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As I mentioned last week while writing about PayPal’s new app updates, we just published a big report on the state of the union of mobile shopping and payments.

This is of course an exploding area with lots of interest and investment. But it also has equal parts confusion as there is lots of competition and experimentation with different standards at the sector’s early days.

Below is the executive summary of the report and you can learn more about obtaining the entire thing at the paper’s landing page or just email me directly (mbolandATbiakelsey.com).

This will be a big area of focus for us. To unpack some of the paper’s findings, you’ll also see below the exec summary a short video we shot earlier to bat around some of the takeaways.

Lastly, we’ll discuss it further this week in Austin. Hope to see you there.

Executive Summary

There’s a mobile revolution underway, evidenced by all the people staring down at their devices. The seductive glow of smartphones – now at 60 percent penetration in the U.S. – has stolen our attention, even from friends and loved ones.

Among the many areas where the ongoing smartphone revolution will change our lives, mobile shopping is perhaps heating up the fastest. This includes using one’s mobile device to find, compare and buy things in the real world; everything from lunch to a new TV.

In the online world of the last decade, it was all about e-commerce: buying things online to be shipped. This is playing out in mobile with what’s known as m-commerce. But the larger opportunity – given the mobile device’s portability – is mobile-assisted offline shopping.

Lots of the investment and innovation in mobile apps and content will focus on this larger pie, as e-commerce and m-commerce only comprise 7 percent of U.S. retail spending. The rest is offline in physical stores, especially for products that shoppers want to see before they buy.

As this continues to play out, mobile should help rather than hinder bricks and mortar businesses. The same can’t be said for many e-commerce players like Amazon. Mobile will be an important utility for shoppers and merchants if embraced in the right ways.

Possibilities include storing consumers’ payment information within smartphone apps, to be securely transferred at the point of sale (POS). It also includes merchant-facing mobile hardware that allows them to accept credit card payments in convenient ways.

In addition to easing transactions for consumers and merchants, mobile payment products are developing as tools to track consumer behavior. This creates opportunities for targeted marketing and different ways to engage customers.

Mobile payment products also offer the potential to improve customer acquisition, as well as vital areas such as retention, loyalty, and operational efficiencies like inventory management and cash flow. And for advertising, it has the potential to reach the “holy grail” of better ROI tracking.

Over the last decade digital advertising has sought this clearer ROI through things like online search ads. But search and online display advertising don’t capture the complete path to the physical cash register where, again, most purchases take place.

Now with the mobile device’s growing use, portability and capabilities, the opportunity exists more than ever to create this measurable path between various forms of marketing, purchases, rewards programs, and repeat business: A closed loop.

It’s still too early in the life cycle of mobile shopping and payments to establish a single standard. There’s a great deal of innovation and experimentation in these early stages and the following pages seek to provide the “lay of the land.”

This paper follows BIA/Kelsey’s previous mobile insight paper From National to Local: Mobile Advertising Zeros In and takes the next step in the purchase cycle: engaging users while shopping, influencing their behavior, facilitating conversions and collecting data.

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