Why Mobile Commerce is eating the retail world
Marc Andreessen’s “Why software is eating the world” never gets old. The article was published six years ago in WSJ. With recent advances and fast training of deep learning models, software continues to eat the world.
BTW, who comes up with these fantastic titles?
Electronic Commerce
Books.com was the first company to sell physical items over the internet in 1994, a year before @JeffBezos launched amazon.com in 1995.
The books.com domain is now owned by Barnes and Noble. As a historical reference, books.com initially began as a bulletin board service few years before it’s internet reincarnation.
E-Commerce is eating the commerce world. In the last 22 years e-commerce has risen to almost 9% of the total retail of $1.28 Trillion. E-commerce (a $115+ Billion market i.e. 9% of $1,280B) includes mobile commerce, i.e. purchases made over mobile devices.
Mobile Commerce is eating the e-commerce world. Mobile Commerce accounted for 36% (a $41 Billion market) of e-commerce in 2016, but mobile e-commerce is growing twice as fast as non-mobile e-commerce.
Chatbots for e-commerce is still a tiny market but has immense potential once the technology and user expectations are aligned. I’ll write about it separately and link it here.
Why Mobile Commerce is eating the retail commerce world
Mobile Commerce is quickly becoming the new norm to buy and sell products. As brands around the world integrate improved systems to allow the online sale and purchase of items, mobile eCommerce is emerging as a favorite for consumers around the world.
With a wave of new mobile apps to securely process payments in a matter of seconds, at least, one of three of all E-commerce transactions is now completed over a mobile app.
Apple, Samsung, and Google are fueling this exponential increase in Mobile Commerce by developing new mobile payment solutions for a market that is expected to touch $800 billion in the next three years.
Retailers aren’t investing in mobile apps and compatible payment services for nothing — Analytics firm Custora recently reported that Mobile Commerce accounted for over a third of total online shopping on Black Friday 2015 and Mobile Commerce outgrew eCommerce for holiday sales, year over year. Amazon saw a tremendous mobile shopping surge and said nearly 70% of its customers in 2015 holiday used a mobile device to shop.
Top 10 ingredients of a winning Mobile Commerce App
Here are top 10 ingredients of a winning mobile commerce app. I will write separately about recommendations engines, advances in collaborative filtering and personalization in a separate blog post. The following are mostly about mobile apps as a frontend particularly.
1. User Interface
As mobile commerce is heating up, so is the competition. It’s important for app publishers to provide an intuitive and friendly user interface. If a user encounters confusing layouts and has a frustrating experience, they will move on to another app quickly. There is practically no switching cost.
2. User Experiences
Surveys of customers have shown that end user experience matters a lot. Keep the app simple and ensure its compatibility across multiple operating systems and versions. This, however, does not mean skimping on security — that is the top concern for most users when it comes to mobile commerce. The end goal, of course, is ensuring users are actively moving through the app to complete a purchase. App publisters should be able to identify design issues and technical bugs that keep users from successfully making a purchase.
3. Right time experiences to maximize conversions
Just like eCommerce websites, mobile commerce apps are all about providing mobile users the experience that drives growth. Your app is an extension of your brand, and to effectively compete with thousands of other mobile commerce apps, you need to develop, grow and monetize your users by delivering the right experience at the right time. Any valuable insight begins with collecting the right data and acting on it.
4. Discovery
Discovery encompasses how users discover content and items in your app. Track Inbound deep links and landing pages, Items Searched, Categories Browsed, Recommendations Browsed, Previous Orders Browsed, etc. to understand what works and what needs improvement.
5. Curated Lists
Created by users of your app, curated lists can be shared with others so people can buy similar items. Track creation and browsing of curated lists. Also understand adding or removing items to or from a curated list, sharing curated lists socially or via email, SMS or messages, publishing lists on the internet.
6. Wish Lists
Similarly, wish lists can be used for tracking personal preferences. The necessary actions to track for wish lists include creating, browsing, adding or removing items, and sharing wish lists.
7. Shopping Cart
Consumers expect standard functionality from shopping carts and user actions are critical to track to understand your user’s buying behavior.
Adding Items: Track actions, including attributes, like adding and removing items. Allow adding items from multiple sources like ads, special offers, wish lists, curated lists, previous orders, search results, deep/app/universal links, and subscription lists. The source should be tracked to determine what is working for your app.
Removing Items: Standard operations like removing items, viewing and sharing carts, are data points that can provide valuable insights. Tracking the details of a particular item that shoppers are interested in before buying allows for providing individualized experiences in the future through personalized recommendations.
Items: Track items offered for sale, including attributes like viewing item details and price, reviewing item reviews, reading or writing reviews.
Checkout: Track the checkout process. It’s not done till the shopper checks out! Track checkout start, completion, abandonment, and failure.
Shipping, Billing, and Payment: Just like it’s important to monitor Checkout, it’s just as important to monitor user drop off during entry of shipping information, billing information, or payment information. Track start and end points, abandonments and failures, for shipping, billing and payment processes.
Revenue & Payment options: Tracking Revenue sources and payment instruments are critical to Revenue intelligence. Track of the number of purchases a user makes and how people are paying for their purchases, i.e. credit cards, stored credit cards, Apple Pay, Google Pay, Samsung Pay, etc. If a user has a payment method that is about to expire in the next month, it’s helpful to alert them requesting them to update.
8. Messaging, Support, Advocacy, and Feedback
It is a good idea to offer live chat or messaging directly from your app so you can provide support and chat directly with your app’s users. App developers should track Initiation and success of live chat, call back requests and support requests. Tracking various types of requests help you add frequently asked questions as features.
I’ll write about chatbots and personalization at a later date.
9. Beacons
Beacons are becoming increasingly prevalent for tracking the movement of shoppers within a brick and mortar store and sit at the intersection of offline and online retail. Once a shopper’s device connects with a beacon, merchants have a deeper understanding of the merchandise types that are of interest to the shopper based on store and region. They can now send relevant notifications (like ads and special offers) to the mobile phone while the shopper is in the store or leverage partnerships to retarget the user later. Track with each action like entering and exiting a region and making a transaction in a region.
10. Chameleon experience
Shoppers don’t think about online or in-store shopping; they are just shopping, and they want reliable information at their fingertips before making any purchase decision. Marketers and customers have an advantage when the shoppers use Mobile Commerce Apps in-store or online. A mobile commerce app must be able to detect the environment where it’s being accessed (using proximity sensing technologies like Beacons, or location-aware technologies like GPS, indoor GPS or Wifi triangulation) and offer users appropriate in-store or online context-aware experiences.
An app can provide different experiences when used within or outside a store. The Apple and Zara E-Commerce apps are great examples of this Chameleon experience.
Offering the right content-aware experience should not be limited to location-based technologies as shown above. For example, if a person reorders previously purchased items, make it simple for her to browse past orders or subscribe from the list.
Mobile Commerce
It goes without saying that mobile commerce continue to present a golden opportunity to invest, grow, and develop a new channel to reach a large set of users that gets larger by the day. As Mobile Commerce apps become more prevalent, users are demanding a standardized set of functionalities that all e-commerce apps have to deliver. Once a publisher implements these features, tracking user behavior trends and patterns are critical to optimizing the mobile app for maximizing conversion and revenue.
