Payments

Daily Review: The Rise of a Mobile-Dominant Business Strategy

MEDICIGlobal Head of Content

A significant part of the global population lives in a mobile-first world, consuming or at least performing a research on a range of services and products on smartphones. Moreover, very successful alternatives to conventional banks are mobile-only and over a third of global online transactions are now mobile. In addition, ~90% of mobile data traffic will be from smartphones by the end of 2021.

Not only do mobile technology and mobile-centricity overall play a significant role in democratizing financial services, they also fuel stronger engagement and loyalty. A study by Google called How People Use Their Devices suggests that more than one in four users only use a smartphone in an average day – almost twice as many as those who only use a computer. Moreover, the study indicated that smartphones take up the most usage time on an average day – those who use a smartphone spend almost three hours per day on it.

In lieu with these findings, Nitish Jain, Assistant Professor of Management Science & Operations at London Business School, emphasizes in its recent article that mobile-mobile has emerged as the third engagement channel along with traditional PC-online and offline.

“Mobile is not just another traditional online channel. Its ubiquitous access, ability to track consumers closely and small-size constraints make it distinct. Managers need to know how a consumer behaves differently when they shop on mobile versus when they shop on more conventional online channels such as the PC.” – Nitish Jain, Assistant Professor of Management Science & Operations at London Business School

Pick #1. You Don’t Know Your Customer (Unless You’ve Mastered Mobile)

Firms must shape their strategies to maximize the potential of PC-online, offline and mobile-online, Nitish Jain, Assistant Professor of Management Science & Operations at London Business School, believes. Our behavior on mobile is different from that on desktop computers and other larger devices. A mobile-dominant future demands a mobile-specific strategy.

“Mobile gives you almost 24/7 access. You can search for whatever you desire multiple times a day.” In other words, it’s easier to search for longer. “In contrast, a PC offers a static environment that constrains your ability to search for longer periods.”

“Mobile affords you more time to search and therefore, a larger search budget. But the device is small. You can only evaluate a few products at a time.” – Nitish Jain, Assistant Professor of Management Science & Operations at London Business School

This makes searching inefficient and pushes up the search cost. The combination of the two – having a large search budget and a high search cost – determines the type of products customers pick: niche or popular.

“In the offline world, 20% of products typically accounted for 80% of sales. But with the advent of online markets, retail sales became more distributed and niche products became more popular.” – Nitish Jain, Assistant Professor of Management Science and Operations at London Business School

This shift from bestsellers to niche is known as the long-tail effect. Online search functionality gave consumers the ability to hunt for exactly what they wanted. Unique became the name of the game: the top 20% of products accounted for much less than the usual 80% of share.

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Pick #2. Bitcoin Exchange Coinbase Buys Earn.Com for a Reported $100M and Adds Key Executive

Digital currency exchange Coinbase made a deal to buy Earn.com, which lets users send & receive digital currency for replying to emails and completing tasks. As part of the acquisition, the crypto company will bring on Earn’s Founder & CEO as its first-ever CTO. One key appeal aside from the new hire is Earn’s real-world use case. Many platforms in the cryptocurrency space, at the moment are hypothetical. Earn, which was originally backed by Andreessen Horowitz, and Tyler & Cameron Winklevoss, can compensate users in any country for replying to an email or completing a simple task, even if they don’t have a bank account.

Coinbase has been busy on acquisition front. On Friday, the company announced a deal to buy mobile app browser and wallet for the Ethereum blockchain called Cipher Browser. Earlier in April, Coinbase announced a new incubator fund for early-stage startups called Coinbase Ventures.

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Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.