Apps: The End of Browsing Freedom

Have no fear, apps are here!

Searching for an obscure website on Google will soon be part of the past. Studies show we are moving towards a world of mobile Internet. Mobile data—going through smartphones and tablets—is shifting from browsers to apps. Soon, apps will dominate Internet traffic…but don’t take my word for it. Let’s look at the data.

Internet Traffic is Going Mobile

According to Cisco’s Virtual Networking Index Study:

“Last year’s mobile data traffic was nearly 30 times the size of the entire global Internet in 2000.”

 In 2014, the number of mobile devices and connections reached 7.4 billion. Today, there are more mobile connected devices than people on Earth.

Global Mobile Devices and Connections Growth

Source: Cisco VNI Mobile, 2015

 

Apps are Dominating Mobile Internet

 In the figure above, we see that laptops are on the decline, while smartphone growth is exploding. Now that we know mobile devices appear to be the dominant form of accessing the Internet in the foreseeable future, let’s take a look at mobile Internet traffic trends.

Data from Nielsen shows that apps account for 89% of media consumption on smartphones, while only 11% goes through mobile browsers.

Source: Smart Insights, 2012

Implications of an App-Centered World

We’ve seen the exponential growth of mobile devices compared to traditional laptops and how Internet traffic on these mobile devices is primarily via apps. With these trends pointing to a future dominated by mobile applications, it’s hard not to ponder how that will impact larger technological trends.

The following are my 3 predictions for the future of an app-dominated Internet:

  1. Smart watches, phones, cars, TVs, and houses will tip the scale towards an app-only experience. With all computing devices running apps, operating systems will focus on integrated applications that don’t require a browser. Microsoft and Apple will push hard to cut Google’s search out of the user experience by redirecting traffic through apps with functions such as voice control/Siri. Eventually, developers will focus on apps rather than standalone websites.
  2. Governments will push to end “free browsing” in order to stop illegal activity, copyright infringement, and child pornography. With all traffic moving through apps, content can be more easily monitored and blocked.
  3. With all Internet activity directed through apps, the stage will be set for world domination by artificial intelligence robots. All hail Siri.

By: George Gonzalez


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Paper Checks in the Digital Century

Paper Checks in the Digital Century

A Brief History:

Checks are believed to be one of the oldest forms of non-currency payment in human history. Ancient Romans used checks in the first century B.C, and there is evidence of usage in the Persian empire of financial instruments referred to as a ‘Chak’. In the US, checks reached their peak usage in the 1970’s, when an estimated 85% of all non-cash retail payments where completed using checks1. While decreasing in popularity with the expansion of plastic cards and ACH’s, checks still remain a commonplace item in the modern financial world.

A Move Towards Digitalization

The ability to deposit a check via a phone, dubbed ‘Remote Deposit’ or ‘Mobile Deposit’, was created as a part of the “Check-21” regulation in 2004 that allowed for banks to send electronic versions of a check. While the regulation was aimed at allowing banks to more cheaply process checks, this regulation also allowed customers to send the same ‘digital’ images of checks to banks (2004). Combined with improvements in mobile phone technology, the first such application was launched by USAA in 2009.

The Competitive Dynamics

Remote deposits emerged as a way for smaller banks or banks without national branch networks to compete. Banks such as USAA, Ally, and then ING-Direct (now Capital One 360) needed a way to better engage with customers. Before this, customers had to either send a check in the mail, or send an ACH through their main bank to get their money to the online bank. Since those two methods are time-consuming, remote deposits offered a more convenient option for customers that also cut out their reliance on major banks.

It also became a new way for the major banks to have more digital servicing for their customers and lower their costs associated with their national banking networks. Banks can reduce the need for staff to process low value check deposits, and can focus their time on performing more value-add services. Average teller transactions dropped from 25% from 2008 to 2013 – and are expected to decline even further in the near future.

Results: As of 2014, 11% of checks were deposited using Remote Deposit2

Should you add this feature to your banking habits?

Upsides: The whole operation takes around a minute to do. The user must take a picture of both sides of the check and type in the dollar amount.

  • Can save a trip to the bank or ATM
  • It’s free. Only 1 bank in the Pew report charged a fee 3,4

Downsides

 Banks have longer hold times on the money due to increased fraud risk

  • Most banks have a maximum value of check you can deposit via this method ($5K – $10K)
  • There are monthly limits on total checks deposited through Remote Deposit.
  • Doesn’t scale with multiple checks. If you have 10 checks, you have to take 20 pictures.

