American Express - Mobile Payments In eCommerce - May 2022 - An in-depth look at mobile payments' critical role in creating unified, seamless eCommerce experiences

For years, eCommerce has been growing, but a rapidly growing piece of that market is mobile commerce (mCommerce), which refers to consumers’ shopping behaviors on their mobile devices.

While many retailers have pivoted their sales platforms to meet this demand, there is still much work to do in their digital transformation to not only attract customers but also convince them to return.

“As consumer shopping behaviors continue to change, you’re seeing a rapid shift where mobile-first isn’t just an option anymore. It’s effectively a core requirement,” Rehman Baig, vice president of product, data and partnerships for Adyen, a global payments platform that offers end-to-end financial services, including mobile payments, told PYMNTS in a recent interview. “Today’s tech-savvy shoppers want more than just a sales pitch,” he said. “They want companies to understand them, allow them to shop on several different devices and, most importantly, they expect checkout and payment experiences to be seamless and frictionless, or they may decide to abandon the purchase or go to a competitor.”

The Path to Unified Commerce

Consumers today shop using various platforms and devices, and retailers must engage them across multiple channels. Traditionally, if a consumer wanted to buy a shirt, they would have to go into a store and try it on. Now, consumers are engaged through mobile via targeted advertising and social media from brands looking to bring attention to the shirts they sell. From there, some consumers may research on their laptops and then visit a brand’s brick-and-mortar location to see if the shirt is the right fit and style for them. Other shoppers may make the purchase right away on mobile. Both are examples of unified commerce. Many consumers now expect that brands provide them with seamless shopping and check-out experiences no matter where they are purchasing.

The problem with this is that a lot can happen from the point of consideration to the point of purchase. Smart retailers give mobile shoppers plenty of opportunities to complete sales along the way before they lose interest or become distracted. That means retailers must make sure their commerce platforms are intuitively using data across multiple devices that can remember consumers’ behaviors. Offering alternative payment options, such as Apple Pay and Google Pay, can increase conversion as well by removing barriers, such as forcing consumers to search for their wallets.

“With digital and mobile, you have access to far more data than you ever had in the past in terms of the consumer and how they’re shopping,” Baig explained. “Being able to make sense of the data and give value back to the consumer is critically important to win their loyalty and encourage repeat business. A key part of the experience is tokenizing their payment credentials. Being able to keep payment details stored and secure while being able to tailor personalization and loyalty is something that every company needs to be thinking about in terms of optimizing the mobile shopping experience.”

The Future of Mobile Commerce

Mobile commerce has grown very quickly, and some projections indicate that mCommerce will take over as the preferred way to shop in less than five years, with sales doubling by 2025. Many retailers have not yet invested in the proper digital infrastructure to take advantage of this growth, however, mainly because the pace of mCommerce growth overtook their ability to invest and implement changes.

“What would normally take a decade, you’ve seen in the span of two years,” Baig said. “Smart companies are recognizing the technical and architectural debt they have and have made active investments to meet the customers’ needs and serve them for the foreseeable future.”

Another challenge is that fragmented legacy systems, such as enterprise resource planning solutions, point-of-sale platforms and eCommerce systems, are not set up to “talk to each other,” making it difficult for retailers to have a clear view of inventory, individual store performance, customer preferences and other information that can individualize shopping experiences and cut down on friction.

In the future, Baig expects to see retailers reduce friction further, unifying purchasing channels for a seamless buying experience. He believes brick-and-mortar stores will entice shoppers to buy by eliminating the need to purchase at a cashier line. Offerings like mobile checkout enable cashiers to walk up to customers and complete sales, elevating the checkout experience and reducing the potential for churn. Technologies such as network tokenization are also helpful, as they allow retailers to save payment information that can be used later, making checkout easier and more secure.

“It lowers the barrier for being able to do pop-ups and for being able to meet people in different parts of the store to close the sale, to get creative in terms of interacting with customers,” he said. “These are the types of things that are going to be indicative of merchants that are able to overcome some of the natural inertia or rigidity that happens in large corporations and be able to capitalize on how consumers’ preferences or behaviors are changing. … Payment is the moment of truth in shopping where everything comes to a head. You can have the brand, the appeal, the inventory and all the great taglines, staff, support and everything along the way, but at the end of the day, payment is when you convert the transaction.”

The future of mobile commerce has already arrived, and retailers will need to change the ways in which they meet their customers quickly if they hope to survive the new normal of unified commerce. The initial investments in technology to do so will be costly but will be worth the long-term customer loyalty in the end.

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