Mobile Driving Evolution of Airline Business

By Rimma Kats
Mobile Marketer

Many airlines are going mobile to accommodate the growing trend of tech-savvy consumers and are expanding their mobile marketing strategy to retain customer loyalty.

Companies such as Continental Airlines, Alaska Airlines and American Airlines have all integrated mobile. The airlines have used mobile applications and paperless boarding passes to not only sell tickets and give travelers an expedited check-in process, but to also make sure they have all the tools they need while on the go.

“Our customers have shown us that they want to take more control of their travel experience,” said Jared Miller, senior director of customer self-service at Continental Airlines, Houston. “Self check-in, which began at Continental in 1995, now accounts for over 95 percent of all domestic customer check-ins.

“With the growth of smartphone usage and mobile Web adoption, customers are now able to self-serve many aspects of their Continental travel experience, freeing up their time and getting access to real-time information,” he said.

Mobile boarding passes
In March, Alaska Airlines and Horizon Air rolled out three mobile applications for Apple’s iPhone, Research in Motion’s BlackBerry and Microsoft’s Windows Mobile.

Consumers can check their flight status information, flight schedules, flight alerts and check-in one to 24 hours prior to their scheduled departure.

“Mobile is important to us more to retain customer loyalty and give our travel-warrior customers the tools they want most,” said Steve Jarvis, vice president of customer innovation at Alaska Airlines, Seattle.

“Specifically for Alaska, we differentiate ourselves with superior customer service and making travel easier for customers,” he said. “Mobile applications allow us to improve on both of these measures.”

The airline has launched mobile technology at 16 of the airports it serves that lets travelers check-in from a mobile device and use an electronic boarding pass at security to board the plane.

By July, Alaska Airlines plans to have about 50 percent of its airports outfitted with electronic check-in technology including three of its Hawaiian destinations – Maui, Kina and Lihu’e.

“Mobile presents another channel for Alaska Airlines to reach our customers and meet their needs,” Mr. Jarvis said. “Customers can opt-in to receive relevant offers through our mobile club or receive updates on flight changes for the convenience of planning.

“With so many customers traveling without access to a printer, the mobile channel gives customers the ability to stay connected and take advantage of marketing offers and other announcements,” he said.

Mobile expansion
This past year Continental Airlines claimed to be the first carrier to offer mobile boarding passes on nonstop flights from Britain to the United States.

The company provides mobile passes that display a two-dimensional bar code with passenger and flight information.

The mobile boarding passes not only save the airline paper and money, but also help prevent manipulation or duplication of tickets.

Continental currently offers mobile boarding passes at 42 of it airports and plans on expanding to other locations.

“Mobile has transformed the customer experience in that the customer is able to access self-service options while on the go, remote from the office or home, or at the airport,” Mr. Miller said. “In many ways, the customer’s smartphone is like their own personal kiosk.

“Mobile is not only about the mobile Web though,” he said. “We recognize that while smartphone adoption is growing, not all customers carry a smartphone or use it in the same way.

“With mobile devices, customers are also able to contact us by calling our contact centers and we utilize IVR technologies to allow feature rich self-service options there as well.”

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comScore Reports February 2010 U.S. Mobile Subscriber Market Share

Use of Social Media via Mobile Device Continues to Post Strong Gains

comScore shared key trends in the U.S. mobile phone industry during the three month period between November 2009 and February 2010. The report ranked the leading mobile original equipment manufacturers (OEMs) and smartphone platforms in the U.S. according to their share of usage by current mobile subscribers age 13 and older, and reviewed the most popular activities and content accessed via the subscriber’s primary mobile phone.

The February report found Motorola to be the top handset manufacturer overall with 22.3% market share, while RIM led among smartphone platforms with 42.1% market share.

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More than 1 in 10 mobile subscribers to use mobile ticketing in 2014 globally, says new Juniper report

Travellers, cinema goers and sport fans to embrace the convenience of tickets on their mobiles according to new Juniper report

A new study by Juniper Research has forecast that more than 1 in 10 mobile subscribers will either have a ticket delivered to their mobile phone or buy a ticket with their phone by 2014. This represents a five-fold growth over the next five years.

The Mobile Ticketing report found that services are developing fastest in the transport sector, with SMS, bar code and, increasingly, app driven services being offered by rail & metro companies and airlines.

The potential for rail, metro & bus mobile ticketing is shown by early adopter market hotspots such as Japan, Scandinavia and Austria. Global impetus is being added by the rapidly growing number of airlines offering not only mobile boarding passes but ticket booking and payment as well. Beyond transport, mobile ticketing is already seeing traction across a wide range of sporting and entertainment venues including baseball, concerts and movies.

Report author Howard Wilcox stated: “Our research established that ticketing providers are exploiting apps to deliver innovative offerings - not just on smart phones either. One of the keys to widespread acceptance is going to be the ease for users of “silent” equipping via pre-installation. Telecom Italia’s new SIM cards for 2010 are a good example.”

