Will Messaging Apps be all you need?

Since the Edward Snowden revelations back in 2013 the popularity of messaging apps has gone from strength to strength especially since most now include end to end encryption.  Recently however some of the larger players have started to make changes which could alter the way we interact with our mobiles forever.  In the western cultures the messaging app is predominately used for messaging, sharing photos, audio/video communication and more recently sending friend’s money.  Some have also started to add Artificial Intelligence/chatbots like Facebook Messenger and Google Allo to make them stickier.

However in places like China and Japan (WeChat /Line)  messaging apps additionally allow you to play video games, shop (eCommerce sites) and use digital wallets which negates your need to leave the app ecosystem at all.  These apps are so popular that WeChat boasts 963 million monthly active users and 600 million active WeChat mobile payment users.  This may be only half of the active users stated by facebook globally however WeChat is little known outside of China until now.

In March 2017  WeChat announced It was looking to launch an office in the U.K. and another European country, alongside its existing presence in Italy.

In April 2017 a London-based FinTech firm (Tramonex) based out of Smithfield, said it had entered into an agreement to integrate its payments infrastructure with WeChat Pay to take advantage of the soaring numbers of Chinese tourists visiting the UK.

This month BNP Paribas announced it was introducing WeChat Pay to retailers in France and subsequently across Europe, providing an opportunity for merchants to streamline the shopping experience for the 7.4 million Chinese tourists who visit the continent each year.

On 9th November 2017 Chinese internet giant Tencent Holdings (the owner of WeChat) announced it was acquiring a 12 percent stake in the US social media network Snapchat whose investment would enable Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed.

Over the last few years very little change has been seen across the social media / eCommerce landscape however this may just be about to all change and I cannot imagine players like Amazon, Alibaba, Facebook etc will take it lying down.

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Its all about Data and Mobile Devices

Do you remember when you wanted a fixed telephone line in your house or mobile just to make telephone calls rather than access the Internet? The world has certainly changed in the last 17 years since the rollout of Broadband in the UK and so has the enterprise’s position on their offerings. Now most companies are moving to become a Data Provider or Creator with the net result that calls/texts are now becoming free and consumers only paying for the data.    This new data focus is certainly consumer driven however consumption patterns are changing too as technology preferences stabilise.

In a recent report entitled “future in focus 2017” by Comscore (although focused on the US market) it highlighted a range of interesting statistics.  The US Smartphone market is reaching saturation at 81%; desktop usage is declining and the tablet market flattening (this is in direct correlation to the increase in 4.5inch + mobile sales).

Since 2013 Smartphones have seen a +99% increase in usage, Tablets +26% and Desktops -8%.  The average person is now spending 2hrs 51 minutes a day on their mobile which equates to 71% of their digital experience (61% in the UK) and the biggest increase in apps are ones which improve real time behaviours i.e. hailing cabs, traffic navigation, making shopping/selling fun, mobile wallets etc. (Waze, Uber, Wish, Venmo, Lyft etc).

However even though everyone is favouring mobile the sales conversation rate is still lower than traditional or tablet channels (although Mobile is the only medium seeing constant growth) so it may be a few years before smartphones take the lion share or possibly not.

Remember mobiles have only been finding their footing over the last few years and have now come of age. It is claimed that certain markets have now reached saturation and the processing power (the new 2017 handsets will be able to handle AR/VR) being offered is similar to PCs.  Also with the increased form factor (4.5 inch +) we will suddenly see smartphones displacing tablets upon replacement.  Don’t also forget that the increased security (Biometrics), waterproofing and high end cameras are making these devices a one stop shop.  Therefore the time is right to start developing for mobile, in the past responsive sites were top priority, however this probably explains why purchases are still being made on traditional channels.  We constantly talk about the digital native and then design applications which are responsive and as we know “one size does not fit all”.  In the future advances will be seen by those whose customer journey is built from the bottom up with small form factors in mind and not the desktop.  There are very few sites that really get it right today so the opportunity if out there for the taking

Fail Fast but have an exit plan just in case you don’t

In our data and regulatory driven world Innovation may be an essential element to disrupt the marketplace however how many failures should you expect before you find that unicorn and how do you account for these failures?

As more and more products migrate to the internet with SAAS and Cloud offerings becoming the fastest way to Innovate and “test and learn” one of the most important considerations in addition to does the proposition “work” is how do you exit (even if it is a success). As most Cloud offerings use proprietary software its not always in the interest of the supplier to make the breakup easy with the hope that you persist with the trial and continue your adoption however depending on your industry the extraction and preservation of the data or transactions history is probably the biggest consideration to a swift exit.

Therefore in addition to considering your success criteria in 2017 why not add another step and plan your exit from day 1. Most products allow you to extract a certain level of data however if your usage exceeds the basic; a retrospective archive is extremely problematic once you pass this threshold. Knowing how you will exit will not only help you if you “fail fast” but it will help drive your operational support procedures if the Innovation is a success as you will always have the sufficient level of data to exit in the future.

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Innovation is also about what you don’t do

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When Innovation is mentioned it always makes you think of disruptive or incremental change which then drives sales or increases consumption however one thing that is rarely accepted as Innovative is the removal of services or technology.  Most companies tend to keep their head in the sand with this and pay the extra costs to support an aging offering rather than to cannibalise their existing product lines for the good of everyone.  However sometimes having the power of your convictions for the greater good of the market not only increases customer perception but also allows for additional innovation. A glass half full is always better than one half empty.

