This is the second in a three-part series on the evolution of commerce, contributed by IAB Singapore. Please see “Part 1: Adapt and execute—fast“, and look out for “Part 3: Don’t hate AI and blockchain, they’re there to supercharge analytics” next week.
The modern shopper journey encompasses multiple channels—bricks-and-mortar stores, online and mobile. Consumers expect these channels to communicate seamlessly with one another. In other words, they demand an omnichannel experience—but true omnichannel can be a challenge for many retailers, as it requires consolidated fulfilment, spot-on stock management and integration of in-store and online commerce platforms via CRM. Moreover, in-store and online teams must be aligned at all times. Easier said than done!
There are two unifying forces at the centre of omnichannel: Mobile apps usage and mobile payments.
1. Mobile apps
Mobile apps have become key retail revenue drivers. Across our region, advertisers who have invested in shopping apps are already seeing half of their transactions completed on the channel. Conversion rates on mobile apps are also five times higher than on the mobile web.
But, it is not about spinning up an app, sitting back and expecting success. A mobile app cannot simply be a replica of an e-commerce website. Whether it is storing e-coupons, hosting a loyalty program or facilitating convenience, retailers must give consumers a clear reason to use an app.
A mobile app also bridges physical and digital. Omnichannel data analytics can identify patterns and help determine how to reach shoppers with the most relevant message, which is delivered through the native mobile app—such as the example given above.
If retailers go one step further to integrate point-of-sale or CRM data, a native mobile app can become the channel that alerts a customer when a product they regularly purchase is out of stock at their favoured location. The app then calls out the next closest location to find the product or offers a ‘click to purchase’ function for instant order and delivery. This will no doubt save customers time and encourage repeat purchases.
2. Mobile payments
According to Alfred Kelly, CEO of Visa, “Banks and businesses are realizing the cost of cash. Digital can make for a more convenient consumer experience given nearly every consumer uses a smartphone.”
The transaction value of digital payments in Asia is expected to grow at 16.4% annually to reach US$2.5 trillion in 2022. This amounts to half of the estimated worldwide total and reinforces consumers’ growing desire to transact whenever, wherever. At the fundamental level, mobile payments are delivered using credit card information stored on a virtual wallet and through contactless ‘tap-and-go’ functionality.
Whether customers are purchasing from the comfort of their homes or in-store on mobile devices, they demand frictionless payments. Cart abandonment when shopping on mobile devices is often caused by cumbersome checkout and payment paths. Our region is known to have the highest digital shopping cart abandonment rates—or lost conversions—globally. This makes it crucial that retailers identify and address issues with user experience design around payment.
One of the biggest growth barriers of the Southeast Asian market is the lack of mobile payments, with about 70% of the region’s population still unbanked. But it is also one of its biggest opportunities. The so-called “ecommerce war” between technology giants Alibaba and Tencent across Indonesia, Thailand, Malaysia and Vietnam, is in reality a race towards proprietary payment solutions adoption. It comes as no surprise that integrated platforms such as Go-Jek or Grab are now providing and advertising their own payment options, respectively Go-Pay and GrabPay, in order to create a closed ecosystem for the massive communities that they have gathered.
By centralizing mobile payments and making it a part of the in-store experience, you will gain access to your own data-rich customer insights. This can then be turned into personalised, contextually-relevant offers and services that generate competitive advantages, customer engagement, and ultimately, more sales.
This article was written by IAB Singapore Commerce Committee Co-Chair Alban Villani, GM for Southeast Asia, Hong Kong and Taiwan at Criteo. This article was was originally published on Campaign Asia-Pacific.