The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Back in 2007, Apple set off a smartphone revolution when it introduced the iPhone to market. While some industry observers back then doubted the potential of the iPhone to impact the mobile industry — let alone payments — it has nevertheless jumpstarted a smartphone revolution. Of course, other mobile phone manufacturers have since followed suit to make the smartphone one of the most popular consumer devices on the planet today.
This plethora of such devices has set into motion generational shifts in a number of industries, including payments, retailing, foodservice and travel. The increased availability of smartphones has ushered in new ways of conducting commerce and executing payments. In addition, these technological advances have ushered in a new consumer type — a connected one. Despite all the hype surrounding the potential of in-person or proximity mobile payments, remote mobile commerce accounted for 98% of mobile payments made globally in the 46 markets researched by Euromonitor International.
At the recent Mobile Research Summit in New York City hosted by Mobile Commerce Daily, I highlighted some of the most important trends shaping mobile commerce. This one-day event provided attendees with an immersion into market research and analysis focused on dissecting the marketers’ approach to such consumer shifts and the evolution of consumer needs related to mobile usage.
Below is a list of three trends most impacting the remote side of mobile commerce:
As the capabilities on mobile devices continue to expand, more and more consumers are turning to both smartphones and tablets when researching shopping decisions and the eventual purchase decision. In fact, tablet-driven mobile commerce is signaling the first foray into purchasing goods and services from a mobile device, especially among more developed market consumers.
Tablet devices have previously been dubbed “couch devices” because consumers often reach for them and may in turn make a purchase while lounging on their couch. Tablet-driven m-commerce purchases are a prominent trend in the world’s most developed markets, which tend to have much higher tablet-penetration rates. On a per capita basis, tablet-driven mobile commerce spend was greater in markets like the UK, the US and Australia in 2014, according to the latest data from Euromonitor International. In contrast, spend was negligible in markets like Vietnam and India where tablets are almost nonexistent.
Source: Euromonitor International
As the path to purchase becomes increasingly more digitized, the act of executing the payment transaction has increasingly shifted further and further into the background. Unlike never before, the payment transaction has increasingly become just a period at the end of the sentence. While there are many factors pushing payments into the background, the ascension of the smartphone to its status as one of the most popular consumer devices on the planet has been a major driving force behind its disappearing act.
Given the challenge of consumers being able to easily enter payment details on small devices, many companies are attempting to eliminate the friction through the use of one-click functionality. Digital wallets, such as MasterCard’s MasterPass or Visa’s Visa Checkout, store a consumer’s payment information in order to reduce the steps to purchase. Another factor driving the invisible payments trends are mobile-specific apps, such as Uber and Airbnb, which have found immense success by cutting down on the number of steps between browsing and buying. In the case of Uber, the mobile app enables on-the-go consumers to request and pay for a cab ride with a single click of a smartphone.
Increasingly, social media networks, including the likes of WeChat, Line and Twitter, have entered the commerce arena. This convergence of social media and payments first gained traction in Asia Pacific, but is quickly being duplicated all around the world. In time, social-driven commerce could provide the foundation for the next wave of remote mobile commerce.
Consumers have numerous ways to engage with their favourite companies and brands, but most opt to remain passive. Simply following or liking a brand’s Facebook or Twitter feed requires minimal commitment and effort. This may explain why respondents were twice as likely to have had this type of interaction with a brand over any other, according to a recent consumer survey conducted by Euromonitor International. By contrast, a majority of consumers are hesitant to engage with brands when the interaction involves spreading the information to their wider social media circle. In fact, fewer than 30% of global respondents have shared or retweeted a company’s social media post while roughly 20% of global survey respondents have shared a photo of a company-tagged product or shared a purchase they made on social media.
Source: Euromonitor International consumer survey, Hyperconnectivity Survey 2014
Besides, the vast marketing benefits associated with social media, there is the potential for social networks to become a lucrative sales channel as well. Numerous social media networks are have introduced social commerce initiatives and consumers are responding by slowly migrating purchase decisions to this new channel. In fact, one-quarter of global survey respondents reported having purchased an item through this new channel, which is significantly higher than the 8% who have reported using social media platforms for peer-to-peer payment transfers. Undoubtedly, the potential exists for social commerce help drive the broader mobile commerce ecosystem moving forward.