“The future will be owned by those companies that harness technology to make the consumer shopping experience easy, efficient and fun”. This is the concluding prediction from Nielson’s retail forecast, which has found that by 2015 Smart Phones will be the primary vehicle to engage retail customers.  And this is no surprise to us, given what we found in our iPhone study.

The advantage of the Smart Phone for consumers is that it can deliver personalised messages, and tailored experiences to the individual – in real time. According to Nielson, geographically specific information on price, promotion and product will transform the retail landscape. Price will take a back seat in driving traffic, as retailers contend to differentiate themselves by their digital and social media strategies.

Apps that enrich the shopping experience will be the front-runners in gaining customer loyalty, distinguishing themselves as the brands that make shopping easier. Nielson suggests that by 2015 Smart Phones will manage “everything from household budgets and pantry inventory to tax preparation and filing”. In a world where this technology is present in the most ordinary of chores, retailers that simplify tasks and give consumers informed choices will keep ahead.

In 2010, we are already seeing a dramatic shift in shopping behaviour and customer mindsets – now it’s up to brands and retailers to respond.

Last week was a buzz with all the talk of the new iPhone  4.  What was interesting to read was how much it delivered in terms of the issues current iPhone users whinge about.  Our iPhone community highlighted a number of areas iPhone users would like to see improved.

Firstly the camera.  While the iPhone generally has managed to replace the need for carrying a separate  iPod, diary, and so forth, it was not the case with the camera.  Our iPhone community members told us that the low quality camera meant  they rarely relied on it and certainly did not see it as a replacement for their digital camera.  But an improvement from three to five megapixels with 5x digital zoom and  inbuilt LED flash will certainly make a difference.

“I’m sure the next generation iPhone will have a great camera and that gives you a reason to upgrade.”    Glenn, iPhone community member

What else did our members want to see improved :

• Multi-tasking – again the iPhone 4 will fulfill this requirement
• Screen rotation lock - we got it for iPad but as far as I know not the iPhone still does not readily allow for this.
• Flash Player – doesn’t look like this is going to happen

Will these and other improvements be enough of a reason to upgrade?  Not sure but the latest figures reported in Adnews today show the iPhone is certainly taking the lead in the Smartphone market, which doesn’t surprise us given our findings in our iPhone Insights Community.

Updated 17/06/10:  Going on the strength of pre-orders it seems the iPhone 4 is enough of a reason to upgrade.  According to SmartCompany pre-orders of iPhone hit new record with 600,000 in one day.

While debate rages whether the iPad is set to save or redefine publishing, consumers are quietly contemplating whether there is room in their lives for another digital device. We know it looks pretty, and had Apple-cool credentials, but do we really need one?

Even amongst Apple fans there is some question about the purpose of owning an iPad. To this end the answer is often, ‘what’s the point?’. We’ve already got desktops, laptops, gaming units, smartphones, and maybe even ebook readers. Or maybe we’re missing the  actual point, that its not the iPhone users who will rush to embrace the iPad, but others who don’t see it as an overgrown version of their smartphone.

Our study of iPhone users, via an Online Insights Community, revealed that for most, the iPad wasn’t high up on their wish list. It was considered too large to be truly portable, and the lack of connectivity to other hardware meant that it wasn’t a legitimate substitute for a laptop or netbook. Beyond the obvious compatibility concerns is the issue that it is difficult to imagine a use for the iPad. Especially when many people felt that it would predominantly be used in-home. There is speculation that ‘maybe it will be good for…’ but not a lot of ‘I need it for…’.

“It doesn’t fulfill any need I have, so it’s not even a consideration for me”

It will be interesting to observe too, how quickly iPad users take up paid apps, especially those related to publishing and media. iPhone users are quick to identify that there’s a mounting cost once you factor in the hardware, data download and the price of apps. Justifying the additional spend on iPad apps, will require a change of attitude and behaviour in the consumption of content. It’s early days and iPad is the latest toy, but many people are waiting to see both how a second-gen iPad will differ, and how the publishing world will respond with apps.

And despite all the debate about whether there is a need for such a device, 1 million iPads were sold in just 28 days (compared to the 74 days it took to sell this many iPhones).  So while we may not see a need for it – it seems the iPad may find a place in our lives.

And me – well I’m like the million others who want another toy, whether I need it or not!

How many take away coffees do you buy a day? Even if it’s only one, that’s probably $3.50 out of your pocket that you spend without a second thought.

So what about spending  $2.99 on an iPhone app – maybe a game to use in your spare time, or a utility designed to save you time. Or how does $1.19 sound, because that seems to be a common price point? Why you could even get three apps for little more than a latte.

You wouldn’t think that it would be an agonising decision, but we were surprised to find that price is a sensitive issue when it comes to buying apps. And iPhone users themselves don’t understand why they waiver over spending less than $3 on something lasts so much longer than a hot drink. Here’s a taste of some of the comments from our iPhone Online Research Community:

“I am dancing around the idea of a $6 app at the moment that I really want (but not rushing in). Weird psychology really since I have no problem throwing far more than that away on far more frivolous things”

“I only pay for stuff with a lot of good reviews and things I know I’ll like. Otherwise it’s free. Even if it’s an app I’m not sure about and it only costs $1.19 I’ll think twice, three times.. sometimes four times”

“I don’t feel like I should be paying any more than I already am/have for the iPhone considering I use it mostly for communication purposes. I don’t think I will ever pay for an app, but I’m waiting for something to prove me wrong!”

