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November 5, 2011

During this year's November holiday season that officially begins on Thanksgiving, an unprecedented 15 percent of consumers in the United States logging onto a retailer's website are expected to do so through a mobile device, according to IBM.

Based on compiled numbers from the IBM Coremetrics Benchmark, all online holiday shopping in November is also expected to grow as much as 15 percent versus November of last year, with the growing influence of mobile devices such as iPads and Android phones being among the key factors.

The IBM Coremetrics Benchmark analysis gathers data directly from the web sites of more than 500 leading U.S. retailers such as Wal-Mart, Target, Amazon.com and eBay. Using sophisticated analytics technology, the benchmark measures real-time sales data and online marketing results to uncover shopping trends across a wide-variety of channels including social media, mobile devices and other online sources where consumers interact with their brands.

This latest installment serves as the beginning of IBM's fourth-annual Benchmark Campaign and reveals the following 2011 online retail predictions for the November holiday season:

Online Shopping Growth - Total online sales in November will experience impressive growth of 12-15 percent over the same period in 2010.

Mobile Traffic and Sales - Record numbers of consumers will shift their shopping from the PC to their mobile device this holiday season. In October, nearly 11 percent of people used a mobile device to visit a retailer's site, up from 4.2 percent in October 2010. Additionally, mobile sales continue to increase, reaching a high of 9.6 percent in October 2011, up from 3.4 percent in October 2010.

iPhone & Android - For the first time, Android users will demonstrate similar levels of mobile shopping as iPhone users. These October 2011 numbers show iPhone accounting for 4.0 percent of mobile traffic and Android 3.5 percent.

The iPad Factor - Shoppers using an iPad will lead to more retail purchases more often per visit than other mobile devices. This trend is based on October 2011 figures where iPad conversion rates reached 6.8 percent as compared to the overall mobile device conversion rate of 3.6 percent.

Surgical Shopping Goes Mobile - Mobile shoppers will display a laser focus on buying this season that surpasses that of other online shoppers with a 44.2 percent bounce rate on mobile devices versus online shopping rates of 37.3 percent.

The Social Influence - While the industry will see modest increases in direct social buying, the influence of these sites and services will eclipse that of other channels. According to October conversion rates, 9.2 percent of consumers that visited a retail site from a social media site made a purchase. This compares to 5.5 percent of all direct online shopping last year. Also in 2010, the vast majority of social shopping will continue to come from Facebook, which in October accounted for 77 percent of all traffic from social networks.

"This November holiday season will mark the true advent of the post-PC era with consumers demonstrating a heightened interest in adding mobile devices to their holiday shopping arsenal," said John Squire, Director of Product Management, Enterprise Marketing Management Group, IBM Industry Solutions.

"In response, savvy retailers must invest in delivering hyper-personalized, smarter commerce shopping experiences that are capable of building loyalty through multiple channels with exceptionally relevant promotions, free shipping and more," added Squire.

In other mobile news

Faulty hardware on Android smartphone devices is costing wireless carriers as much as $2 billion a year, according to a new report WDS. The research analyzes over 600,000 technical support calls that the WDS teams around the world have handled in the last year.

Taking a comprehensive view of the four leading mobile operating systems, the study finds that fragmentation has led to a higher than average propensity for hardware failure on Android-based devices.

On average, about 14 percent of technical support calls on Android relate to hardware versus 11 percent for Windows Phone, 7 percent for iOS and about 6 percent for BlackBerry.

"One thing we must be absolutely clear on is that our analysis does not find any inherent fault with the Android platform," said Tim Deluca-Smith, vice president of marketing at WDS, in a statement.

"Its openness has enabled the ecosystem to grow to a phenomenal size, at a phenomenal rate, and it's this success that is proving challenging," he added.

But the report does seem to point a finger at hardware. According to the report, the introduction of low-cost hardware, a variety of software customizations and the process for delivering OS updates to consumers were all resulting in operators' retail operations and their return-and-repairs processes being stretched.

Deluca-Smith notes that many operators are treating Android as a standard implementation with a consistent customer experience, which isn't the case. "The Android customer experience differs enormously between devices and this means that the way in which Android devices are retailed and supported must consider factors such as the hardware build and quality of components."

The study took place using the WDS GlobalMine knowledge platform between July 2010 and August 2011 and covered 600,000 technical support calls taken by WDS across Europe, North America, South Africa and Australia.

In other mobile news

Less than two days after issuing its first crack at a fix for iOS 5's battery draining problems, Apple has issued a new version of the software to mobile app developers, suggesting its public release may come sooner than expected.

