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
Technological advances, including the arrival of smartphones to the masses, are forever altering the way that consumers browse and buy all types of products and services. Generations of what the world once knew about commerce are no longer relevant.
Below are three predictions for how these digital shifts will continue to rewrite the commerce playbook in 2016:
As the world’s social media base passes the 2.0 billion user milestone, platforms are becoming more confident in monetizing their reach. Increasingly, commerce is being inserted into the normal course of the conversation. Although this convergence of social and payments first gained traction in Asia Pacific, it is quickly being duplicated all around the world.
Fans have numerous ways to engage with their favorite brands, but most opt to remain passive. Simply liking a brand’s Facebook feed requires minimal commitment or effort. This may explain why respondents were nearly twice more likely to have this type of interaction as compared with any other, according to Euromonitor Internationals’ Hyperconnectivity Survey. By contrast, the majority of consumers were hesitant to engage with brands when the interaction involved spreading information to their wider social media circles.
Source: Euromonitor International
In addition to the potential marketing benefits, social commerce has long been touted as a lucrative sales channel. Consumers are slowly migrating purchase to this new channel with 25% of survey respondents reporting they had purchased an item through a social media website. This figure will likely rise in 2016 as recent efforts from Western social players like Facebook, Twitter and Pinterest push their buy-now buttons as an avenue for social-driven commerce.
Apple’s entry into mobile payments in late 2014 was a much-needed catalyst that put the spotlight on the future of commerce. Apple’s announcement was followed by similar ones from its fellow tech titans and along the way ushered in the in Era of Pay.
All three of the mobile wallets have the potential to one day build a global mobile payments network. There are similarities among the mobile wallets offered by the tech titan trio — namely all rely heavily on partnerships with existing financial institutions and leverage NFC to execute tap-and-go payments. Nevertheless, each have unique value propositions that the three hope will help to differentiate their products as they jockey for position in this fast-moving, ever-competitive space.
The stakes are high for whatever platform is the first to get mobile right. Mobile payments eclipsed more than US$670 billion in 2015 across the 46 markets researched by Euromonitor International. Most impressively, mobile payments are expected to expand nearly four-fold over the coming five years, to exceed nearly US$2 trillion in payments conducted through tablets and mobile phones.
While remote mobile payments are more popular, in-person mobile payments are truly the Holy Grail because of what the mobile wallet can do in terms of digitising the path-to-purchase. There has been plenty of hype portraying proximity payments as the next big thing in commerce, but to date there have been few success stories. One of the most well-known ones comes from the US-based coffeehouse giant Starbucks Corp, which in five years has shifted 20% of its US sales to its mobile app.
When asked about the reasons for not having used in-store mobile payments, respondents in Euromonitor International’s Hyperconnectivity Survey expressed a concern over the security of this new payment method. A close second was the notion that established payment methods were convenient, and not too far behind that sentiment was the feeling that mobile payments provided no clear benefits to end-consumers. The reality is that many mobile payment providers to date have not given consumers a compelling reason to adopt.
Source: Euromonitor International
Ultimately, mobile payments must be as cheap, secure and easy to use as traditional payment methods to even be considered a viable option. All that being said, consumer uptake will be directly related to the value add received from using mobile phones in lieu of the leather wallet. This will likely be driven by one-on-one customer engagement of tomorrow’s future loyalty initiatives. This has not yet come to fruition in the current mobile wallet iterations, but mobile payment providers are expected to begin to more fully integrate this type of experience. The first step, which will come in 2016, will be the integration of offers and rewards into mobile wallets akin to Apple Pay’s relationship with Passbook. However, the era of personalization where mobile wallet providers are able to leverage location-based technology to send the right message to the right time to the right person will remain elusive for at least a few more years.
Join Digital Consumer Manager Michelle Evans at the upcoming Money 20/20 Europe event in Copenhagen in April. Use the code “EURN200” to receive a €200 discount when registering. https://www.money2020europe.com