Mobile Fix: Robo-pricing, mobile sites and the “mobile wallet”
Simon Andrews, founder of the full service mobile agency addictive!, on the increasing prevalence of the “vertical stack”…
The Amazon empire
The news this week is that the rumours surrounding the Amazon smartphone are back and appear substantial – the Wall Street Journal claims it is being tested right now.
Interestingly (especially after our thoughts last time around on size and whether it matters), the screen size is rumoured to be between four and five inches, much like the latest Samsung Galaxy.
We are convinced that this will happen as the logic of the vertical stack means that Amazon can’t afford to rely on other people’s hardware. Its success with tablets – and role as a major retailer of phones – will give it a lot of learning.
The Financial Times has taken a good look at Amazon over the past week or so and there are a number of articles worth reading. Most interesting of all was the fact that Amazon can make more money facilitating a sale by someone on its marketplace than from selling the item itself.
With its ability to provide all the back-end functionality of a business, from hosting to database and just about everything else, all a business needs to concern itself with is pricing. Here again technology is making huge changes with various people supplying tools that allow sellers to automate their prices – called robo-pricing.
These tools owe a lot to stock market systems and enable sellers to set their price to always be $1 cheaper than rivals or at the right price to obtain a prominent position on the site.
However, rather like the stock market tools can and do go wrong, so do these – famously once charging $24 million for a genetics book called Making of a Fly. Delivery was extra, but something of a bargain at a mere $3.99. Neil Perkin recently wrote an excellent blog post about how robo-pricing is being used in e-commerce – telling the story of how Orbitz has been charging Mac users 30% more for hotel rooms.
Last week we looked at how retailers were looking at store pick up as a way of countering e-commerce pureplays and mentioned a rumour suggesting that Amazon could bid for Royal Mail. In the US, we learn they are adapting their model to speed up delivery to counter the one advantage stores have – instant gratification.
As US states try to protect their retailers by demanding that Amazon pays local sales taxes, Amazon has agreed in New Jersey, subject to the state backing two new distribution centres.
It now has 34 across the US and is looking to make same-day deliveries. With distribution centres closer to the customer, innovative ways of speeding up its internal processes and clever solutions to home delivery, Amazon wants to re-invent businesses like Kozmo, where e-commerce was combined with delivery within an hour.
One last thing on Amazon: it is developing tools for game developers that motivate them to develop for Amazon hardware – more evidence of the vertical stack.
HTML5 mobile websites
While around 80% of brand websites are effectively closed to mobile visitors, we are starting to see smart brands making the investment in developing a mobile website. Given that the outlay can be quickly recouped through the value unlocked in mobile search alone, we expect this trend to (finally) accelerate.
Twitter has shared the work it did on developing a mobile-optimised site and Google continues to educate, with a look at responsive design versus a mobile website.
One of our projects for Hearst magazines has just gone live – a mobile site for Men’s Health built using all the good stuff such as HTML5, CSS, JQuery and more.
The tech is the least important piece, however – the site solves a business problem (lots of mobile visitors weren’t well served and couldn’t be monetised) by solving a consumer one (I need tips and info around men’s health and exercise while I am out and about).
Mobile money
It looks likely that the EU is going to approve Project Oscar, the partnership between mobile operators to provide a mobile wallet, which means that we could see a launch later this year.
We are still unconvinced that payment is the silver bullet many think it is. The more we learn about Apple’s Passbook the more we think the context it will deliver (through aggregating loyalty cards and tickets) is the really valuable prize. Adding payments into Passbook seems inevitable, which makes rival wallets appear a little anaemic.
It is clear that mobile money is moving past the theory stage and new players are entering the market. European Square competitor iZettle has launched in the UK with Mastercard, Amex and Diners as partners. No Visa as yet, which may be because Mastercard (along with Carphone Warehouse owner Charles Dunstone) is an investor in iZettle, but we can’t believe that they are going to be far behind.
The operators fight back
Project Oscar is evidence that the operators do want to create services for their customers and compete with GAFA – and Telefonica is probably in the lead with its Telefonica Digital business. Within this team it has agreed to launch a smartphone in partnership with a browser from Mozilla, which could help the movement to web apps from native apps. Initially focused on Latin America, we can expect this in other regions if successful.
And TUme, the Spanish mobile social network Telefonica bought last year is launching in the UK. Offering free texts and calls for all O2 iPhone customers, this should be interesting to watch. Can an operator leverage its customer base to build a market for its own services?
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