1. © 2012 Critical Mass, Inc. All Rights Reserved

2. About Critical Mass
16 Years
700 +
Employees
8 Offices
25 +
Clients
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3. It’s no surprise
Mobile is exploding
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4. Smartphone penetration is growing
Overall - US Smartphone Penetration 55% in July 2012
70% of new phones are smartphones
Smartphone & Feature Phone Penetration, US
Mobile Subscribers Ages 18+
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5. Web traffic is going mobile
With tablets, mobile page views are 20% of total views
Mobile installed devices will overtake Desktop in 2013
Desktop search declined in Sept. for the first time since 2006
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6. Search is going mobile (and immediate)
Paid mobile and tablet search clicks are now 21%
in the consumer goods category
On mobile, action is taken within the hour
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7. Transactions are going mobile
Buying everything and anything on the phone is
going mainstream. It started with virtual content
inside apps…
§ Half of smartphone users use
shopping apps
§ Average of 41 apps on each
phone - up 28% y/y
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8. Retailers are going mobile
Buy.com - 5% of revenue from mobile
ebay - $10B in mobile sales
§ 180,000 cars per year
§ 3 purchases/sec. on mobile
§ >70% of 350M items are “new”
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9. Mobile and web – overall growth
Web commerce 2011
§ 7% of retail sales
Web commerce 2012
§ 16% of retail sales
Mobile commerce continues
To grow 10X faster than web
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10. Building Your Strategy
4 Mobile Pillars for Retail
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11. Web vs App
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12. Web vs App
73% of mobile users prefer web over apps for shopping
Apps work – providing native utility value
§ Repeat use
§ Scanning
§ List making
§ Easier Geotargeting
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13. Mobile shoppers love the web
Mobile web is not just for shopping
§ Store finding
§ Store hours
§ Finding “deals”
Cyber Monday shoppers - 2011
§ 11% visit a retailer site via mobile
§ 3x over 2010
§ this year – 30%???
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14. Mobile web experience - search
Consumers are transferring
desktop behaviors to mobile -
but with immediacy
Mobile search is evolving:
§ Voice
§ In-app
§ Context
§ Connected search
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15. Multiple apps for retailers and brands?
More than 1 = Major hurdle
Secondary apps need a clear
purpose and use case
Consumers think “web or app?”
not “web or which app?”
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16. Digital
Couponing
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17. The state of the mobile coupon
A digital coupon is…
§ Passbook
§ SMS
§ Groupon
§ a picture of a coupon
§ a code off the web
§ simply showing up
Any way you slice it –
Consumers love them!
Discovery and retention are challenges
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18. Mobile coupons – optical vs NFC
Passbook is now leading the way
Optical will win near term
Example – Starbucks, Target, Walgreens, airlines
NFC is fragmented and evolving more slowly
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19. Mobile coupons – retailers vs brands
Retailers control the systems today: POS and apps
Traditional brand/mfr. coupons aren’t ready for mobile
Retailers are extending their advantage
with loyalty programs
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20. Showrooming
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21. Showrooming is reality
Showrooming is…
56% of all shoppers say they
will “showroom” this holiday
27% say they will likely
buy online while in the store
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22. Guitar Center led the way
Music stores heard the music…
Savvy musicians forced
total price matching early
for e-commerce
Bottom line:
Commodities compete on price!
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23. Best Buy has come around
The electronics giant revealed
plans to match online prices
(including Amazon)
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24. Mobile POS
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25. New apps and new POS models
Square and Uber apps
are training mobile users
§ Fast
§ New interfaces
§ Personalized
§ Paper-free
Startups, Pay-Pal and even
POS incumbents are building
mobile capabilities
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26. Retail is moving to mobile POS
Smartphones are replacing POS
and more (inventory, kiosks, etc.)
JCPenney promises to replace
all POS by end of 2013
Expect to see “line busters” with
mobile checkout this holiday
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27. Mobile self checkout in happening
Using your own mobile device
is the new self checkout lane
§ Apple
§ Wal-Mart
§ Sears
§ Tesco (EU)
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28. Other Key
Considerations
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29. In-aisle promotions
Embracing the mobile shopper in action
§ QR will continue to have slow growth
§ NFC is early, developing and expensive
§ Gathering shopper info is key
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30. User reviews
Reviews are the number two
mobile action
Reviews on the mobile site
will draw traffic
Expect to see more effort in
gathering legitimate reviews
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31. Social and mobile shopping
Social sharing is actually happening
§ Coupons
§ Purchases
§ Wants
§ Advice
Hashtag is the new URL…
Social is driving traffic to even
small stores that embrace mobile
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32. What about mobile payments?
It’s really early in the game!
A solution in search of a problem?
The Digital ID dilemma…
A fight over fees
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33. Retail and Internet sales tax
Sales tax is the showrooming secret trigger – for
consumers!
3 bills currently in front of Congress to charge national
online sales tax
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34. Amazon plans on Internet taxes
Added 18 Distribution Centers in 2012
§ 40 total in the US
Stopped fighting and agreed to pay
taxes in several states already
The bet is on same day delivery vs.
same day pickup
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35. An old dog learns new tricks
Event the USPS is testing same day delivery
(starting this month in San Francisco)
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36. What now?
Steps you should take today
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37. Be Transparent
It’s impossible to fight smartphones and search
Consumers are looking at prices – Stores must also
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38. Price Match
Price matching is evolving
as the dominant strategy
Match now to keep the sale
Build out unique offerings
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39. Leverage Mobile Communication
Communication is king:
SMS, email, PUSH
Talk to the customer
outside the store
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40. Experiment with Digital Coupons and Payments
Invest in digital coupon experiments now
Developing real integration takes time
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41. The future is now
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42. Search
The search starts here…
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43. Context
Mobile meets the store…
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44. App
Mobile enhances the store…
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45. Coupon
Sealing the deal…
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46. Payments
Closing the loop…
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47. In Conclusion
Bottom line – this is all possible today!
§ Growth continues - differently
§ Consumers have the power
§ Integrate strategy across channels
§ Keep a big picture view of mobile
§ Build a mobile and tablet strategy
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48. © 2012 Critical Mass, Inc. All Rights Reserved
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Questions?
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