Smartphones and tablets have not just changed the way we shop online, they are also having an impact in brick-and-mortar shops, as many shoppers are using them to compare prices and read product reviews. But shoppers aren’t the only ones doing a bit of intelligence work on the ground, the retailers are responding in kind.
More and more retailers, or click-and-mortar outfits are gathering data from smartphone users in stores, reports AFP. They are simply using the smartphones to check what the shoppers are up to, where they are moving and what they are looking for. The practice is not going down well with privacy groups, but shops seem to like what they are getting and there are even a number of start-ups specialising in the field.
Of course, the data shops can collect is rather limited, but it is nonetheless useful. They can track users visits and their identities, learn how frequently the shoppers return, see what they are looking for in the shops and so on. The data allows them to better understand customer behaviour and to come up with ways of getting more return business and making better offers to potential customers.
Although privacy concerns are rather fashionable these days, thanks to America’s attempts to beat East Germany in spying on its own citizens, most of the data collected by the shops seems relatively harmless, as it doesn’t include any truly personal data, such as phone numbers, emails or credit card info. In fact, anyone who swipes a credit card in the shop is likely to be providing the shop with more valuable information.
It sounds like a benign and relatively harmless practice, but if it catches on it will undoubtedly draw more scrutiny. Not because it is dangerous or unethical, but because talking about privacy and data security is a pretty good way of getting on the telly and getting some free publicity.
It appears that Facebook is finally starting to make sense for marketers. For years Facebook users complained about every single redesign and the inclusion of more ads, especially intrusive ones that appear in newsfeeds.
However, it appears that they are working. The Drum reports that 12 percent of Facebook users in Britain have already made a purchase after seeing a product in their newsfeed. So for all the talk of hating Facebook ads, the same people who are complaining seem to be falling for the ads.
What’s more, Faceboom EMEA veep Nicola Mendelsohn said mums spend three times as much time on Facebook during the holiday season and they account for the vast majority of Christmas gift purchases.
Facebook has recently announced the launch of a new SMB content hub that should help small businesses promote goods and services on the social network.
Tablets and smartphones are quickly becoming the platform of choice when it comes to online shopping. According to IMRG Capgemini, mobile accounted for 23.2 percent of online sales last quarter, up 11.6 percent year-on-year. What’s more, the actual proportion of retail site visits coming from mobile was up to 34 percent from 21 percent a year ago.
Click and collect is going strong as well, as it represented 16 percent of online sales, up from 12 percent last year. Bounce rates are also going up, largely as a result of higher mobile penetration.
IMRG chief information officer Tina Spooner said there is a correlation between the surge in mobile commerce and the rise in visitor bounce rates on mobile retail sites.
“While consumers [people, Ed.] have generally become more confident in using their mobile devices as a shopping tool, the latest data suggests they have also become more demanding,” Spooner said. “Higher search volumes will inevitably result in an increase in bounce rates as shoppers will often compare products and pricing across several brands.”
Spooner argued that offering an engaging and relevant experience for customers across all channels will help retailers achieve the end goal of higher conversion rates and an increase in customer loyalty.
Capgemini UK VP of consumer products and retail Chris Webster pointed out another interesting trend – record levels of sales via mobile devices correspond to higher rates for click and collect.
“This correlation of mobile ordering and location flexible collection is at the heart of the mobile internet and the impact it will have on consumer behaviour. Maybe we are truly entering the Martini age – anytime, anyplace, anywhere,” he said. Talk about product placement, Webster.
A report fresh out of Nielsen found that shoppers behave quite differently when they’re doing their shopping on tablets rather than smartphones. Tablets are a lot more likely to be used for product browsing and tablet users write more product reviews.
Two thirds of smartphone shoppers use their devices mostly at home, while the same goes for four fifths of tablet users. More often than not, they watch TV while their playing with their smart devices. Tablet owners are more active with product research (59 percent) and are more likely to purchase physical items (38 percent) than smartphone shoppers (24 percent).
However, smartphone shoppers make up for it by being more active outside the home. On the other hand, Nielsen found that quite a few mobile shoppers are on the sofa while they’re shopping. This is true of 95 percent of tablet users and 72 percent of smartphone users, who make their purchases from home. Tablet users are more likely to make a purchase overall.
In a brick-and-mortar setting, smartphones reign supreme. As many as 70 percent of smartphone shoppers use a store locator to plan their shopping trip, while 37 percent arrive with organised shopping lists stored on their phones. The majority of smartphone and tablet shoppers use their devices to check prices before pulling the trigger. More smartphone users do this in physical stores. Smartphones also lead the way when it comes to mobile coupons and mobile payments.
