Altering the approach: Mobile operators and online consumers
Mobile network operators now have an excellent opportunity to draw on an expanding segment of online buyers as a source of growth and savings.
- February 2013
- Eric Hazan, Florent Illat, and Piero Trivellato
Consumers increasingly go online to research and buy mobile products such as service subscriptions, accessories, and devices. Online sales in this area have grown by 33 percent each year over the past five years. More than 25 percent of Europe’s online consumers surveyed buy mobile products online, and there is potential for this figure to rapidly reach 30 to 40 percent — similar to other, more mature consumer electronics categories.
An attractive and affluent target market
For mobile operators, online consumers are an attractive demographic: in addition to being slightly older than the rest of the population, they have higher average household incomes. And they are willing to spend money on telecommunications devices and mobile communications plans. According to response data, online consumers spend 11 percent more on monthly mobile phone bills and 28 percent more on mobile devices than offline buyers. Furthermore, online consumers are more likely to be “digital addicts” — about 30 percent own a tablet computer, double the level for offline buyers. Smartphone ownership is also more common, and about two-thirds of these online consumers use such devices — compared with just 57 percent of those in the offline community.
Online consumers also spend more time surfing the Internet and using data-related applications on their mobile phones; some 61 percent use these services often, while only 37 percent of offline buyers do the same. Data-related applications are increasing in number to support digital activities such as reading e-mail, listening to music, browsing social networks, video chatting, and online gaming.
Finally, online consumers are interested in new forms of technology such as augmented reality, cloud storage, and HD video. More than half of the online consumers in the study claim that they would consider using these data applications, while only 38 percent of offline consumers stated the same.
Adapting offers to new consumers
Online consumers have generally been perceived as a low-end segment that should be served via low-cost channels. Consequently, they have been targeted with the lowest-priced plans. As the online channel grows and gains appeal with a broader and more prosperous customer base, mobile operators should emphasize products rather than price.
Online buyers are consuming more and more data — and doing so using a variety of applications. Accordingly, they are looking for features such as unlimited SMS bundles, multi-device bundles, faster speeds, and other data-related products. In Europe, mobile-data-related offers hold significant sales and growth potential for operators.
While 54 percent of mobile phone users in the United States already have a limited or unlimited data plan, the same is true for only 36 percent of Europeans. At the same time, Europeans place greater value on data access than Americans.
With access to data, additional possibilities for cross- and up-selling open up. For example: nearly 20 percent of smartphone users indicated that they would be willing to pay a premium for advanced security options, and approximately 10 percent would do so for services such as remote medical consultations, cloud-based storage, augmented reality, and high-quality premium video or music streaming.
Flexible offers to match consumption profiles
It seems that one size may not fit all in the diverse digital world, and different devices require individualized mobile service packages. Even within the smartphone user group, average spend per month differs significantly. Compared with Android users, Apple iPhone owners spend 33 percent more on average on their monthly service bill, while Windows users spend 15 percent less. Usage patterns — with the exception of those for voice services — also differ considerably according to smartphone type. Again, Apple users spend significantly more time engaged in data-heavy activities — such as watching videos, browsing social networks, and downloading apps — than Android users. On the other end, Windows device owners consume less mobile data. Thus, mobile operators should offer mobile phone plans tailored to the different phones available.
Companies can also make the most of the opportunity to target “digital addicts” who use multiple devices. Fifty-four percent of the online buyers surveyed said they would pay more for a multiple-screen subscription that would include PC and smartphone Internet access as well as real-time TV in a bundle. Surprisingly, 12 percent of respondents stated they would probably be willing to pay 50 percent more to enjoy this multi-screen feature.
This article was part of the iConsumer: Life Online compendium
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