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News & ArticlesThursday 23rd June 2016
One Click Checkouts and Pay By Selfie: The Rise of Mobile Commerce.
Buying stuff from mobile phones has been talked about since Coca-Cola and Nokia first installed vending machines in Finland in 1997 that accepted payment via text message, or SMS as it was then. It’s been a long and tortuous road since but, according to recent Nielsen figures, mobile technology (including tablets) is now fully embedded into the modern shoppers’ psyche.
Certainly millennials or Generation Y (the generation born in the 80s and 90s), who Rebecca Huntley says, in her book The World According to Y, see technology as “their natural ally, a necessity rather than a luxury”, have been largely responsible. This generation has been the principal target for mobile retail strategies, which makes sense. Why target the mixed bag of dabbling Generation Xers, who still talk about the days before the internet, when you can target the group that doesn’t feel stupid talking to a smartphone?
“Every brand we deal with talks about millennials,” says Ryan Hall, founder and managing director at agency Nice, which works with a number of brands on developing mobile platforms including Flybe, Ticketmaster, First Direct and Trainline. “If you get it right for the millennials you will get it right for everyone else.”
All the numbers are pointing to a steady shift towards mobile. We’ve known that for a while now, having witnessed the frenzy of the annual Black Friday and Cyber Monday shopping sprees where websites fall over and everyone seems to go into a sort of digital funk – and yet the numbers always improve. In February an IMRG report claimed that in the fourth quarter of 2015, over half of online sales (51%) were made through mobile devices, a rise of 11% on the previous year.
The consensus from a number of mid-sized businesses polled is that there has been a shift this year from consumers using mobiles to browse and then buy in a shop or on a desktop to actually completing purchases via mobile apps or browsers.
Skyscanner, a travel booking site launched in 2003, agrees, saying it is increasingly seeing people not just plan but also book trips on a mobile device. Between 2014 and 2015, mobile web bookings grew by 24% and they accounted for 42% of all conversions. On top of that, mobile visitors grew 60% in that time period, representing 59% of total visitors.
The trade-off between ease of use and traditional card security is lessening, particularly with biometrics.
So why the sudden change? It correlates with the launch of a new flights app at the end of last year, which the company says has improved the overall experience for mobile users. It’s an interesting point. The native apps versus mobile browser argument has been raging for a while now and most businesses tend to straddle both camps, developing apps but also optimising sites for mobile browsers.
Google’s instant apps announcement last month could reshape the market as it advocates an approach based on both but, until then, it’s all about focusing on covering as many bases as possible.
Tom Jeffrey, head of e-commerce at clothes chain Jules B,says that naturally the company pushes its customers towards its app, offering incentives such as 10% discounts. The reason is that it is “quicker and the experience is optimised for a particular device”, he says. Like many businesses, Jules B has seen a surge in online with mobile driving growth. Interestingly it is spread across age groups with even the 60- to 70-year-old age bracket holding its own.
Recent A/B testing revealed that its customers preferred a practical checkout over a “sexy looking, well designed one”, says Jeffrey, but it is now looking to improve its four-stage checkout, perhaps reducing the number of clicks to two or even one.
“It’s a big divide at the moment between one-stage and four-stage checkouts,” adds Jeffrey, who admits that as a smaller business, it tends to watch how the likes of Asos and Selfridges fare with various technology changes and then pick off the best bits. Certainly Amazon has done well with its one-click ordering – so is the shopper mindset changing? Have Amazon, Apple Pay and the rise of contactless cards boosted consumer confidence in technology but also raised the bar of expectancy?
Rytis Vitkauskas, founder and CEO of London events and ticketing business YPlan, says: “There’s an expectation that any transaction will take a minimum amount of effort. The Gen-Y person doesn’t really think about buying something as a transaction any more. It’s an act of consumption where payment is an afterthought and must be seamless.”
YPlan’s answer to this is a two-tap buying process regardless of venue or event. It is, says Vitkauskas, “no longer a choice but rather a requirement for any consumer-facing commerce platform”.
The trade-off between ease of use and traditional card security is lessening it seems, particularly with biometrics, but that is probably as much a cultural thing as an actual technology shift, especially given that paying for goods in-store with a mobile device still takes time and often demands a pin to be entered anyway. Maybe we are expecting too much?
Certainly new technology can have a big impact on sales. Fernando Fanton, chief product and technology officer at online takeaway ordering service Just Eat, says that adding Apple Pay as a payment method in July last year (it was an early adopter) saw the business complete “over half a million orders using Apple Pay in the UK alone – faster growth than any other payment method”.
Perhaps this suits the nature of the business with its high-volume, micro-payments fast food for fast money? But there again, if it’s a process consumers want, surely all businesses should be looking to move this way across all sales channels? Apple Pay, Android Pay, Samsung Pay, smart watches and wearable devices are not going to go away, at least not until there is something better. Research firm Novonous believes these payment technologies will grow at a compound annual growth rate of 36.26% by 2020.
Amazon, of course, plans to be a large part of this growth. The irrepressible online retailer recently announced plans to start selling groceries online in the UK (it has been operational via a mobile app in the US since 2011). In March it submitted a patent application for payments by selfies. It’s the sort of crazy idea that just might work, especially as recent research by Lux Research highlights the growing need for biometrics to improve m-commerce confidence and adoption. And that’s surely the point. If you can make it easy and remove the fear, any generation will use it.
For the moment at least, its future remains in the hands of those to which it is second nature. For the rest of us, don’t ditch the wallet and purse just yet.