Commerce Weekly: Predicting 2013

Industry executives predict commerce trends, mobile shoppers are Apple users, and the genius of the barcode.

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Here are a few stories that caught my attention in the commerce space this week.

Predicting the 2013 commerce space

As 2012 wraps up, industry executives are looking ahead to what 2013 might bring. In a report at eCommerceBytes, executives at e-commerce and Internet service company Rakuten pulled together five trends to watch in 2013, including increased use of video on e-commerce sites; a market shift toward specialized retailers, both brick-and-mortar and online; and the advent of curated commerce, or “shopping for a lifestyle” as opposed to shopping for individual items.

Executives also highlighted mobile integrations, noting that they expect an increase in in-store integration via apps, QR codes and augmented reality. Predicted trends also included a change in the way consumers pay: “Services like PayPal and Apple’s iTunes have already begun to centralize payments on mobile, but the next step will be services such as Square that offer sellers the ability to receive card payments with their existing smartphone and a simple plug-in device,” the report says.

PayPal president David Marcus also took a look ahead. He sees cash registers going mobile, with customers able to pay from the store aisle or even the changing room, and predicts location-aware and context-relevent shopping and payments will be more disruptive than many now expect. In the payment space, he sees mobile wallets, consumer loyalty programs and coupon platforms merging into one efficient and convenient business. He also predicts NFC will die a slow death in 2013: “it’s not solving a real consumer problem,” he writes at the PayPal blog, “and it’s not providing additional value to encourage me (or anyone else, for that matter) to change my behavior.”

In related news, Square COO Keith Rabois pulled together some predictions for what consumers and retailers can expect from Square in 2013. In an interview with CNET’s Daniel Terdiman, Rabois said Starbucks’ customers haven’t seen anything yet, that they can “expect full Square Wallet functionality” in 2013 as well as new features and “major enhancements” — Rabois said Square’s partnership with Starbucks is in its “first inning.”

Rabois noted, however, that Square is just the beginning, that “anything new that’s developed in the coming months will also be rolled out for use at every single merchant that’s part of the Square Wallet program” and that additional retail partnership announcements can be expected in the coming year. Looking further ahead? “Rabois said that the company envisions Square Wallet working ‘everywhere,'” Terdiman reports, “from personal trainers to interactions between friends to contractors working people’s homes.”

Apple users dominate Android’s on the mobile shopping front

Bill Siwicki, managing editor at Mobile Commerce, tallied up the mobile shopping habits of Apple versus Android users and concluded that Apple users are more valuable “by a mile.”

Looking at data from a few retailers as examples, Siwicki reports that at e.l.f. cosmetics, “78.59% of mobile sales stemmed from an iOS device while only 20.74% came from an Android device” from Oct. 1 through Dec. 16. Of those sales, the iPhone accounted for 27.48% and the closest Android smartphone competitor chalked up a mere 0.78% of mobile sales. At web-only jeweler Ice, 22.5% of traffic is mobile and more than 70% of that is via an Apple device, and at Wine.com, more than 90% of mobile sales come from Apple devices, Siwicki reports.

Siwicki points out that when looking at these numbers, it’s important to note that Android’s market share far outpaces Apple’s in smartphones — 52.5% and 34.3% respectively, according to research firm eMarketer Inc. — and that Apple’s iPad owns 76.4% of the tablet market.

Shedding some light on the situation, Kevin Edwards, strategy director at Affiliate Window, noted to Siwicki that “Apple users are typical early adopters,” and that “[t]hey’re generally tech-savvy individuals who embrace new ways of interacting and transacting online.” HauteLook CMO Greg Bettinelli told Siwicki that of their mobile transactions, tablets trump iPhones by 50%. “If we make $2 for every person on an iPhone,” he said, “we make $2.50 for desktop users and $3 for iPad shoppers.”

You can read Siwicki’s full report here.

What mobile payment platforms can learn from the barcode

In the wake of barcode creator Norman Joseph Woodland’s death last week, Drake Bennett and Jim Aley put together a piece on the history of the barcode and how it has become “so prevalent that it is almost invisible.” Bennett and Aley note that at its inception, the barcode had its competitors, and that there’s a lesson to be gleaned from the barcode’s ultimate success — especially for mobile payments.

Bennett and Aley boil the success down to three overarching “essential ingredients”: the technology must be simple and its benefits must be obvious, there needs to be a governing body to keep everyone in line, and there must be “[a]n extravagant, surprising, and often expensive effort to ‘seed the market.'”

As for current mobile payment platforms that are measuring up, Bennett and Aley say Square is “one of the more interesting” and break down its performance against the “essential ingredients”:

“Simplicity? Check: It’s a small plastic square that plugs into an iPhone or iPad. A splashy move to dominate the market? Last month Square announced a deal to be in 7,000 Starbucks (SBUX) across the U.S. Strong consortium or governing body? A tangle of competing alliances is more like it. Two out of three, so far, for Square.”

Commerce Weekly will return January 3, 2013 — have a safe and happy holiday!

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