 So if you are customer who receives a couple of small checks every once-in-a-while (holiday, birthday), this is a great way to avoid the hassle of visiting a bank.

If you are customer with a large stream of checks, this service currently won’t help you much, unless you are nowhere near your current bank and don’t mind scanning check after check into your phone. Also, the slower funds availability time might not appeal to customers that need the money right away. As of now, you may need to continue to use your local bank or ATM to deposit checks.

What does the future likely hold?

What seems like a fantastic innovation a few years ago is now table steaks. Over 75% of financial institutions now offer this feature, and the point of differentiation has been erased. As banks become more comfortable with the fraud risk, we may see some incremental changes like removal of the current limits or a quicker experience taking photos. But don’t expect this feature to ever gain a dominant market position. This feature currently does not support small business users or customers with frequent check usage well – who will continue to use other means to deposit large quantities of checks. Maybe these customers will opt to use another system, say cash, ACH, or other electronic currency instead. In the meantime, using Remote Deposit for your one-off checks is a great time saver. Just remember one thing; after you’ve made the deposit, destroy the check.

Sources:

1)      http://blog.checkadvantage.com/the-colorful-history-of-checks/

2)      http://www.nytimes.com/2014/12/06/your-money/some-drawbacks-in-tapping-the-phone-to-deposit-a-check.html

3)      https://www.usbank.com/pdf/checking/EasyCheckingSnapshot.pdf

4)      http://www.pewtrusts.org/~/media/assets/2014/11/mobile-remote-deposit-capture-report–art-ready_6.pdf

5)      http://www.consumerreports.org/cro/magazine/2014/10/pros-and-cons-of-mobile-check-deposit/index.htm

6)      http://money.usnews.com/money/personal-finance/articles/2012/10/09/how-to-deposit-checks-with-your-smartphone

7)      http://www.remotedepositcapture.com/overview/rdc.bank.benefits.aspx

8)      http://www.aba.com/products/bankmarketing/documents/feature_1_cov_nov_14.pdf

9)      http://www.waff.com/story/26104190/digital-banking-creates-duplicate-deposit-risk

By: John Watts


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Twitter has acquired dozens of companies since its inception and contrary to popular belief, these are not exclusively talent deals. The acquisitions of Crashlytics (Jan 2013), an app crash testing tool, MoPub (Sep 2013), a mobile ad exchange, and TapCommerce, (Jun 2014), a mobile app retargeting tool, have reportedly each cost the company over $100M and have added core mobile products that it is leveraging today.

So what’s the purpose behind all of these acquisitions and how are they linked? Twitter answered that question on October 22 at its Flight Conference when it announced Fabric, a modular mobile software developer kit (SDK), which leverages parts of each of these acquisitions, as well as capabilities it built in-house.

What is an SDK? It’s a set of software development tools that allow third party developers to build applications for a particular company or software package. Its primary purpose is to simplify otherwise time-consuming development tasks for developers and hopefully provide value to the company offering the SDK (in this case Twitter).

Fabric SDK has three modules, described briefly below.

Twitter Kit

Twitter Kit has three main features. “Sign-in with Twitter” simplifies the authentication process for new users. “Native tweet embed” makes it easy for developers to integrate tweets into their apps. “Digits” allows new users to sign up for apps with just a phone number.

Crashlytics Kit

Crashlytics Kit also has three main features: Crashlytics, Answers, and Beta. Crashlytics allows app developers to see what part of the code caused a crash and which users were affected, in order to quickly stabilize the app. Answers provides analytics on app usage. Beta allows developers to do beta testing and get user feedback.

MoPub Kit

MoPub Kit integrates with MoPub, a mobile ad exchange, to place ads into 3rd party apps so developers can monetize their traffic.

For a more information on Fabric, check out Twitter’s press release.

So why has Twitter invested hundreds of millions of dollars to launch an SDK – especially when two of the three modules don’t seem to relate to the core product (tweets)? Fabric allows Twitter to deepen its relationships with app developers, which can help create additional network effects and attract new users to its core product.