There are numerous types of removal which are necessary ranging from the need to move the Industry forward, new standards set with counteract your products future and following a failed innovation.

The recent release of the Apple iPhone 7 showed this with the removal of the headphone socket where the media focussed on the loss rather than the benefits which were due to the increased space being available inside the body of the Mobile Phone.  The headphone jack has surprisingly been around since 1964 so maybe it was overdue for removal. However sometimes its better to move the market rather than sweat technology way beyond its useful life.  Just think of the auto industry, the engines and designs are constantly refreshed which are not that visible but how long was it before the cassette player was changed to the CD, the FM radio to DAB and manual controls or dials to touch screen and LED.

Some change can also just be cultural and cost nothing however even this can perceptionally move the dial.  In the UK to receive fixed line broadband you have to pay a line rental charge which is never mentioned in the cost of broadband.  This year Vodafone is advertising that it has abolished the line rental where in effect it has just increased the Broadband cost by the cost of the line rental, so even though it costs nothing,  more transparency is can also be seen as innovative.

In this new digital era Innovation should cover everything from Automation to Eradication  as by only doing both will you leverage the greatest economies of scale.

Cashless does not always need to be high tech

In the first world economy, we tend to automatically think high tech when we try to solve any problem and with regards to a cashless society (ignoring contactless cards)  we always start talking about Apple or Android pay via a smartphone as being the way forward.  Over the summer I visited a brand new theme park (Land of Legends Aqua) in Southern Turkey and was pleasantly surprised at its use of technology and the simplicity it offered. The theme park will eventually be vast and currently only the Aqua park is finished however it is totally cashless which is good for a waterpark and enables you to lock away all of your valuables when you arrive.  As you enter the park you are given a wristband (nothing special and the throwaway type you have at a festival) however it contains the technology which allows you to swipe in/out of the park, charge up with funds and pay for anything you need plus if you require a locker you just swipe the wristband on the reader of a flat screen monitor in the locker area, select you need a locker from the options on display and you are then allocated locker which will automatically open for your use.   The use of this throwaway technology reduces all the stress of damage and as it is attached to your wrist the issue of theft is removed.  Over the summer similar types of technology (albeit ones that actually debit your bank account) were also announced in other part of the world.

The RioCard was announced with its waterproof Celego Contactless wristband and its Celego Contactless Sticker both embedded with a contactless chip from Gemalto and certified by Visa and MasterCard enabling all the secure functionalities of traditional contactless EMV cards (Contactless transit cards were first adopted by RioCard in Rio de Janeiro in 2003 and they are now a part of daily life for millions of users) and in Greece a  PayBand (which is a first for the Mediterranean island nation) which uses the Optelio Contactless MicroTag, which is easily inserted in the wristband’s slot by consumers, and is linked to the user’s existing payment card.

Over the last few years there has been lots of talk around Smartphone payment applications and smart watches however will we now see a new era where the banks start offering alternatives to the standard debit card which will not only make peoples lives easier but also reduce fraud if our cards are around our wrists. Imagine if this could also be used in conjunction with Nymi Band technology which uses biometric authentication events as this would prevent others using it if it was lost or stolen.

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Mobile Innovation drives Innovation

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For Innovations to be successful in addition to them being desirable they also need to be affordable and interact with existing ecosystems.  Just look at the original iPad; tablets and touch screens were not new but when you added the App Store and the interoperability with the iPhone it became a resounding success.  Since the introduction of the Smartphone and constant refresh cycle battles between manufacturers the number of Innovations being seen is immense with major changes emerging every other year. The difference with the Smartphone market to others is its massive global penetration and hence any new Innovations suddenly get scale and can drive down the price point for any new technology which suddenly makes it reusable in other form factors.  Just look at the recent announcements at CES and in the press this year.  We have seen flexible displays, thermal cameras, earthquake tracking and the removal of headphone jacks to name but a few.  In isolation these seem interesting however to be successful in Innovation you need to look past the obvious and look at the second generation use of any new invention.  Most Mobile Innovations end up commercially viable due to their scale and in the enterprise, so just looking at the above you can see numerous uses outside of the mobile arena.

When you are looking at innovation in addition to deciding if you “play to win” or have a strategy of being a “fast follower” you also need to look past the obvious and suddenly a multitude of possibilities will arise and rather than just following the crowd suddenly you could become a disrupter.

Wearables, the disrupter of tomorrow

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Like most Innovations wearables are still waiting for the form factor to be more desirable and there to be a greater plethora of functionality to attract the masses. Wearables currently fall into two main camps although others are rising in popularity (Sensors, VR, AR etc.); namely the smart watch and the health tracker albeit both really need a few more technological advances for them to become more mainstream. Currently health trackers have greater appeal due to the lower cost and that the battery that can last up to a week, however the smart watches will encroach upon this as future versions have greater battery life, more apps and they include reliable Health sensors. Even with the limited user cases available today wearables will certainly disrupt the Health, life, Insurance and the mobile sector; however the real excitement comes when you think of the possibilities. Tesla already has an IOS app which will allow its owner to park and retrieve their car from their garage without being in the vehicle. Just think what could be around the corner if you factor in that the devices allow for 24 hour monitoring which could not only help you live longer but the big data statistics of a nation could be used for numerous reasons from enhancing medical science to behavioural analytics. Soon we could be paying with our watches, using the built in cameras to log our activities and possibly our consumption. How long will it be before the smart watch replaces our mobile when we are on the move and if over the air charging was added like they are starting to be investigate for iPhones and laptops everyone would want one.

It may not be tomorrow however will watches become the new mobile?