Management for Professionals Gerrit Heinemann Christian Gaiser Social Local Mobile The Future of Location-based Services Management for Professionals More information about this series at http://www.springer.com/series/10101 Gerrit Heinemann • Christian Gaiser Social – Local – Mobile The Future of Location-based Services Gerrit Heinemann Christian Gaiser eWeb Research Center Chief Executive Officer (CEO) Niederrhein University Bonial International GmbH Mo¨nchengladbach Berlin Germany Germany Translation from German language edition: SoLoMo – Always-on im Handel by Gerrit Heinemann Copyright # Springer Fachmedien Wiesbaden 2014 Springer Fachmedien Wiesbaden is a part of Springer Science+Business Media All Rights Reserved ISSN 2192-8096 ISSN 2192-810X (electronic) ISBN 978-3-662-43963-0 ISBN 978-3-662-43964-7 (eBook) DOI 10.1007/978-3-662-43964-7 Springer Heidelberg New York Dordrecht London Library of Congress Control Number: 2014953248 # Springer-Verlag Berlin Heidelberg 2015 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Preface Mobile Internet and smartphones enable communication anywhere and anytime. Furthermore, in combination with social media, they create a new kind of interac- tion and revolutionize buying behavior, as users increasingly share information about their whereabouts and local offers. This exchange is no longer time-delayed, but shared in real time via the network. The social network, in conjunction with mobile devices, is a companion for all life situations and all topics, which changes the definition of privacy by making part of our lives public. Virtual identities serve as a means of self-expression and are becoming essential, particularly for younger Internet users – termed “digital natives.” “People are happy to share information about themselves with others,” says Mark Zuckerberg. In this respect, the use of social media can no longer be viewed in isolation. Social media are increasingly used in combination with localization and location-based services (LBS) as well as mobile Internet usage. Such interaction forms the basis for “SoLoMo synergies,” which result from social, local, and mobile (SoLoMo) networking and give rise to new opportunities for marketing efficiency. Given that the number of intensive users of smartphones and mobile Internet is set to grow dynamically in the next few years, SoLoMo networking might well increase to the same extent. As of the end of July 2013, 46% of the residential population in Germany already uses a smartphone – according to a recent survey by kaufDA, which will be discussed in detail in this book. The number of smartphone users in Germany exceeded the threshold of 40 million at the start of 2014. The SoLoMo phenomenon is also fueled by the fact that users want to stay constantly informed online. The same applies today to “smart natives,” for whom permanent access to the digital data stream is normal. They demand mobile offers, which they can continuously keep up to date and share with their network. In this regard, local real-time offers with geotargeting, increasing response speeds, real- time information, and augmented reality create interesting mobile added value for SoLoMo users. Added value is undoubtedly provided by online buying and mobile shopping, which is convenient and varied, and can be carried out 24 h, regardless of location. Most customers can no longer imagine a world without online shopping. This is exactly why brick-and-mortar retailing should not get left behind, especially since the Internet has become a central part of many people’s lives. Consumers do not want to buy everything online, nor do they want to forego the advantages of the online channel just because they also visit shops. Some companies therefore let v vi Preface their customers shop in parallel and tie them to the brick-and-mortar store through location-based services. Location-based services (LBS) are mobile services which access localized and situation-based data. These services are becoming largely important, particularly in terms of the situational adequacy of mobile commerce offers. They also have a huge impact on existing commercial and retail structures, since the mobile Internet – in combination with LBS – has become a disruptive technology, which is redefining commerce as a whole. The “Potential for Location-based services” study, conducted by the eWeb Research Center at Niederrhein University of Applied Sciences (Germany) in collaboration with kaufDA/Bonial International Group, the global provider of location-based advertising services, and in cooperation with the Edelman agency until September 2013, provided the impetus for this book. Our primary aim was to build a bridge between theory and practice and create a user-friendly design. LBS specialists in the Bonial International Group – at international locations in the USA, Germany, France, Russia, and Spain – observed that retailers have identified the explosive nature of increasing mobile Internet usage for their own store and want to develop a better understanding in order to respond with appropriate measures. This book is intended to help close the information gap. The ongoing Delphi study on the subject of the “Future of Commerce,” which is being conducted under the auspices of eBay GmbH Deutschland and APCO Worldwide, was also a source of encour- agement and support. We would like to express our thanks to Ms. Sarah Stevens for actively supporting us in the conceptual design, evaluation, and documentation of the study. We are also grateful to the Edelman agency, and in particular to Ms. Susanne Richardsen, for their constructive and uncomplicated cooperation. Mo¨nchengladbach, Germany Gerrit Heinemann Chicago, USA/Berlin, Germany Christian Gaiser List of Abbreviations 2G 2nd Generation 2.5G 2.5th Generation 3D Three-Dimensional 3G 3rd Generation 3.5G 3.5th Generation Fig. Figure Admin Administration AGB (“GTC”) General Terms and Conditions AGOF German Online Research Consortium API Application Programming Interface App Application ARM Advanced RISC Machine Asw Absatzwirtschaft (marketing journal) BITKOM German Federal Association for Information Technology, Telecommunications and New Media Bn. Billion B2C Business-to-Consumer B2B Business-to-Business BVH German E-Commerce and Distance Selling Trade Association CAGR Cumulated Average Growth Rate CATI Computer-Assisted Telephone Interviewing CBC Customer Buying Cycle CCRP Customer-to-Customer Reference Points CEO Chief Executive Officer CGA Consumer-Generated Advertising CGC Consumer-Generated Content CIC Customer Interaction Center CM Category Management CNC Costs New Customer Comp Company CPI Cost per Interest CPC Cost per Click CRM Customer Relationship Management vii viii List of Abbreviations Disc Discount DMB Digital Multimedia Broadcasting DIY Do-It-Yourself DSL Digital Subscriber Line DVB Digital Video Broadcasting e expected E-/e- electronic EAN European Article Number EAV Electronic Added Values EBIT Earnings Before Interest and Taxes EBITDA Earning Before Interest, Taxes, Depreciation and Amortization EC Electronic Cash ECC E-Commerce Center ECR Efficient Consumer Response EDGE Enhanced Data Rates for GSM Evolution EHI EHI Retail Institute et al. et alii etc. et cetera e.V. Incorporated Association FAZ Frankfurter Allgemeine Zeitung (newspaper) F Following (et seq.) Ff Following Pages (et seqq.) GfK. Gesellschaft fu¨r Konsumforschung (consumer research company) GmbH Limited Liability Company GPRS General Packet Radio Service GPS Global Positioning System GSM Global System for Mobile Communications P/L Profit and Loss Statement HMWVL Hessian Ministry of Economic Affairs, Transport and Regional Development ed. Editor HSDPA High-Speed Downlink Packet Access HSPA+ High-Speed Packet Access+ HSUPA High-Speed Uplink