The mobile wallet market is about to get big, huge even. According to a new report published by Transparency Market Research, the global mobile wallet market will reach $1,602.4 billion by 2018. In EMEA it will grow at a CAGR of 30.7 percent from 2012 to 2018 and EMEA will be the largest mobile wallet market in the world by 2018.
EMEA accounted for about 40 percent of the global mobile wallet share in 2011, but the Asia Pacific region is expected to see the fastest growth over the next five years.
The staggering figures sound optimistic to say the least, but Transparency Market Research is basing them on a few emerging trends that hold a lot of promise. The outfit found that affordable NFC enabled phones and POS (point of sale) systems will be the main drivers of growth over the next few years.
Retail is currently the biggest application for mobile wallet services and the trend is set to continue, due to ease of payment using smartphones and initiatives to introduce new POS terminals in convenience stores. Vending machines are also a potent market. Mobile network operators are expected to play a pivotal role in future mobile wallet adoption.
Unsurprisingly, the key players in the market will be Visa, MasterCard, American Express, PayPal, Google and others from the list of usual suspects.
However, it won’t be just smooth sailing. Quite a few consumers still don’t know how mobile wallets actually work and we’re pretty sure that many aren’t even aware of their existence. Security and privacy remain sources of concern, too.
According to the latest study from Martini Media, affluent consumers are 47 percent more likely to make an online purchase than their not-so-well-off counterparts. The report found that rich shoppers buy products and services after the holiday season and continue their sprees well into Q1.
A research report released by TransFirst and ControlScan has found that small merchants need to step up their game in m-commerce and optimise their websites for mobile. Otherwise they might be missing out on some serious dosh.
The survey, called Small Merchants and Mobile Payments: 2013 Survey on Technology Awareness and Adoption, found that a staggering 82 percent of e-commerce merchants don’t even know whether a purchase on their website came from a mobile device or a PC.
This is a rather alarming figure, since data from those that do distinguish between PC and mobile shoppers indicates that mobile visitors account for a significant portion of online sales, and mobile is growing fast. A survey conducted last year found that 10 percent of respondents used tablets and smartphones to accept credit card payments, but the figure has shot up to 17 percent in less than a year’s time.
Another key finding of the survey shows 49 percent of e-commerce merchants know their websites are not currently optimised for mobile devices and an additional 17 percent say they don’t know or are unsure about their site’s current status. This indicates that as many as two thirds of these merchants may be putting up roadblocks to the growing number of mobile consumers.
“The mobile consumer is knocking at the small merchant’s door,” said Craig Tieken, Director of Product at TransFirst. “Business owners who aren’t already up to speed with mobile payment acceptance need to have a viable plan of action to get there.”
Dave Abouchar, Senior Director of Product Management for ControlScan, said the survey shows that small merchants have a real business need to adopt mobile trends. He stressed that now is the time to embrace the new trends if they don’t want to miss out.
America pioneered online shopping and its e-commerce outfits are now spearheading another trend. They are thinking of opening traditional brick and mortar stores.
Online juggernaut Amazon is said to be actively exploring a store concept and it is not alone. Bonobos, Warby Parker, Sigma Beauty and others are doing it as well.
It might sound surprising, given the e-commerce boom, but online outfits are looking ahead. They can’t hope to sustain current growth rates much longer, so they might be compelled to branch into physical stores sooner or later.
“But we wanted to put a face on the brand, and we wanted people to touch and feel the product,” Sigma cofounder Simone Xavier told CPA Practice Advisor.
Although online retailers tend to have much lower costs than their traditional counterparts, websites can’t completely replace showrooms and stores, or good salespersons for that matter.
“It is strange to see e-commerce sites open physical stores,” said retail consultant Jeff Green. “But when you think about, it’s not surprising. The most successful retailers are going to have a combination of bricks-and-mortars and digital sales. For online retailers, you might as well get to the sale as close as you can.”
Of course, online retailers will stay true to their roots and their physical stores won’t replace online. Many probably won’t bother with physical stores at all and even those that do are likely to face a lot of challenges.
It sounds counter intuitive, but according to a survey commissioned by UPS, retail apps might actually cause consumers to do less price comparisons and more shopping. The vast majority of shopping apps do the exact opposite, they are designed to find the best deals and pinch pennies.
However, the survey revealed that 46 percent of US online consumers are less likely to “comparison shop” once they are immersed in well designed apps peddled by the retailers, reports Business Insider. It sounds like good news for everyone who ever tried to justify the expense of developing a proper app for their business.
