How has location-based services evolved into the #dailyhabits of consumers and business models for businesses?

For more than a decade, LBS or location-based services had become gradually ingrained into the daily habits of online mobile Internet consumers, going from the usage in just vehicles of a select number to these days en-masse to the PC Web, Mobile Web and Apps. The growth to mobile for the increasingly on-the-go consumers is undeniably relentless. The opportunities in location-based services are garnering momentum in a number of ways in the markets.

With the growth and penetration of smart devices globally (especially lower cost smartphones, tablets), not only are LBS apps being constantly developed, piloted and experimented in more and more markets by startups, established Internet brands and companies have also been moving in to invest into LBS companies – for their assets in contextual data (user profile, content browsing, content generation in tips and reviews and transactional behaviour for deals and coupons tagged to location).

The question that comes "What do users want in a location-based app?" - click on the link and you will find a good Quora discussion with leading bogglers and tech evangelists like Robert Scoble providing his views on this topic.

From my market observations and following discussions in Quora, I believe LBS in the market are being driven by the following drivers:

(1) Emotional/Informational needs drivers (refer to above diagram; on the left):

• Gamification, social leaderboards are used to engage consumers (more often than not, peer to peer friendly competition for bragging rights)
• Time capsule/journal: into your own life/newsfeed on where you have been, passed by/through alone/with friends; time-based contextual/mood based markings aka bread crumbs
• Bookmarking future intent, to-do list
• Connecting with people, new friends - explore and find people in vicinity with similar interests, profile
• Trend setter - leaving tips behind.

(2) Rational/Gratification targeting drivers (refer to above diagram; on the right):

• Price comparisons through daily deals, bar-code reading of prices.
• Get recommendations - see where friends are at; heatmap of where are the hot places to be spotted
• Hot deals - swarmed based daily deals as a traffic driver are losing their attractiveness for sustainability of businesses; this tactic may change depending on the business maturity (loyalty play?)
• and Businesses seeking to capitalise on targeting on-the-go consumers (either own customers through loyalty, bought customers through offers, in the longer term, earned customers through WOM and recommendations from business ambassadors)

LBS apps in the market, depending on their focus areas – whether in Location-based SNS, location-based deals to retail or simply a navigational utility, have worked their way into the daily habits of today’s mobile on-the-go consumers, bearing differing levels of frequency and retention in usage.

LBS (Location-based Services) Market Landscape | in #dailyhabits | Drive to O2O (Online to Offline) from Nelson Wee

From these focus areas in daily habits usage, different business models are being experimented by LBS companies largely with businesses (most oft than not, consumers will download and use LBS apps for free). Who are in the LBS business? Google, Yahoo, Microsoft, Apple, Foursquare, Alibaba, SingTel …

Business models follow to provide to the ancillary value for businesses, in the drive to retail O2O (online to offline) business: content (mobile) marketing of new menu items, promotional offers via coupons; loyalty points replacing current physical cards, table reservation, delivery and so on, are being piloted.

No one model is yet a proven model (none yet in the top rightmost quadrant - refer to the 2X2 matrix) as businesses need to be convinced on the opportunities for them (consumer profile understanding) and the longer term play required for returns to be seen in investing into location-based services like mobile LBS marketing, mobile coupons etc. Yet we do see encouraging signs that businesses are seeing the light and embarking on their journey into mobile apps, digital marketing and initiatives - evident in the growing share on digital advertising over traditional advertising in the US and globally too (in Singapore, 20% of advertising revenues will come from Digital by 2020, up from ~10% in 2011).

According to Convergence catalyst’s report “Location Based Services: Global Market Overview, Deployment Trends and Potential in Enterprise, Government and Consumer segments”, key use cases for LBS in the different regions globally are as follows:

• In APAC - restaurant finder, no surprises, given the huge focus on food and restaurant dining in APAC
• In EU - mapping and navigation
• In NA - family tracker, mapping and navigation
• In LA - friend finders
• In MENA - navigation, safety, emergency and tracking

LBS (Location-based Services) Market Landscape | in #dailyhabits | Drive to O2O (Online to Offline) from Nelson Wee

And so in my analysis on the positioning of LBS players in the Southeast Asia, Singapore markets, I have focused on 3 leading players (the first 2 are in the restaurant finder business):

(1) SingTel's Hungrygowhere (HGW)

(2) Burpple

(3) Yelp

On the Social/Reach vertical axis, we have 2 key players – the established player Yelp and the Singapore startup Burpple, who have positioned their focus on Social, intangible recognition and reaching out to a global audience.

On the Tangible/Richness horizontal axis, we have HGW, a Singapore startup which was acquired by SingTel, has leveraged their wealth of restaurant reviews and connections with Singapore restaurants to build up tangible business revenue streams like ads and table reservation through PC Web and Mobile App channels. 5 years or so in the market,HGW has long-standing brand recognition in the Singapore market as the incumbent for restaurant reviews. HGW has recently also launched in Malaysia on Aug ‘13.

For this analysis, I have left out Global players like Foursquare, Tripadvisor as well as regional players like Openrice, Zomato in this analysis who are also building their business footprint on with social and/or tangible business axes.

Last but not least, there are also niche LBS players in the markets here like Perx, Harpoen, SGMalls, Spawt, SGSportsBar and so on, who are in the emergent and market tapping stage - building product, partnerships and social reach.

The LBS market has been around for more than a decade. And location with LBS remains a consistent theme in startups in the markets here. Earlier in 2013, I had written about how  businesses will start to look and build their loyalty programs around social, mobile and  location. And I am sure that we will start to see more of such LBS offerings taking shape into 2014 and beyond.

Do take a look at the attached slideshare deck "LBS (Location-based Services) Market Landscape | in #dailyhabits | Drive to O2O (Online to Offline)" which I have referred in this post. I look forward to hear from you on your take on the LBS market evolution.

