change retail operations and only demand driven, customer-centric, outside-in approaches are going to be able to meet the challenges that this technology revolution is going to usher in. Part of the technology revolution involves the use of artificial intelligence (AI) in mobile systems. By now people are fairly familiar with personal assistants like Siri and shows like the Oscar-winning film “Her,” in which the character played by Joaquin Phoenix falls in love with his smartphone’s artificial intelligence personal assistant named Samantha (voiced by Scarlett Johansson). The use of personal assistants is going to become more prevalent in the years ahead.

Mobile AI systems enhance the engagement discussed by Husson by opening up a myriad of new opportunities for public and private organizations. Saroj Kar writes, “The future of technology is a sea of opportunity for artificial intelligence and application development, especially for mobile devices.” [“Ambient Intelligence: Sensing a Future Mobile Revolution,” SiliconANGLE, 7 March 2013] Kar believes that a specific type of AI is especially viable. He explains:

“When it comes to an optimal use of AI in the mobile realm, we’ll also have to consider ambient surroundings. The term called Ambient Intelligence (AmI) was coined by the European Commission. AmI in smartphones would be classified as an envisaged environment, which is unobtrusive, interconnected, adaptable, dynamic, embedded, and intelligent.”

Kar insists that “the scope for ambient intelligent services is much larger than the personal level” and that they could play a vital social role. “Anticipatory mobile computing has the potential to reach millions of users via services such as commercial, public safety, planning, forecasting and research, and health monitoring,” Kar writes. And, of course, there are business opportunities as well. Lars Hard, CTO and founder of Expertmaker, told Kar:

“I think that in the initial stages, of course it will be a different enterprise system – something selling products. And I think we’ll see more creativity coming from this space down the road because interest is so huge for those that already have data. They may have digital products too, which is even better because you can model and play with it better, put it into a predictive model. A huge competitive edge is the quality on how you bring products to customers … by allowing AI to help create models and new user experience, you help with discovery and exploration. It’s enormously beneficial for everyone.”

Kar concludes, “The opportunities are immense and future apps will have increased precision and relevance, become more personal, and enable the use of many more information sources and to link to other devices or apps, and allow more adaptive user experience.” Venkat Atluri and Shekhar Varanasi point out that the opportunities aren’t only connected to smartphones per se but to adjacent devices as well. “Now established as a successful example of technology that has changed the way people interact with the world,” they write, “the smartphone continues to push the boundaries of personal connectivity by fast becoming a hub for an array of rapidly evolving and equally intelligent ‘adjacent’ devices with specific, enhanced utilities.” [“Beyond smartphones: Assessing adjacent devices,” Telecom, Media, & High Tech Extranet, 26 March 2014 (registration required)] They continue:

“Several newly emerging adjacent devices feature completely new form factors and utility, while others act as extensions of existing devices, enhanced by connectivity and sensor processing. While wearables such as FitBit and JawBone have been on the market for over three years, newer entrants in eyewear and watches continue to push the boundaries of user interaction and raise the bar on inter-device communication. Smarter performance tracking sensors, for example, are now also being integrated into clothes and accessories for use in athletics and ‘consumable’ medical devices, such as ingestible and tissue-enabled sensors, are being developed to make accurate remote diagnostics a reality.”

In addition to providing consumers with new channels through which to buy things and with new experiences, mobile technology is changing the way that consumers are paying for products and services (especially in the developing world). In a recent Bloomberg BusinessWeek article, Charles Graeber describes how he managed a 10-day journey through Kenya using only a smartphone that he bought at the airport and “M-pesa (M, for mobile; pesa is payment in Swahili).” [“Ten Days in Kenya With No Cash, Only a Phone,” 5 June 2014] Mobile payments are simply another reason that mobile technology has incited a revolution. Ewan Duncan, Eric Hazan, and Kevin Roche report, “Consumer behavior is rapidly changing, with ‘digital’ activities growing rapidly in every sphere. [“Digital disruption: Evolving usage and the new value chain,” Telecom, Media, & High Tech Extranet, 14 August 2013 (registration required)] They continue:

“In the US, nearly half (48 percent) of all the video viewed is now either ‘time-shifted’ (using DVRs or video on demand) or ‘device-shifted’ (from television sets to laptops, tablets, or mobile phone screens). Music is even more digital, with just over two-thirds of usage from streaming services, MP3 files, and satellite radio, leaving traditional AM/terrestrial FM radio with a mere 32 percent share. On the communications front, mobile phones have overtaken landline voice, even among consumers aged 55 to 64. These changes in user behavior have and will continue to disrupt existing industry value chains and economics, creating many opportunities and risks for stakeholders.” They conclude, “The digital platform is growing rapidly in importance in the areas of communications, entertainment, and retail. Regardless of the industry, a nuanced understanding of customer preference and a business model aligned with these insights will be necessary for most organizations to prosper in an all-digital world.”

We may never really achieve “an all-digital world,” but we’ll come close enough to make it seem that way. If your organization hasn’t joined the digital revolution, it’s already a lap behind in the race for success.