Even when their shopping spree is done, many shoppers turn to their tablets to write product reviews or write comments about their purchases on social media. The majority of smartphone and tablet shoppers also use their devices to track the progress of their online orders.
British people are falling in love with e-commerce and a new eMarketer report claims their enthusiasm for buying things they don’t need and can’t afford with money they don’t have will drive UK business-to-consumer e-commerce sales up to £62.49 billion this year.
It gets better – by 2017 the figure may hit £89.73 billion, or 16 percent of total UK retail sales. However, the figures include digital travel sales. The volume of retail e-commerce sales this year may be £44.06 billion and they will represent 70.5 percent of B2C e-commerce sales in 2013. The share is expected to rise to 72.5 percent by 2017.
Although the average UK buyer often ranks as the top spending e-commerce consumer worldwide, non-UK people are starting to play a notable role in B2C sales. IMRG speculates that online retail sales made by non-UK people will total £10 billion this year, up from £7.4 billion in 2012.
Mobile e-commerce is also showing signs of growth. Sales from mobile phones and tablets are expected to increase 71.8 percent year-on-year to £6.6 billion, that’s 15 percent of total UK e-commerce sales. In 2017 they will hit £17.2 billion. Possibly.
Most online shoppers are after clothes, sports goods, household goods, travel arrangements, accommodation, tickets, music, films, newspapers and books. British fashion outlets are doing particularly well, unlike their counterparts in the rest of the world. Many people are still reluctant when it comes to buying clothes online, but fashion shops in the UK are offering free shipping and generous return policies.
Onlineretailers are on a roll, but many of their sites aren’t performing well due to some rather basic technical limitations.
According to a recent report from NCC Group, the top 50 online retail sites in Britain exhibited poor website performance last quarter and much of the problems were caused by ancient internet connections.
The end result was that fancy sites with plenty of flash content offered a less than stellar shopping experience, as they were simply too slow. NCC Group tested the sites and found that the average download speed was 6.7 seconds on a 2Mbps connection. The average speed in Q1 was 6.27 seconds, but research has shown that load times over 3 seconds tend to drive customers away.
It seems that online retailers are sparing no expense when they develop their sites, so they end up with elaborate and relatively “heavy” websites that take too long to load. Average internet connection speeds aren’t keeping up with the trend.
Worse, the top 50 retail sites averaged a downtime of 4 hours and 17 minutes, which is also up from last quarter’s 3 hours and 23 minutes. It seems that feature packed sites are not only slow, they tend to be less reliable as well.
“It’s a worrying trajectory and one that retailers need to address quickly. If a website is slow to load, consumers will simply go elsewhere, while any downtime will lead to a direct loss of sales,” Bob Dowson, director of NCC Group’s website performance division said. “The potential within the online retail space is massive. In 2012 the value of online retail to the UK was ￡78bn*, and that’s only going to grow. Retailers that prioritise their website performance will put themselves in a great position to fulfil their potential in the market.”
The financial performance of the UK e-tail market has been largely positive in Q2 2013, with shoppers spending 18.3 percent more in June compared to 2012. However, this report indicates that it could have been a more successful quarter if retailers had prioritised consumer experience through web performance.
Physical retail outlets and e-commerce operations are starting to converge and consumers are starting to treat all channels as shopping, which it essentially is. Although high streets are suffering, e-commerce is becoming a force to be reckoned with, but e-commerce and brick-and-mortar retail are not mutually exclusive.
Google reckons that retail channels are converging, as traditional retailers are starting to make inroads in e-commerce. Physical shops are undergoing a transformation, they are becoming more focused on brand building than actual retail and they are becoming catalysts for related e-commerce services.
In a recent whitepaper Google VP of ads and commerce Sridhar Ramaswamy concluded that consumers no longer see a distinction between online and offline shopping. The experience is becoming seamless and intertwined.
“Whether it’s searching on a laptop, browsing main street shops, or hanging out at the mall — it’s all shopping,” he wrote.
Since shoppers seem to be growing blind to the distinction between e-commerce and traditional shopping, they might end up with similar expectations for customer service regardless of the channel, reports Practicalecommerce.com. In other words, they might expect the same level of service online as they do in actual stores. Salespersons keep physical retail going by offering consumer advice and more information than sterile e-commerce sites, while the online channel is unbeatable for comparing prices and saving money.
“Today’s shoppers have become accustomed to doing their own research to get the maximum value out of every dollar they spend, and to feel secure about the purchases they’re making;” Ramaswamy wrote. “With this power shift comes a great opportunity for retailers; those that use tools and insights from the web have the opportunity to close the gap between the smart online consumer and the offline retailer, and stand out in a competitive marketplace.”