Till the next post,

Nelson Wee

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PS: here is a little background on SK planet where I am currently at.

SK planet, a subsidiary of SK Telecom and part of Korea’s 3rd largest conglomerate, SK Group, has a long-standing experience in the LBS portfolio (amongst its many other product line offerings in digital content and also eCommerce, having explored, tried and tested various LBS app concepts for more than a decade. With T-Map and OKMap, SK planet has maps and content experience in LBS. With NaviCall and Gtrac, SK planet covers the Enterprise business areas in LBS for Taxi call booking and commercial fleet management. With recently with Pickat, SK planet is leveraging its LBS experience and know-how in testing the markets in Korea and Singapore on discovery, social and curation aspects of LBS offerings with consumers and local businesses.

What are the Daily Habits in Online and Mobile Internet Users?

With help from the rapid proliferation of mobile devices, mobile data connectivity with affordable data plans from mobile network operators and wifi services and innovations from the apps and contents ecosystems, the online and mobile Internet today has been shaping how consumers are consuming apps, services and contents and converting into daily habits.

Here is an analysis on how the daily habits of online and mobile users with respect to the different categories of apps, services and contents, served up and consumed on their feature phones, smartphones, tablets, PCs etc, are being segmented. The 4 types of segmentation are characterised against the frequency of usage vis-a-vis retention over time (source: analysis of Flurry blog analysis and AC Nielsen consumer studies on apps and second screen).

Daily Habits of Mobile Internet Users (Analysis May 2013) from Nelson Wee

(1) In the upper right hand corner Quadrant I "High Engagement and Value" segment, communication (email, social instant messaging)  and news come up tops being habitually consumed by consumers intensively and to which consumers grow loyal and stick to over time. With a power base of stable, growing audiences, advertising revenue or subscription charging are business models being pursued.

(2) In the upper left hand corner Quadrant II "High Engagement and Churn" segment,  social networking, social games, streaming music etc serve as high traffic drivers with consumption often contained within short bursts. To stem churn, acquisition and retention have to be constantly reinforced via for example, in-app item purchases, gamification.

(3) In the lower left hand corner Quadrant III "One-off premium use" segment, contents for education, health and fitness or medical tend to lead to one-off consumption and so warrant a premium charge. Entertainment and personalisation also fall under this categorisation where the situational context could lead to the users needing to buy a piece of music, standalone game or a theme to personalise their mobile devices.

(4) In the final Quadrant IV "Scheduled use but high value" segment, here we see habits for travel, navigation, utilities etc, as they are highly valued by the users when the situational context demands it, like for that schedule business trip or social holiday.

The focus on daily habits of mobile and online users were highlighted by Yahoo's Marissa Mayer when she laid out her vision in transforming Yahoo and bringing the cool of the Internet portal back into its stable. Real life momentum in developing on the daily habits of mobile and online users are in evidence today. 

• We constantly see Yahoo continuing on its acquisitions of startups which are entrenched in the daily habits of users - on email management (communication) and to do lists (utilities), Summly (news), Tumblr (social networking, user-generated content, communities) etc.
• SK planet has developed an app "Jukebox Hero" which turns your music library into social music jukebox and more in the portfolio addressing a range of consumer habits.
• eShopping trends today show growth in both ecommerce and mobile commerce.
• Retail Showrooming which see consumers doing price comparison research (Deals) whilst in store 
• Retail apps usage are surging 525%
• College students are finding deals on mobile
• What do users want in a location based app - a quora discussion around the emotional and rational drivers on consumer location-based habits

Understanding the daily habits of online and mobile consumers provide great value by helping businesses determine their digital content Internet business go-to-market strategies by reviewing first, which consumer segments, what content categories  and business models, how to evolve product portfolio and so on.

I look forward to hear your thoughts and experiences.

Till the next post, you can find me on:
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signing off,
Nelson Wee

Photo credit: Phil Hawksworth / Foter.com / CC BY

From Print to Digital: Evolution of Retail Circulars

I read recently from a Nielsen market report that in the US, the ongoing consumer love affair with the retail store circular is transforming from print to digital.

Every day across America, a shopper walks into a store, grabs a cart and reaches out for the store circular to find out what’s on sale. Now however, a new generation of digital savvy consumers are viewing their circulars (or brochures, vouchers, deals) online or via a mobile browser or app.

From my observations, there are 3 trends happening even here in the Singapore retail shopping landscape.

1. Consumers are checking their mobile for deals, product info (I wrote about this in my last post about e-commerce trends in Singapore).
2. Consumers are used to buying deals online or via mobile (mobile is nascent, covering 4% of total e-commerce market in Singapore).
3. Personalised offers beyond SMS, EDMs are coming to the fore with location-based targeted offers, QR code call-to-action.

Indeed, the future-state will be a shift to personalised tailor-made offers that will match the shoppers' interests and purchase patterns.

Another interesting insight from the Neilsen report described that almost half of the American category shoppers rely on circulars to draft their shopping lists (think mobile shopping list apps here). As in Singapore where 84% of consumers search on their mobile for product info, a large part (three-quarters) of American buyers make purchase decisions (think mobile research here) before setting foot in the store.

It is critical that players in the retail shopping ecosystem relook the consumer journey, and start to collaborate and play a part in working with forward-looking retailers to experiment with multiple digital pathways (mobile, tablet, laptop, PC, TV, retail, OOH displays etc) that will enrich and enhance their retail circular experience, by integrating video, interactive elements and smart features that would serve up information based on loyalty or location.

What are your views about retail offers and consumer behavior in e-commerce in your market?

Look forward to hear from you.

Nelson Wee
connect with me on Twitter @nelsonwee