Being a platform business is the Holy Grail for technology companies. If executed well, you can create network effects, barriers to entry, and significant scale leading to enormous returns. Just look at Apple and Google – their aggregate market cap exceeds $1 trillion! This is in large part because of the iOS and Android platforms that allow them to profit from the explosion of mobile devices and the related ecosystem.

Companies like Twitter and Facebook don’t have the ability to develop a mobile OS, which is pretty clearly a two-horse race now. So how do they avoid being relegated to just another app sitting on your home screen, or worse yet tucked away in some folder?

They need to leverage their assets – the real-time communications layer and the social layer, respectively – to build or expand platforms they do have. Facebook has done this through acquisitions such as Parse, a mobile back-end-as-a-service provider of development tools, which is the basis for some of its SDK offerings. Twitter is hoping that Fabric will allow it to become an indispensible resource to developers as well.

How can Fabric create network effects for Twitter? Below are two examples:

  1. Offering developers an easy sign-in process (Sign-in with Twitter or Digits), which will drive higher app usage (by removing sign-up friction), which will drive more developers to use the SDK. Part of the Twitter Kit is tweet embed, so the hope is that developers will also integrate this feature into their apps thereby expanding Twitter’s distribution and hopefully accelerating new Twitter user sign-ups.
  2. Offering developers a tool to monetize their app traffic (MoPub). As more developers use the MoPub Kit, more advertisers will want to buy ad inventory, which will drive more developers to use MoPub. Twitter clearly benefits from this, as it will earn a share of the advertising revenue.

Ultimately developer relationships come down to proving your value. Can your SDK help developers grow and monetize their user base? If Twitter can do that, developers will happily use Fabric SDK and Twitter will benefit from the additional distribution and monetization.

References

https://blog.twitter.com/2014/introducing-fabric

 


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Context

With the risk of stating the obvious; the retail ecommerce landscape is rapidly changing. With the exponential uptake of smartphones and tablets, the retail industry is struggling to optimize the sales and shopping experience from the new m-commerce sales channel (mobile phones and tablets).

In January 2014, mobile apps overtook personal computer usage in the United States. Almost 55% of internet usage was through mobiles devices and tablets versus 45% through personal computers. Because of this growing consumer dependence on mobiles and tablets the m-commerce space cannot be ignored.

Exhibit A:

Pic1

Exhibit B:

Pic2

Problem

Currently there are two key issues that retailers face in this m-commerce space; firstly the time spent on a retailer’s website on a mobile device does not translate into purchases at the same rate. Although about a third of the online store visits are via mobile devices, the conversion rates are as low as 4.3%. Customers mainly use mobiles and tablets for out of store and in store research (e.g. to compare prices, find similar products). Secondly if and when the purchase is made, the dollar value spent is significantly lower through m-commerce., the dollar value spent is significantly lower through m-commerce.

Some critics of m-commerce argue that these devices can be viewed as aiding the ultimate purchasing decision; whether on consumer’s desktops or in stores. Hence the conversion rate is not that much of an issue.

However, when we do delve into understanding why customers make fewer purchases through m-commerce, the reasons that stand out are; the smaller screens make it harder to view items on sites that are not optimized for mobile devices; typing is difficult on a smaller device; and comparing prices to make the final purchasing decision is often viewed as much easier on desktops.

If this is true, then how do Amazon and e-bay manage to get higher traffic than other retailers and decent conversion rates through m-commerce? Part of the reason could be that both these retailers have had very high usage through the traditional e-commerce channels. This means that the customers are used to the interface and find it easy to follow and use on their mobile/tablets as well.

Exhibit C:

Pic3

Potential solutions

Two ways in which I think retailers could solve the issues identified:

1. Create a store specific mobile app: This mobile app would be optimized for usage on smaller screens, which will make it easier for consumers to look through potential shopping options. If the user’s card and shipping details are stored on this app, it could also potentially reduce the shopping cart abandonment rates

2. Use location based capabilities: In order to make customer interactions more relevant, stores can use location based capabilities to make their interactions with customers more relevant. For example; send the consumer a coupon when he/she in the isle or in the area. Retailers should consider Apple’s new product; the ibeacon to achieve this

Sources:

Comescore; CNN; Custora; Forbes; The mobile retail blog; Neilson.com


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Is image recognition technology poised to revolutionize omnichannel fashion retailing?