Searching for products and comparing prices online is easy, provided one knows what to look for, and this is where salespersons need to be involved, with expert advice. Getting a better deal on a product doesn’t really matter if that particular product does not meet the customers actual needs and properly informing and advising consumers online is just as important as having as competent salesperson in a brick-and-mortar shop.
The online retail market in the UK is still going strong and according to IMRG Capgemini’s latest figures it is growing at the fastest rate in two years. IMRG Capgemini’s e-Retail Sales Index found that June sales rose 20 percent year-on-year. Furthermore monthly sales in June were better than in May for the first time in five years.
IMRG CIO Tina Spooner said the market has beaten expectations this year, with 16 percent growth in the first half of the year, beating the outfit’s earlier forecast of 12 percent. Mobile transactions are also doing well, up 136 percent year-on-year in June.
“Mobile commerce continues to power on in 2013. More specifically, the mobile conversion rate has increased from 1.27% in June 2012 to 2.03% in June 2013 which is a very positive signal that mobile commerce is achieving serious traction in the UK market,” said Oliver Ripley, mobile product manager at eCommera.
Ripley pointed out that modern retailers are investing more in mobile commerce storefronts, both through browsers and bespoke apps. The shopping experience is getting better for mobile users, with improved payment services and user interface improvements.
Ripley also noted that consumers are becoming more used to mobile transactions and this is especially true of younger consumers.
Chris Webster, VP, Head of Retail Consulting and Technology at Capgemini said the uplift experienced this month will provide retailers with a note of cheer.
“With the Index recording its biggest year-on-year growth since June 2011 and Q2 being 17% up on Q2 2012. This is in stark contrast to the continued decline in store footfall reported by the BRC over the first half of the year and amplifies the increase of online at the expense of store sales,” he said. “In addition, Britons remain price-conscious, but have responded well to good deals found online and it’s good to see consumer confidence returning.”
For months now we’ve been reading very optimistic reports on the future of mobile payments and m-commerce, but one outfit is apparently looking beyond the hype. Research firm eMarketer has slashed its growth estimate for proximity mobile payments in half.
Last October eMarketer forecasted that mobile payments would hit $2.13 billion this year, but in its latest note it puts the figure at $1 billion. Although the number of mobile transactions has more than tripled over the past two years, growth is apparently slowing down, plagued by a multitude of issues.
The firm pointed out that delays and adoption issues are hampering growth. The fact that there are already several competing platforms isn’t helping, either. However, it is still looking good in the long run. By 2016 mobile transactions should hit 2016, roughly a year behind the previous eMarketer schedule. Just a year later, in 2017, mobile payments should hit $58 billion.
Aside from the usual hardware teething problems, mobile payment outfits need to address security concerns and streamline the process itself. At the moment, the user experience still involves too much friction, according to PayPal CTO James Barrese. The ultimate goal is to come up with a one-touch payment scheme that would be a lot simpler and quicker than the good old card swipe. That probably won’t come about soon, and maintaining a level of security deemed acceptable by consumers might be very challenging.
In addition, the fact that there are several players vying for their slice of the pie, using their own systems and infrastructure, means that there is plenty of room for consolidation, reckons Venture Beat. However, big players aren’t very open to consolidation, or even cooperation, hence it is very unlikely that a single platform can break out of the pack and transform itself into an industry standard.
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.
Starbucks has started accepting contactless payments in more than 550 stores in the UK. Barclaycard Global Payment Acceptance and Visa Europe are behind the tap-to-pay system, which seems to be gaining traction.
Starbucks says that cash payments are losing popularity fast, as only one out of three transactions are made in cash nowadays.
The system should make card transactions even faster, cutting queue times. Starbucks said the rollout of contactless follows other innovations implemented in the past, including a bespoke mobile payment app.
“Contactless payments are changing the way we pay in the UK. Transaction numbers are growing rapidly and with more than one in four UK Visa cards now contactless we’re expecting usage to quadruple again by the end of 2013,” said Mark Austin, Vice President at Visa Europe. “We’re delighted that Starbucks is joining the growing number of retailers who now offer contactless payments to their customers.”
There are currently over 27 million Visa contactless cards issued in the UK and contactless payments are accepted at more than 250,000 terminals in the UK, including on London Buses, which have seen more than 2 million transactions since launching contactless payments in December 2012.
Starbucks is behind the times and doesn’t pay much corporation tax. 711s and Family Marts in old Taipei have been piloting a combined NFC card for metro and other transactions for years.
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.