The retail industry is experiencing a revolution on a par with the introduction of plastic payments in the 1950s or the launch of the internet and e-commerce in the early 1990s. The mobile device, a gadget we check more than 200 times every day, is changing the way we discover and buy products and services.
PayPal predicts that we won’t have physical wallets by 2016. Visa Europe predicts that 50% of all its transactions will be made via mobile by 2020, and retailers are already reporting that up to 12% of their traffic comes from mobile channels (eDigitalResearch, May 2011). There is no doubt the market is buzzing with expectation and retailers are starting to catch-on.
As the internet caught fire and UK consumers flocked to buy anything from music files to bicycle parts online, many retailers were left struggling to catch up with this changing retail model. The challenge was to retain customers, but competition was coming from new players who understood search engine optimisation (SEO), online marketing and the customer’s desire to buy anything from them at any time.
With mobile, retailers know they need to move quickly to stay ahead of the curve, provide super-targeted marketing and enable their customers to buy what they want, when they want, and where they want it. Mobile is unique – it isn’t just another box on a retailer’s multi-channel strategy presentation. Mobile supercharges all its channels.
The mobile is a highly personal device. It is smart, always connected and capable of two-way interaction. Mobile retail isn’t just about moving your wallet to your device or delivering internet sites to your mobile; it has the potential to revolutionise the entire retail experience. For example, the way we search the internet, the way we receive marketed, make buying decisions and pay for things.
We believe that one of the ways to realising the true potential of the mobile device is when you put the checkout on the device itself. Your mobile already has the technology to identify a product almost any way via mobile – through an alpha-numeric code, through a transactional QR (bar) code or through image or audio recognition.
Product identification can take place anywhere a customer sees a product. It might be a billboard advert, in a magazine or newspaper, in a retailer’s smartphone app, mobile website or on a social network – even in-store, where an out-of-stock size is required.
A mobile can provide an instant, universal checkout in any channel. If your preferred payment and delivery details are stored securely on your own mobile device, you can purchase anywhere, any time at the touch of a few buttons.
If you move a universal checkout experience itself to the mobile, you streamline a process that is turning customers off left, right and centre.Our research with QuBit found that retailers lost £2.4bn in revenue last year because they made it difficult for customers to checkout in digital channels.
Consumers are becoming used to single sign-ins, for example, Facebook Connect, to their mobiles being a one-stop shop for information or a personal assistant, connecting your personal data, your friends and the environment around you. When customers have to create multiple accounts to buy from each retailer or get diverted out of the mobile or social environment to different URLs when trying to buy, it goes against the grain.
Social commerce holds a particular opportunity for retailers willing to move quickly to meet changing consumer behaviour. Booz and Company estimates the social commerce market to be worth $30bn within three years.
But for this ambition to be realised, there need to be a few changes to allow for instant sales conversion. At the moment, social networks –Twitter, Pinterest, Facebook and the like – are see now, buy later platforms.
I can be a fan of a brand, like them, pin it and interact with them through competitions etc. But I cannot buy directly from the platform – it’s a like a shop with no till in it. I have to go to the retailer website or go in-store. This inherent disconnect is another hurdle that the consumer has to jump to make a purchase.
Mobile is changing retail and there are multiple technology players in the market vying for attention, from Google to Apple, the mobile network operators and banks. The challenge here is that each player is trying to operate independently. The key to mass adoption is ubiquity and a network approach. For example, the “one bank, one handset” play doesn’t work for retailers who don’t want to alienate huge chunks of their existing and potential customers. Universal, robust, safe, smart technology that doesn’t require huge upfront integration costs is now available to retailers, and there is no limit to the possibilities in terms of increased sales conversion.
We have all read the predictions and heard the buzz words but this isn’t a fad. This is a fundamental shift in consumer behaviour and retailers have a unique opportunity to move quickly and take advantage of the true power of mobile. We have spoken to and are working with a large slice of the UK high-street, media owners, banks and other key industry players – we know the tides are turning.
Only time will tell who will flourish in this new era.