In the age of omnichannel retailing, the rapid adoption of new technologies has made it possible for retailers to deliver a consistent message and experience to every consumer, no matter how they choose to interact with a brand.  Consumers are no longer satisfied simply visiting a brick-and-mortar location and completing a purchase.  They want to follow companies on Twitter, check reviews of products online before going to the store (reportedly 80% of store shoppers checked prices online in 2013), comparison shop on their smartphones as they browse, and complete transactions with their iPad.  In this omnichannel environment, many retailers have appropriately responded by creating entire teams to manage social media accounts, build e-commerce sites, and optimize supply chains to serve consumers online and in-store.

Over the last few years, more and more retailers have been embracing a new technology to further deliver on these consumer expectations – image recognition and visual search.  Recognizing that consumers often want to look up product information while in-store or on the street, marketers began by leveraging barcode scanners and QR code readers to direct consumers to PDPs, sometimes even allowing them to purchase online.  For various reasons that would require a separate article to fully explain (QR app adoption rates, inconvenience of finding and scanning codes, lack of consumer education, etc.), these interventions rarely aligned with consumers’ desires and often fell short of forecasted conversion rates.  Instead, retailers have recently begun utilizing image recognition technology to skip the QR code and allow consumers to leverage a technology nearly everyone already has and is comfortable using – the cameras on their smartphones – to take pictures of products they are interested in and to immediately be directed to product detail pages.

Amazon was one of the first major retailers to leverage this technology for product discovery at scale.  First with its Flow app and now with the Firefly feature native to the Fire smartphone, Amazon has been at the forefront, pushing consumers to use this new technology to recognize products and purchase them within the company’s owned marketplace.  However, Amazon’s Firefly feature to date has been primarily focused on text recognition for its visual searches (it also has Shazam-like features to identify music and videos), and this limits the type of products the app can identify to products with clear labeling and packaging, such as video game covers and soup cans.  Given my years of experience in the footwear and apparel industry, I only became actively interested in the power of visual search and image recognition after seeing the technology applied to fashion.  Leveraging technology developed at universities such as the Imperial College London, early entrants into the space created applications like Snap Fashion, Style-Eyes, and Slice, which allowed users to snap a photo of a sweater or dress they liked and then receive recommendations from affiliated brands within the app’s network for similar products based on color, shape, and pattern.

Rather than search across an entire marketplace of disparate brands (as is the case with Amazon and early app’s like Snap Fashion), there has been a recent trend for individual brands or retailers (Adidas, Target, and Macy’s to name a few) to launch applications leveraging this technology to lead consumers to products within their own databases and enable mobile purchases.  Given these retailers’ desire to satisfy their consumers’ omnichannel needs, this investment makes perfect sense.  Leveraging third-party technology from visual search companies like Cortexica (among others), retailers can add image recognition features to their already existing mobile applications.  This has numerous direct benefits for the omnichannel consumer.  Image search features enable product discovery at the moment of inspiration, wherever a consumer has the chance to snap a photo.  This technology can be linked with the backend of e-commerce sites to enable immediate conversion and impulse purchases.  It can also provide valuable product information for consumers while they are in a retailer’s brick-and-mortar location, further blurring the lines between the physical and digital consumer experience.  Individual retailers gain an advantage by creating their own, proprietary database of searchable images, ensuring consumers are given recommendations for only their brand’s products, perhaps even pushing specific content depending on inventory and margin information.

We are still in the early stage of retailer adoption for this technology, and big questions remain around whether or not consumers will adjust their search and discovery habits to incorporate these types of features and whether an aggregator or a large set of customized app’s will dominate this space.  However, it is clear this technology has the potential to have a huge impact within the fashion world, and I am excited to see how this environment evolves.

Sources

http://marketingland.com/why-brands-should-go-omni-channel-in-2014-70970

http://www.mobilecommercedaily.com/macys-significant-omnichannel-push-includes-showroom-busting-image-search-app

http://techcrunch.com/2014/06/18/amazons-fire-phone-introduces-firefly-a-feature-that-lets-you-identify-and-buy-things-you-see-the-real-world/

http://www.mobilecommercedaily.com/target-fires-back-at-amazon-with-its-own-image-recognition-app

http://hypebeast.com/2011/8/adidas-originals-launches-iphone-app

http://www.snapfashion.co.uk/

http://www.cortexica.com/technology/


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