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The Smartphonisation of Retail and What It Means for Merchants
The ECC Payment Study Vol. 26 clearly shows that smartphones are playing a more important role in commerce. But how exactly are consumers using their mobile devices? And what does this mean for merchants? This article evaluates the current trends in commerce.
Do you reach for your smartphone when you want to quickly look up a product or service? Or do you use your phone to compare prices in store? You’re not alone. Out of the 2,000 consumers surveyed for the latest ECC Payment Study, eight out of ten stated that they use their smartphone to get information on products and services on the go. Almost two-thirds of those consumers also use their phone to compare products and prices. One-third of consumers use only their smartphone when looking up information before making a purchase. This is hardly surprising: Mobile devices are a quick, practical, and convenient way to get information. As a result, more and more people are using their smartphone to shop – both online and in-store.
For this reason, it’s important for merchants to take a closer look at how consumers use smartphones. Mobile-optimised online shops and smart payment solutions are necessary to improve the customer experience, as the ECC study shows. But which important aspects should merchants pay particular attention to?
Customers Expect a Fully Mobile-Optimised Shopping Experience
Gathering information is just one part of the shopping experience that is increasingly shifting to smartphones. Many customers use their smartphone at every stage of the buying process and make more than half of their online purchases in this way. Mobile online shopping has become mainstream. This is reflected in customer expectations: Mobile-optimised online shops and checkouts are essential if companies want to reduce basket abandonment. As the ECC survey shows, more than a quarter of customers abandon their purchase if the checkout isn’t optimised for mobile use.
Shopping apps are playing an increasingly important role too. These include apps from specific retailers, as well as marketplace apps such as eBay. Even though only relatively few of these apps are used regularly, more than half of all smartphone purchases are made using an app. Consumers make their purchase directly in the shopping app and then pay using one of the payment methods offered in the app.
Mobile optimisation and the growing popularity of shopping apps increase the expectations on merchants to provide the right mix of payment methods. The ECC survey shows a clear conclusion: Merchants should consider more innovative payment methods, such as digital wallets, alongside the conventional options like payment by invoice and credit cards. On the other hand, consumers use separate payment apps, such as Payback, Google Pay, and Apple Pay, less frequently. But there is a growing trend towards these kinds of apps, too.
Merchants should therefore ensure that their online shop and the checkout process are optimised for smartphone use. Ideally, they should think about developing their own shopping apps to further simplify and enhance the customer experience. Fortunately, many merchants have already picked up on these trends.
The Smartphonisation of Ecommerce: Retailers Are Enhancing the Customer Experience
Around three quarters of merchants have already optimised their online shop for mobile devices. 71 percent of the 241 retailers surveyed have a mobile-optimised checkout. The trend towards mobile-optimised customer experiences is continuing. One fifth of the surveyed merchants have not yet optimised their online shop or checkout process for mobile use, but plan to do so in the future. The mobile-first approach has become the norm. Shopping apps are also on the rise. Almost half of the online merchants surveyed offer their customers an app for online purchases. However, retailers still often encounter challenges when implementing smartphone payments.
The majority of merchants offer a different selection of payment methods on their app and on their online shop. But this can also cause frustration amongst customers. Typically, today’s customers expect the same payment methods on all channels. The trend is moving towards unified commerce – the next level after omnichannel commerce. It’s all about merchants being able to offer customers a seamless experience, which also involves harmonising the payment methods on every channel. Customer centricity is the key – and that also applies to the point of sale.
Mobile Payment and Attractive Services at the POS Are Becoming More Relevant
Smartphones are just as important at the POS. More and more frequently, customers are keeping digital bonus cards, vouchers, and customer loyalty programs on their mobile device so that they always have access to them. One in two customers uses their smartphone to manage their discount coupons and bonus cards and have convenient access to them at the checkout. Digital shopping lists and digital receipts are also growing in popularity.
In comparison, smartphone payment at the POS is slightly lagging behind. The percentage of contactless payments made using smartphones did increase three percent from 2021 to 2022. However, at only 18 percent, smartphone payments are still far behind contactless card payments. But this is still indication of a trend: In the longer term, smartphones will play a bigger role in contactless payments at the POS. Indeed, a third of the survey respondents stated that they occasionally make payments using their mobile phone. More than half of the respondents intend to make more mobile payments in the future.
This trend means that brick-and-mortar retailers should ensure that their terminals are able to accept payments from smartphones. In coming years, more and more customers will expect to be able to use their smartphone to pay in store. The mobile phone is starting to replace the wallet.
Next Stop: Unified Commerce
The survey results show that online and offline commerce are increasingly merging. Smartphones are one of the most important interfaces in this development. In the next few years, more and more merchants will move from omnichannel commerce to unified commerce. This means ensuring seamless communication between the company and the customer. To do this, sales channels and customer touchpoints will be unified on a single platform in real time. Customer interactions on all channels can then be centrally managed. The result is that customers can switch between different sales channels smoothly and without hindrance.
In our white paper “Unified Commerce: Optimise the Shopping Experience” you can find detailed insights on unified commerce. In addition to explaining the topic, the white paper provides an outlook on the future of commerce and payment. You can also find helpful tips for implementing a unified commerce strategy.
To optimise the customer experience, it will be key to offer a consistent and mobile-optimised payment process on all channels. Merchants that start this process now will be well placed to become leaders in unified commerce and offer their customers the best shopping experience.
Über die ECC Studie:
The ECC Payment Study Vol. 26 examines the use of smartphones as a shopping and payment tool. It providers merchants with a comprehensive source of information about current developments in payments amongst various target groups. The study’s findings help merchants make strategic decisions about their own payment offerings.
The study is based on a January 2022 survey of 2,000 consumers in Germany. Also in January 2022, 241 German merchants (online, multichannel, and retail) were surveyed. It is the only study on the market that reveals payment insights from both the consumer side and the merchant side.