Juniper Research gained unique market insight on top trends, issues and likely future developments directly from the heart of the market through its primary research interviews with leading mobile ticketing operators, application developers, consultants and vendors. The report includes a detailed five market forecasting suite covering key market parameters.

Further key findings from the report include:

• Europe, Far East & China & North America regions are all forecast to see double digit penetration by 2014


• Growth constraints include multiple ticket scheme environments such as certain transport markets, with their potential resulting user issues such as support and help

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Gartner Says Worldwide Mobile Phone Sales to End Users Grew 8 Percent in Fourth Quarter 2009; Market Remained Flat in 2009

Worldwide mobile phone sales to end users totalled 1.211 billion units in 2009, a 0.9 per cent decline from 2008, according to Gartner, Inc. In the fourth quarter of 2009, the market registered a single-digit growth as mobile phone sales to end users surpassed 340 million units, an 8.3 per cent increase from the fourth quarter of 2008.

"The mobile devices market finished on a very positive note, driven by growth in smartphones and low-end devices," said Carolina Milanesi, research director at Gartner. ”Smartphone sales to end users continued their strong growth in the fourth quarter of 2009, totalling 53.8 million units, up 41.1 per cent from the same period in 2008. In 2009, smartphone sales reached 172.4 million units, a 23.8 per cent increase from 2008. In 2009, smartphone-focused vendors like Apple and Research In Motion (RIM) successfully captured market share from other larger device producers, controlling 14.4 and 19.9 per cent of the worldwide smartphone market, respectively.”

Throughout 2009, intense price competition put pressure on average selling prices (ASPs). The major handset producers had to respond more aggressively in markets such as China and India to compete with white-box producers, while in mature markets they competed hard with each other for market share. Gartner expects the better economic environment and the changing mix of sales to stabilise ASPs in 2010.

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Mobile App or Browser-Based Site? Report Says The Browser Will Win on Mobile

Read Write Web
Richard MacManus

Mobile search company Taptu has released a detailed report showing that the future of the Mobile Web is likely to be dominated by cross-platform browser-based mobile web sites - rather than apps built specifically for iPhone, Android, or any other platform. Taptu calls the former "the Mobile Touch Web," which it defines as "Web sites created for mobile touchscreen devices, with finger-friendly layouts and lightweight pages that are fast to load over cellular networks."

Taptu estimates that there are 326,000 Mobile Touch Web sites worldwide, which they say compares to 148,000 iPhone apps in the App Store and 24,000 apps in the Android market. Taptu expects the browser-based mobile web market to grow much faster than the app market.

What kinds of sites are more likely to be browser-based for mobile phones? According to the report, 19% of the mobile sites measured were Shopping & Services sites; compared to 3.6% in the same category in the App Store. Content in the 'Social' category also has a higher chance of being a browser-based mobile site, rather than an app (12.9% to 1.7%).

Conversely, just 0.8% of mobile sites were gaming, compared to 18% of apps in the App Store. There is a similar discrepency in the 'Entertainment' category.

It seems then that commerce services are taking more advantage of mobile web browsers than gaming and entertainment providers. But why? Taptu says it's because "many [Commerce] products and services do not really fit into Apple's iTunes content-oriented billing system." Meanwhile, gaming and entertainment content is better delivered as an app, says Taptu, "since apps deliver a much richer, more interactive gaming experience than the casual games available on the Mobile Web."

Taptu says that the increasing sophistication of mobile browsers is one reason why browser-based mobile sites will flourish. In particular, it points to increasing support for HTML 5. See our analysis of Web vs. Native Mobile Apps if you'd like to know more about this.

According to Taptu, "it's getting easier and easier to create rich touch screen user experiences with the browser without having to create platform-specific apps." Taptu also points to increasing usage of open standard APIs, enabling Mobile Web developers to access "deeper device functions such as geolocation."

Taptu does concede that gaming content will probably continue to be delivered predominantly as download apps on iPhone and similar devices. However it claims that for "many other types of app, the economics of software development and publishing favours the Web development route."

Taptu predicts that "the Mobile Touch Web will grow vigorously over the next five years, and will approach the quality of user experience of Mobile Touch Apps across all the app categories except for games."

Shopping by Mobile Will Grow to $119 Billion in 2015

In 2015, shoppers around the world are expected to spend about $119 billion on goods and services purchased via mobile phones. That number represents about 8% of the total e-commerce market.

“Mobile online shopping is reaching critical mass,” says senior analyst Mark Beccue. “In the United States, mobile online shopping rose from $396 million in 2008 to $1.2 billion in 2009. While definitions of ‘mass market adoption’ vary, a more than threefold increase in one year indicates significant consumer interest."

Noteworthy is that even that $1+ billion turnover in the US is dwarfed by the size of the mobile online shopping market in Japan, which exceeded $10 billion in 2009 alone.

This market is growing solidly in Europe too, and is expected to outpace the US by the end of 2010.

