Forget E-Commerce, the future is M-Commerce!
The shift to mobile is not something that will happen in the future, it is something that began years ago and is increasing in importance year on year. However, this change in consumers digital demands should be embraced as an opportunity rather than a threat to traditional commerce.
Gone are the days when people flocked to bank branches, eager to sign up for lifelong bank accounts, loans and mortgages. Gone too are the times when local brick-and-mortar shops dominated markets. Today, organisations are being challenged by agile startups, rapidly changing customer expectations and new regulatory frameworks that encourage innovation and competition.
To engage with a new generation of tech-savvy consumers organisations have to diversify their offering by providing digital channels including web, mobile web, and Apps. This is no longer a nice-to-have but a necessity. Those that failed to fully embrace the E-commerce era born some two decades ago, now have the opportunity not to make the same mistake again.
E-commerce — A digital strategy, fact or fiction?
The first warning signs that the dominant position of banks, retailers and other organisations was under threat appeared during the dot-com birth and boom of the 1990’s. This decade was marked by the huge excitement around digital business and E-commerce, which created a huge demand for this brand new and very exciting commercial channel that would need a sophisticated and secure manner in which to process credit and debit card payments. Of course, the bubble eventually burst in the early 2000’s forcing opportunistic newcomers out of business. However, when the dust settled and the hype was over, the key message prevailed: organisations’ commercial strategies must account for a digital online business. The resultant learning was that E-commerce was here to stay, making digital-first strategies a mandatory prerequisite for growth and success.
Many retailers underestimated the impact of E-commerce and digital business, therefore choosing to jump on the trend after it had peaked. This produced radical shifts within the industry, culminating in the retail apocalypse which forced well-known brands such as Toys R Us, Sears and Claire’s to close locations or even file for bankruptcy. But retailers weren’t the only ones to underestimate the impact of digital business: banks too met this initial frenzy with general scepticism. Cynical sentiments from the financial world such as “People are never going to feel comfortable putting their credit number in a computer, are you mad?” weren’t out of the ordinary. As a result, banks also failed to jump aboard this digital revolution and have been forced to play catch up ever since.
The shift to mobile is a trend that must not be ignored
The good news for organisations that didn’t embrace the online and E-commerce trend (and haven’t gone out of business) is that now a new trend has emerged — the shift to mobile-centric behaviour and M-commerce. Today, everything is moving to mobile. Consumers are increasingly spending the majority of their time on smartphones. In 2019, there will be over 2,5 billion smartphone users. Over 50% of searches are made through smartphones already and this number is expected to increase to 70% by 2020. Google recognised this trend long ago and switched to a mobile-first indexing strategy for its algorithms. Consumers’ obsession with mobile phones has reached such a level that cities are even starting to project traffic lights on the pavement, given the amount of time smartphone users spend looking down at their phones, and not at traffic.
As users turn to smartphones as their device of choice, companies that provide great mobile-UX are performing best. One-click payments, mobile-first design and smooth UX are increasingly becoming the decisive factors for business success for the new generation of tech-hungry and savvy consumers. This is a generation of users that have grown up in the E-commerce era and do not have the historical fears of digital commerce as their parents may have had, therefore demanding more methods of digital payment methods, such as Apple Pay, Google Pay, Samsung Pay. As with traditional E-commerce, the payment checkout on mobile is equally as important as the overall customer journey through the shopping cart.
In the age of advanced API technology, it is no longer acceptable for the consumer to be re-directed out of a mobile app to a third party payment page in order to enter card details and complete the order. Furthermore, requesting card details on each and every order is no longer acceptable to the consumer. Secure storage of card details and tokenisation is something that was developed during the E-commerce era and in the mobile channel is even more relevant. The payment journey needs to be simple, secure and with as few touch points as possible. Anything less than this will result in a failure to meet consumer demands and high cart abandonment rates.
For the merchant, the shift to mobile and digital commerce in general provides challenges not only in meeting new consumer demands but also how this can improve backend processes to ultimately deliver a more joined up commercial and operational strategy. The nature of electronic data and advance API technology means that organisations are now able to feed data in real-time into back-office CRM, Financial and Order Management software. All of which improve the customer interaction with the organisation from point of sale to the fulfilment of orders.
Therefore, it is no surprise that technology-driven providers of commerce services have recognised the shift to mobile and more importantly have understood the behavioural shift of consumers to mobile. These organisations are using creativity, innovation and speed to develop new solutions faster that offer consumers a mobile experience that not only delights them and encourages loyalty and repeat business, but is actually what they crave and want.
Within the Fintech space, traditional banking brands are facing a huge challenge by competitors who have realised the shift to mobile and have made this the central pillar of their offering. With a mobile app-centric approach, brands such as Revolut and Monzo are enjoying hyper-growth and month on month are relieving traditional banking brands of their consumer base. Payment providers who do not service this mobile-centric consumer base with native SDK technology will eventually lose out to more tech-savvy providers and, in the future, we will put them in the same category as those organisations who failed to realise the change from traditional to digital commerce.
Surprised by the speed of innovation, a lot of large institutions have been caught off guard by the mobile trend, and are already behind the pace of innovation. These traditional organisations run on legacy systems, silo mentalities and rigid structures, which means they face challenges when trying to compete against their new fast and innovative counterparts.
What have we learned?
Organisations need to engage with the digital revolution of the moment. The next iteration is already underway: mobile. If you missed out on E-commerce, don’t miss out on the mobile shift. Now’s the time to make sure you can position yourself at the forefront of the mobile in-app payment space. Companies that understand this point, see an opportunity for improvement, and fully embrace the entire payment aspect as an integral part of their overall digital strategy will end up as winners. Sleeping on this progression as many have done in the past will pose a threat to your business, putting it at risk of descending into irrelevance.