Apple today posted a second beta version of its iOS 5.0.1 to its developer website, an update to the initial release of iOS 5 that repairs a handful of issues while adding new features to the original iPad. The software hit Apple's developer site on Wednesday, shortly after Apple acknowledged that some users were indeed seeing poor battery life after upgrading to the newer version of iOS.

Besides tackling the battery life problem, iOS 5.0.1 also brings multitasking gestures to original iPad owners, a feature that was a notable omission in the initial release of the new software, considering that earlier betas had the feature enabled.

The update also fixes a security issue with Apple's Smart Cover for the iPad 2 that would let users gain access to whatever mobile app the owner of that device was running, even if they didn't know that user's lockscreen password, along with fixing a bug with documents in Apple's iCloud service, and voice recognition accuracy for Australian users using Apple's dictation feature on the iPhone 4S.

Apple said it would be delivering the software update to the general public "in a few weeks," however the fact that the two betas are so close to each other suggests Apple may be trying to push that deadline up.

By comparison, betas between prerelease versions of iOS 5 were sometimes weeks apart.

In other mobile news

HTC is about to launch its latest 4G LTE mobile handset with integrated Beats Audio technology. HTC hasn't been too secretive about the new device, which is called the HTC Rezound that is expected to operate on Verizon's network.

Advertising has already been spotted in Verizon Wireless stores. The new HTC Rezound (aka HTC Vigor) is expected to have a 4.3-inch 720p high definition touch screen, a 1.5 GHz dual-core processor, and an 8-megapixel camera.

But the big draw for the new device could be the integrated Beats Audio technology. This comes from HTC's acquisition of Dr. Dre's Beats Electronics earlier this year.

There are already a couple of devices on the market that use the technology. When Beats Audio is enabled, the sound from the device is instantly louder, with a much deeper bass. But it's hard to say if this feature really makes the music quality on the phone that much better than audio on other devices.

Still, HTC will likely highlight it in its marketing.

In other mobile news

Work on New Zealand’s national fibre network is about to start following the confirmation of Huawei as the key technology provider for the Ultrafast Fibre network.

Huawei has lobbied extensively to secure this contract, beating competitors Alcatel-Lucent and even giant Ericsson. Industry insiders had a pretty good idea in July that Huawei would be awarded the contract.

Ultrafast Fibre CEO Julian Elder, says UFL, a special purpose entity created by WEL Networks to build the network for Ultrafast Broadband Ltd., selected Huawei due to their professional approach and strong performance throughout the selection process.

Elder said “Huawei’s global experience in providing communications solutions for open access networks is matched by a solid understanding of the local area needs of New Zealand, including its proven track record in deploying national broadband fibre networks around the world."

"We know they will be the best partner for this work and their technical expertise on access networks will ultimately provide customers with leading edge access technologies,” added Elder.

The Ultrafast Broadband network will cover Hamilton, Tauranga, Tokoroa, New Plymouth, Hawera, Wanganui, Te Awamutu and Cambridge.

Huawei will supply Ultrafast Ltd. with intelligent Layer 1 Optical Distribution Network (iODN) and proven Open Access Layer 2 network solutions.

Once deployed, residential and business customers will be able to subscribe to different retail service providers and will have optical network termination units in the premises connected to the UFB network offering services such as high-speed Internet, telephony and IPTV.

The network is set to deliver fibre-optic broadband to over 75 percent of the New Zealander population by 2021.

In other mobile news

BillToMobile.com, a company which handles purchases of digital goods that wireless subscribers make on their smartphones by linking payment to their cell phone bill, has signed up AT&T Mobility as a new partner, locking up the fourth and last major wireless carrier in the U.S.

BilltoMobile CEO Jim Greenwell said that the wireless industry is poised to see a rapid acceleration of many purchases made through the carrier billing model.

Rather than enter their credit card information on the phone, a person can use that option to pay for the digital goods and have the expense show up on their monthly phone bill instead of on their credit card statements.

The company handles about $3 million in gross transactions a month according to Greenwell, which come from places such as dating or gaming Web sites.

The reason he is so confident is simply that BilltoMobile has done it before. The company has a dominant position handling transactions for wireless carriers in South Korea, where consumers there are much more comfortable purchasing digital goods, and handles $4 billion a year in transactions.

In South Korea, the idea of wireless carrier billing for digital goods took a while to adopt, however. But the company saw 85 percent to 100 percent growth in transactions once it began to take off, a growth rate that remained steady for nearly 10 years.

And it could look similar in Japan as well, since that country has also been using carrier billing for the past few years, although the rate of growth hasn't been near that of South Korea.

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Source: IBM Corp.

    This article was featured on Business 5.0 and on Tech Blog.