“The driver for mobile online shopping in the US has been the recent sharp spike in smartphone adoption and the corresponding enthusiasm for mobile Internet. Also, many more retailers have been launching mobile commerce websites,” adds Beccue. A longer-term driver in global terms is the fact that in many less-industrialized regions, mobile is virtually the only way to access the Internet.

Not only does mobile online shopping allow shoppers to manage their time better, but in the fourth quarter of 2009, an interesting trend emerged: consumers were checking out products in bricks-and-mortar retail stores and using their phones for comparison shopping.

A subset of mobile commerce is the trade in virtual goods, generally associated with online gaming. This too has seen rapid uptake, as mobile payments are the best option for online purchases under about $20, and this way of shopping is especially suitable for those – often young gamers – without credit cards.

ABI Research’s new “Mobile Commerce” study focuses on two emerging developments in mobile commerce: mobile online shopping and mobile payments for virtual goods. The report includes global forecasts for e-commerce, mobile online shopping (viewed as a subset of e-commerce), virtual goods, and mobile payments for virtual goods.

It is part of the firm’s Mobile Money Research Service, which also includes other Research Reports, Research Briefs, Market Data, ABI Insights, ABI Vendor Matrices, and analyst inquiry support.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advise thousands of decision makers through 28 research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

EBay generated $400M in business from iPhone app

Mobile Marketer
By Giselle Tsirulnik

EBay President/CEO John Donahoe said mobile is one of the key areas that the company is focusing on since devices will surely impact the way that consumers shop.

Mr. Donahoe said that the iPhone and BlackBerry devices are already changing consumers’ shopping habits and recommended that retailers change and evolve if they want to compete. He spoke at the Shop.org annual summit in Las Vegas.

“Mobile devices will play a role and the notion of mobility will have a huge impact on ecommerce,” Mr. Donahoe said.

In two years, about 40 percent of Internet access will happen from a mobile device. IPhones are only about 8 percent of the market, but they make up about 40 percent of Internet usage at present.

Since $400 million was generated in business since the eBay application’s launch, Mr. Donahoe said that devices like this one and others like it are going to impact his company.

Mr. Donahoe is president/CEO of eBay
Last week someone bought a $350,000 Lamborghini on the iPhone. Also, someone bought a $150,000 boat from their iPhone.

Consumers are bidding via mobile, browsing products and eBay’s mobile sales volume is growing in the double digits every month.

“I know this will be an important device for ecommerce,” Mr. Donahoe said.

Mrs. Freeman Evans is vice president and research director of Forrester
One of Mr. Donahoe’s colleagues came into his office and laid a book on his desk. To cover the title of the book, his colleague placed a pack of M&Ms on it. He snapped a picture with his iPhone and was able to locate various book stores that sell it and their prices for it.

Mr. Donahoe believes that innovation is driven by the small application developers and that they will impact how people will shop.

EBay is launching its first developer conference and will open its PayPal and eBay platforms for developers.

Mr. Donahoe talked about PayPal and said the payments side of ecommerce is what stifles the business.

“People are just not comfortable providing their credit card information over the Internet,” Mr. Donahoe said.

Mobile payments are the future.

EBay is right at the center of the technology and commerce worlds. 300-400 million people use eBay products worldwide.

The reason for eBay’s success?

“You have to adapt to compete and that is what we have done,” Mr. Donahoe said. “We adapted to the fact that consumers are embracing new technologies and we took advantage of that.”

Ecommerce is maturing as a market, but it is only about 5 percent of overall retail sales.

Mr. Donahoe forecasts it will eventually end up at 20-30 percent.

Traditionally in retail people talk about the online and offline, but the lines are blurring.

People are researching online, go in-store to buy and then once they are at a retail location, they use their mobile phones to comparison shop.

“There won’t be just one winner in ecommerce,” Mr. Donahoe said. “There will be many winners. When there is a lot of innovation, there are multiple winners.

“Online payments are a bit different, as it is a major friction point for online retail,” he said. “The online payments world will soon mirror the offline.

“It is all about convenience and speed and mobile payments and micro payments will help bring that 5 percent to 10 percent.”

After Mr. Donahoe’s keynote, Patti Freeman Evans, vice president and research director at Forrester Research interviewed the eBay executive.

She asked who he considers as his competition and he said instead of worrying about competition, eBay focuses on the customer.

Most likely this type of an approach is what got eBay 90 million unique visitors per month. A whopping 75 percent of that traffic is organic. The marketplace also buys about 20 million keywords from Google.

EBay is all about giving its merchants – big and small – access to traffic so that they can sell their merchandise.

“When we though about competition we did not want to focus on any competitor,” Mr. Donahoe said. “Instead we ruthlessly focus on customers. We need to think about how to win and get our sellers to win."

Senior Editor Giselle Tsirulnik covers ad networks, advertising, content, email, media, messaging, legal/privacy, search, social networks, television and video. Reach her at giselle@mobilemarketer.com.