Interestingly, the survey also found that shopping satisfaction was better on a tablet than a proper PC. The experience on smartphones lags behind both tablets and regular PCs, which probably has something to do with screen size.
Of course, this doesn’t mean that retailers with good mobile apps should try to gouge consumers. Most people still like to browse and compare prices. There is no substitute for good deals and good service.
A pan-European retail survey commissioned by Fujitsu reveals that most retailers believe stores are still important despite the fact that online shopping is going mainstream.
Even in the age of multichannel, 65 percent of Europear retailers interviewed said they believe the importance of stores is rising rather than diminishing. However, eight out of ten believe online is the top distribution model for the future.
The survey found that the humble store will continue to serve as a hub for retail engagement with “connected” consumers. Ongoing competitive pressures and the widespread adoption of smartphones will force retailers to combine the efficiency of online, while at the same time delivering a good in-store customer experience.
It echoes the findings of a recent Google survey, which concluded smartphones are slowly starting to improve the shopper experience both at home and in actual retail stores. In other words, retailers cannot afford to ignore either component of their multichannel approach. Fujitsu’s survey also stresses the importance of a unified view of all customers across all channels, on top of technology innovations designed to deliver new multichannel solutions.
Retail managers in some countries believe the importance of stores is going up, especially in France and to some extent in Italy, which is also betting on hypermarket and supermarket models. However, German retailers believe online shopping is currently more attractive to their customers. In the UK, however, there is a greater balance across all models.
“It is clear the store remains the shopping ‘hub’ for the majority of consumers across Europe, but the store operating model is changing rapidly to meet the needs of the multichannel shopper.” said Richard Clarke, Vice-President, Global Retail at Fujitsu. “Fujitsu helps retailers to achieve this goal by simplifying their technology deployments and radically increasing agility and customer intimacy.”
Although e-taliers and m-commerce are still on the rise, the study found that traditional retailers are still convinced there is plenty of room for brick-and-mortar stores in the future of retail, no matter how connected it might be. However, service is slowly becoming a key value-add for the store, and some hybrid services such as click and collect are also emerging. Interestingly, British retailers lead the way when it comes to their confidence in traditional stores and their role as a shopping point.
Although there are thousands of penny pinching price comparison sites out there, it seems online shopping is pretty big among affluent consumers who really don’t need to save at all. According to research released by the Shullman Research Centre, the rich love to do their shopping online. Apparently they don’t want to mix with their serfs, for whatever reason.
The survey found that the vast majority of affluent consumers tend to research products online and make the purchase from an online device. Most of them still rely on desktops, at 64 percent, while tablets and smartphones are used by 18 and five percent respectively.
“I do not think luxury marketers are totally aware that [consumers] are using online for research and are getting comfortable buying that way,” said Bob Shullman, founder and CEO of the Shullman Research Center. He added that consumers enjoy convenience and that is exactly what online shopping is supposed to deliver.
To some extent it sounds a bit counter intuitive, as one would expect people to actually touch and feel upmarket merchandise before reaching for their credit card, but in reality just 10 percent of affluent consumers said they prefer researching in-store as opposed to online. Furthermore, 62 percent said they are comfortable using online services to buy stuff, while just 33 percent said they felt comfortable buying in person at a brick and mortar store.
However, rich people don’t shy away from mass marketed products, either. The survey found that 73 percent of them made purchases on Amazon in the past year, which means Amazon is the top service for rich folk and proles alike.
Google is planning to revamp its Google Wallet digital payments platform at Google I/O. However, it seems plans for a physical credit card have been shelved, at least for the time being.
According to AllThingsD, Google informed its staff that the card was ditched in a memo circulated after Google Wallet head Osama Bedier announced he is leaving the company.
However, although the card is history, Wallet is about to get a small revamp. Google will announce a number of changes at I/O, including an update to its rewards programme, more offers and loyalty points, along with the addition of more merchants.
Without a physical card though, Google Wallet will still rely solely on NFC technology, which hasn’t taken off yet. It was hoped that a proper card could push Google Wallet to the next level, but now it seems Google is rethinking its approach. Google doesn’t want to become a bank, or the next Visa. It wants to coexist with existing players and tap their vast infrastructure.
On the gossipy side, sources told AllThingsD’s Liz Gannes that Google CEO Larry Page pulled the plug on the card launch after he witnessed a glitchy demo last week. Apparently Page had long been sceptical of a physical card and the buggy demo was the last straw.