Our frugal friends were a bit bemused at their own behaviour, and put it down to both the intangible nature of apps, and the predomiance of free apps which create a mindset that all apps should be free or so cheap that purchasing doesn’t require a second thought.

There are people who are willing to spend ‘big’ money on apps, whether it’s a $9.99 Jamie Oliver recipe collection or a $69 navigation system. But the apps they pay more money for have to do something - they’re rarely games or time wasters. Even so, our ’spenders’ were more likely to trial a ‘lite’ version before downloading the full paid-for version. Try before you buy matters even more in appland, where the refund policy is non-existent.

There’s no doubting that apps are what makes the iPhone eminently attractive and indispensible, but iPhone users are cautious with their money, and while so many apps are free, many users are happy to dabble in app-lite. This may have interesting consequences for iPad, both in terms of users’ propensity to purchase 3rd party content and apps, and the pricing strategies employed by content providers and app developers. And once big brands with big development budgets cotton on to creating new (free) brand experiences via apps, maybe we’ll become even more reluctant to open our wallets.

Back in January we announced that we were about to start an iPhone community to explore how smart phones can be used in online research communities, and to gain a deeper understanding of the phenomenal consumer response to the device itself.

Well, after many weeks of conversation, we’ve certainly discovered much more than we anticipated. To some extent we expected to hear that people were keen users, but these guys ‘love’ their phones. And love might actually be a mild description. How about ‘besotted’ and ‘can’t live without it’. What’s been most fascinating is how each user has very unique way of using their iPhone – it’s so much, much more than a communications device. Importantly for Apple, none of our members can imagine how their iPhone could be replaced by anything else, and it’s potentially creating new legions of Mac converts along the way.

There’s a wealth of information coming out of our community on apps, and how and why companies should be using apps to engage with their customers. One clear insight is, if you are going to create an app, make sure it hits the mark. It only takes seconds to delete a useless app, and there goes your direct mobile connection to that customer. iPhone users are hungry for high functioning apps which make a difference to their life in some way – whether it be information, entertainment, connection, transaction, organisation, etc.

Our insights haven’t all just been about the iPhone, we’ve also been testing different ways of engaging community members to enhance data collection and the depth and richness in online community conversations. While we understand not all market research community members have smartphones, they will become increasingly prevalent, so as an industry we need to look at smartphones as one of our ways of bringing customer conversations into our clients’ boardrooms.

I’m going to let ‘Rachael’ from the community have the last word…

“I love gadgets, in particular, the ‘honeymoon period’ when you try out all the functions and play around and have fun with your new toy. You always reach that point though, where there’s not much more to find out and your new toy slots into your life, mundane as all the other stuff or is discarded as a short-lived novelty. Well, let me say, my iPhone and I are still honeymooning nearly a year after we first met ;) The iPhone has far exceeded my expectations… still in love….”

The last couple of days, all we have heard is iPad, iPad, iPad.  While I’m not sure iPad will be as revolutionary as the iPod or iPhone, what I do know is that Apple will make a lot of revenue from their iTunes store.  Did you know that in 2009, Apple accounted for 99.4% of all mobile app sales?

According to the Gartner report that’s a big chunk of the $4.2 billion in mobile app revenue that Apple scored in 2009 alone.  Apps are growing by the minute with the market estimated to almost double in the next year, to 4.5 billion apps.

For marketers this creates a number of interesting questions and opportunities:
- What makes a good App?
- What are consumers willing to pay for?
- How does the market learn about Apps?
- How do I make sure I get my Apps noticed ?

Over the coming months Latitude hopes to answer some of these questions with their iPhone user research community.  Not only will we ask members to ’show us your Apps’ we want to drill down to understand how they find, choose and interact with their Apps.  Which ones can’t they live without and most importantly, which ones add to their brand experience.

So what Apps can’t you live without?

I’ve been searching for data or case studies on the use of mobile devices in qualitative research and, alas, there’s not much information out there at the moment. A lot of the studies on using mobile devices in market research relate to SMS or survey data capture. Vision Critical has conducted a mobile research study which provides some good insights on quantitative mobile research, but only eludes to the differences in qualitative responses.

But maybe that’s good for us, because we’re about to start a test community amongst iPhone users, that will both provide insights on the iPhone, and how smartphones can be used in online research communities.  Given that, according to Morgan Stanley, the iPhone/iTouch has been adopted faster than any other consumer technology device in history, the research industry can’t afford to ignore smartphones when it comes to engaging people in text based conversations. You can wade through the reams of juicy data on mobile internet from Morgan Stanley here.

Of course, there’s nothing new about using mobiles for social networking. The Facebook app does happen to be the world’s most downloaded free iPhone app.  So if people are already chatting and connecting via mobile devices within these social networks, why not with us researchers via our online communities?

Time will tell…but there’s a clear need for researchers to be able to keep up with our clients who are developing branded applications as another way to reach their customers.  It’s about going to where thepeople are, not bringing them to us for sandwiches and a chat around a table.

So keep an eye out for updates on the iPhone community and the outcomes. We’ll be sharing our findings in coming months.