M-commerce: Online retail goes mobile
This shift among shoppers to mobile means retailers are having to adapt much of what they do to remain relevant to their requirements. Many things are changing - screen sizes, attention spans, contexts and situations in which they can access retail sites - so getting this right represents a challenge and one that retailers need to be able to overcome if they are to succeed in such a highly competitive market.
What have been the main trends for e-commerce over the past 12 months?Ultimately, the market is doing well. This year it has grown
a lot more than we thought it would. There are a couple of reasons for that,
one of them is that it's a general trend, people are doing more stuff online,
there is this movement of stuff that we used to do in the physical world moving
into digital. That's no different for retail, of course. It has been
happening for a while. Footfall on UK high streets over Christmas was the
lowest since 1998. Black Friday in 2014 seems to have been a kind of watershed.
There were fights over TVs. This seems to have influenced people's behaviour
and for Black Friday 2015 shoppers really moved online. It was happening anyway
and that trend seems to have got a bit of a push from Black Friday in 2015.
Are smart devices powering this trend?We have seen over the last year to 18 months, a massive
growth on smartphones. It really jumped up and stayed at a high rate for a long
time. There are multiple reasons behind that. There is the fact mobile phones
now have bigger screens. People are using smartphones for everything and
are getting more comfortable using them. The conversion rates are going up on
them. The result of that is that people are able to shop in a greater number of
situations. With the roll out of tablets,
they allowed you to relax on the sofa and browse while watching the television.
Now you can do it on the way to work, on your commute.
On Christmas Day, the smartphone was the big device because
people out visiting their auntie, for example, could use their phone and shop.
Why are smartphone sales increasing and tablet sales decreasing?We are seeing a cannibalisation of tablet sales. They have
really dropped off and went into negative territory towards the end of the
year. When people would have previously used a tablet in front of the TV, they
will now just use their phone.
Smartphones are used for everything now. You use it to hail
a taxi or do your banking. You name it, and there is an app for it. Retail is naturally
part of that trend.
How will the Internet of Things increase online commerce revenues?People are happy to use the Internet of Things (IoT) as long
as it is useful. One thing that seems to be really taking off is the Amazon
Echo with its Alexa digital assistant. That has sold quite heavily and has
potential to streamline parts of the online shopping process. Its voice
activated so you can order things just by asking for them, in principle at
least - it might take a while for people to get used to doing that.
How are payment technologies helping in online commerce?There is a great emphasis on frictionless retail right now.
What retailers are trying to do is prevent people from getting annoyed with the
purchase process and halting the transaction. Now there are payment
methods where you can tap to pay and you can do that through your smartphone.
Where something is useful that's where you will see the growth.
But the issue with payment technology is people have got to
be happy using it; that is always the problem. One technology that has been successful
is contactless payment, which is a slight surprise because if you lose your
contactless payment card and someone finds it they can use it. However, people
have become comfortable using it and it has been responsible for an increasing
share of sales.
Apple Pay is another system that has caught on well, with a
loyal base of people who trust it and are happy to use their phones to pay for
goods and services. With these advanced methods however, they can be popular
among a certain demographic who are keen to use new tech, but they tend to have
a job gaining traction on a truly wide scale.
Why is there a shift towards next-day rather than economy delivery in e-commerce?Number one is that it is getting pushed a lot on retail
websites. Quite often the website will say free next day delivery if you spend
over a particular threshold, say £80.
Customers weren't banging on the door screaming for this,
but what is happening is the web is speeding up everything. People aren't
necessarily asking for it. If businesses can carry out operations faster, then
they will because they see it as having an advantage over the competition. That
forces everyone else to catch up.
What are the likely future trends that will shape online commerce?There is a move towards AI systems with people talking to
Amazon Alexa and bots. The useful thing about a chatbot is that it records
everything that ever happens.
A human service employee won't write down everything the
customer says and won't go back and say "Hey, I've put this chart
together of everyone I've spoken to and here are the keywords they
are using," whereas a chatbot will. Chatbots are ready to work 24/7, and don't
get moody or hungover. There are a lot of advantages to having them.
The big unknown is how people are responding to that. I
don't know how people would feel speaking to a robot all the time. 2017 is the
period when you will start to see these concepts start to become a bit more
accessible and we can get an early idea of people's reactions to them