Payment gateway Authorize.Net is now available for British and European merchants, dealing in GBP, EUR and USD. Authorize.Net is a small business solution from CyberSource, a Visa company. It is a popular payment platform designed to accept and manage card transactions, fight fraud and automate recurring transactions.
Simon Stokes, managing director EMEA at CyberSource, said the platform is now able to cater to merchants of all sizes throughout the UK, ranging from home-based start-ups to the biggest enterprise merchants. He was quick to point out that Authorize.Net is the most popular payment gateway in the US. Currently more than 380,000 merchants use Authorize.Net stateside.
“We believe UK merchants will benefit greatly from Authorize.Net’s stability, ease of use, and award winning support,” said Stokes.
In addition to bank card processing, Authorize.Net also provides merchants with a virtual terminal and a website payments seal. It also supports recurring billing, a suit of fraud detection filters and secure data storage. CyberSource also likes to point out that Authorize.Net’s customer support has received quality awards for four years running, so timely support shouldn’t be an issue.
According to research from OC&C Strategy Consultants and Google, British retailers could see their overseas online sales soar to £28 billion by the end of the decade.
Researchers concluded that growth in online sales will outpace domestic growth and eventually account for 40 percent of total online sales by 2020.
British retailers are already doing quite well abroad. In fact, international consumers spent £7.4 billion on British online retail sites last year, making up about 14 percent of total online sales. This year British retailers are expected to net £10 billion from cross-border sales.
OC&C Strategy Consultants and Google found that growth will come from multiple regions, with western Europea leading the way. Sales in western Europe are expected to hit £9.8 billion by 2020, up from £1.5 billion last year. Central and Eastern Europe will see plenty of growth as well, with sales reaching £6.9 billion by the end of the decade, up from £400 million last year.
Sales in Asia are expected to hit £4.5 billion by 2020, while North America will lose its position as the top market for British online retailers. The North American market is currently estimated at £800 million and it is set to expand to £2.7 billion in 2020. The American market is simply more mature than the rest of the world, which translates into slower growth.
“We have seen a significant increase in the volume of searches for British retailers and brands coming from overseas,” Peter Fitzgerald, director at Google, said. “The majority of non-UK searches are currently coming from Europe, followed by North America and Asia, driven by the increased popularity of British brands abroad. Retailers can use search data to identify pockets of demand and move quickly to meet the needs of customers.”
Anita Balchandani, partner at OC&C, said e-commerce has already transformed the retail game, which was once anchored in local markets.
“There are a number of reasons why growth in e-commerce is changing the rules of internationalisation. Firstly, geographical proximity no longer determines which market is best suited for expansion – the internet allows customers seek out the best offers from around the world,” she said. “Secondly, the nature of risk has changed. International expansion is much less capital intensive and this is creating growth opportunities which have a more controlled exposure to risk. Thirdly, the speed with which companies expand has also accelerated – over 40 of Britain’s top-100 etailers serve customers in more than 40 countries.”
Small and medium businesses are hiring dedicated e-commerce specialists in ever growing numbers.
According to a report from Freelancer.co.uk, SMBs are realizing that they need to offer safe and convenient online services, on par with the big boys. The number of businesses hiring e-commerce experts has gone up 19 percent in the first quarter of 2013.
Freelancer spokesman Matt Barrie stressed that the high street is already facing major problems due to the e-commerce boom. He warned that plenty of major retailers have already seen their businesses disintegrate because they lacked a good online presence. Smaller outfits seem to have learned their lesson, so they are investing in e-commerce in the hope of not becoming the next Jessops or HMV.
Barrie believes that even the biggest high street players could see their businesses go down the drain if they fail to embrace online shopping. It could be good news for smaller companies, as e-commerce could level the playing field and allow them to compete with bigger outfits, without much overhead. The web allows small companies to offer their goods and services to a much larger audience, so it could be used to their advantage.
Another aspect of the e-commerce revolution involves niche markets. Although they are diluted across the country, geography simply isn’t a limiting factor in e-commerce, which means that even tiny companies can cater to the entire niche market.
“Retail outlets are proving incapable of adjusting to a consumer base no longer geographically captive. E-commerce is dominating the consumer retail landscape,” said Barrie. “It’s no surprise that big name retailers that haven’t kept up with the online shopping revolution are increasingly going bankrupt. These high street dinosaurs are unwilling to compete, and so will soon be consigned to retail history.”
Big retail chains have all but monopolized the high street in recent years, but it seems e-commerce has the potential to reverse the trend and put independent retailers back on the map.
According to the latest BRC figures, total retail search volumes grew 16 percent in the first quarter of 2013 compared to a year ago. However, search volumes on mobile devices are skyrocketing. Growth on smartphone devices is estimated at 66 percent, while the volume of searches coming from tablets grew by a staggering 198 percent.
The numbers should come as no surprise, as the high street had a rather miserable quarter and quite a few consumers chose to do their shopping online. The horrible weather also had a lot to do with it.
Helen Dickinson, Director General, British Retail Consortium, said the figures confirm tablets and smartphones are becoming increasingly integral to the shopping experience for many consumers.
“It’s easier than ever to compare prices and products online, and retailers are continuing to invest in their websites and their ‘omnichannel’ offer so that customers have choice, convenience and flexibility when they shop,” said Dickinson. “The retail search data also closely mirrors the sales performance across different categories in March. It’s clear that the prolonged cold snap held many of us back from both browsing and buying new-season clothing lines until some sunshine arrived.”
Google Retail Director Peter Fitzgerald described the results as a “strong start to the year,” pointing out that retail queries grew by 16 percent year-on-year.
“This growth continues to be fuelled by the multi-device trend we are experiencing. Tablet queries grew nearly three times compared to the same period last year, whilst mobile traffic grew at 66 per cent,” he said.
Fitzgerald said the positive trend is set to continue into 2013, as more and more users embrace multiple smart devices. He also added that British brands did relatively well overseas, with searches up 16 percent across the globe and 75 percent in America.
Marks & Spencer has launched a small pilot program to test its new mobile payments service. The M&S Digital Lab app was launched in February and Marks & Spencer says it will help it explore emerging technologies and understand how they might work.
However, the new mobile payments service is not actually a part of the m-commerce app. It is merely an element of Marks & Spencer’s overall marketing and technology campaign, reports QR Press Codes. Marks & Spencer is using a third-party app to try out its new service.
The Paddle app was developed by a London based startup and it is supposed to be leaner and easier to use than competing solutions. The app sorts out transactions by scanning QR codes and developers claim it is very secure.
The information is transmitted in the cloud, the credit card information and delivery address need to be submitted only once. Only the last four digits of the card must be submitted to validate the purchase, which should speed up transactions and improve security.
Mobile commerce is slowly but surely going mainstream and a recent report from BI Intelligence found that m-commerce spending will skyrocket over the next couple of years.
The mobile boom is changing shopping habits, and fast. Consumers are using their shiny new smartphones and tablets to redeem coupons, research products, compare prices and, of course, pay for stuff both online and offline.
The trend has not gone unnoticed by major outfits and it is easy to see why, there are plenty of opportunities for just about every consumer oriented industry. The BI Intelligence report found that 29 per cent of US mobile users have already made purchases on their smartphones. Mobile sales accounted for 6.6 per cent of Cyber Monday e-commerce sales in 2011, up from just 3.9 per cent in 2010.
Bank of America now estimates that US and European shoppers will spend $67.1 billion using their smartphones and tablets.
Aside from huge revenue opportunities, mobile commerce has a few other things going for it as well. It is believed that mobile payments can create a more direct link between brands and consumers, with more coupons and loyalty reward programmes.
BI also concluded that the nature of mobile commerce makes it uniquely attractive to marketers, with technologies such as location targeting and in-store mobile marketing.
A survey carried out by Stibo Systems has revealed that the number of m-commerce purchases has increased by 19 per cent over the last year.
The study found that the number of purchases made over e-commerce increased from 40 per cent to 59 per cent in 12 months. However, the survey also established that 17 percent of consumers aren’t too keen on m-commerce channels when they can’t find the necessary information using their tablet or mobile.
Finding product info using a smartphone should be relatively straightforward, but 48 per cent of respondents said small screens make it very hard to read information once it has been found. In other words, m-commerce outfits should start using bigger fonts. Another 46 per cent said they are still concerned about security, reports QRcodepress.
SEO Positive exec Ben Austin said the ever evolving smartphone and tablet market is making mobile purchases much easier than before. The added level of convenience has managed to attract more consumers, but more work needs to be done.
“This research also highlights the need for the information on mobile sites to be clear and secure,” he said.
The industry needs to do more to address security concerns, which are overblown as it is, and they apparently need to redesign their mobile shopping sites to improve readability on small screens. The latter part sounds easy enough, but strengthening confidence in mobile security might prove a bit more challenging.