InternetRetailing’s Mobile Editor Paul Skeldon shares his thoughts on what’s ahead for mobile in 2018.
Taking a look at what lies ahead in mobile retailing is always a tricky business. I make no bones that most years I get it right, but always miss something that comes out of left field that none of us saw coming. At least I never predicted great things for the Apple Watch. But that was 2017: what does 2018 have in store? What is interesting is that looking at 2018 shows developments being more around themes than actual technologies. Black Friday and the cyber shopping frenzy has shown us unequivocally that mobile is becoming the dominant channel in retailing, playing a role in the whole purchase journey (even in store) and becoming the place where most sales now take place. Yes, many people still convert online and in store, but mobile is starting to get the edge. What all this has shown us is that, rather than retail becoming mobile, shoppers are becoming channel agnostic: grabbing whatever shopping platform there is to hand to buy things, which brings is to our first key trend…
This is probably the biggest trend in retail for 2018: shoppers are finally truly omnichannel, being agnostic to where they are and what they are doing and just buying on the platform that suits them at that time.
This is good news for high street retailers as they still want to go into shops. According to new research from Vista Retail Support, 81% of UK consumers see the physical store as vital to the shopping experience and 70% say they enjoy the full experience of going into stores to browse, see what’s new and buy what they like. But 30% are “showroomers” using retail stores to try goods out before they buy online. What shoppers like is the mix of the human touch and technology, it would appear, which is what makes them uber-omnichannel shoppers. According to research in the ‘In Full Flight Embrace The Pace: Are You Running With Customers Or Letting Them Race Away From You’ Report, which polled 2,000 UK consumers, customer service and human interaction prove key motivations for consumers choosing to shop in-store – but mobile technology is needed to support it.
The study by PCMS, a global provider of unified commerce solutions, revealed that talking to a real person and touching the goods were main drivers for going into stores. However, 51% agreed that having staff armed with tablets in the store would improve the customer experience – whether it’s to look up products, demonstrate the item or make recommendations based on previous purchases. Furthermore, many shoppers are happy to look at goods in stores then buy them on mobile if they aren’t in stock.
There must be something in it – even pureplay online retailers are starting to look at the benefits of adding the ‘lost platform’ of the store to their cannon. New research from Colliers International shows that by 2021, the rate of growth in ecommerce sales is expected to decline from the current level of around 11% to 7%. In anticipation of this, online retailers are increasingly using physical stores to bolster their sales and their brands. The new trend is being labelled ‘showrooming’ as the primary intention of these stores is not necessarily to generate sales through the tills but to reinforce customer loyalty – and spending – online.
Closely allied to this move that combines all platforms in how they shop, consumers are starting to choose retailers based not on price so much anymore, but on service. This is one of the reasons why people still go in to stores: they see them as the place to go to get the human touch and good service.
According to the PCMS research, 84% of shoppers agreed that quick and helpful customer service was the most likely factor in making them shop with a retailer again, followed by quick check out and payment options (44%). A further 44% would be more likely to choose a retailer that offers a quick and convenient customer service over retailers they had been loyal to in the past, but couldn’t offer the same levels of service. And it seems, increasingly, shoppers want retailers to use mobile technology to empower store associates, with 51% agreeing that having staff armed with tablets in the store would improve the customer experience – whether it’s to look up products, demonstrate the item or make recommendations based on previous purchases.
Online, customer service is also becoming a vital differentiator. Being mobile centric, offering alternative payment options such as the ability to pay later and enabling one-click repeat purchase are all key to winning over online Christmas shoppers. New research by payments provider Klarna, suggests that allowing customers to ‘try before they pay’ could assuage fears around unwanted gifts. This could help tempt people into taking a gamble on a gift as it removes the worry consumers may have about needing to return multiple items, as shoppers only pay once they’re happy with their purchase. This is but one of a range of payments trends we are likely to see in 2018.
Whole deferred payment is a contentious issue – and one that may become necessary as retailers spend 2018 trying new ways to entice shoppers to buy – there are other moves afoot in payments that are also going to impact shopping. We have touched on one-click repeat purchasing, which will start to become more common, but we are also going to see the rise in mobile payments online and in-store. Biometrics such as fingerprint recognition and Apple’s face recognition are starting to make mobile feel a whole lot more of a protected and personalised way to pay than perhaps even cards and cash.
That is certainly the ‘vibe’ from the kids – a survey by MoneySuperMarket reveals that a quarter (23%) of Generation Z predicts physical cards will soon be obsolete as mobile payments reign supreme. Nearly a quarter (23%) of these whippersnappers also predict that we will eventually pay for everything with our phones, rendering physical cards obsolete, as opposed to just 6% of the over 55s. It may not be too farfetched. In China, almost everyone pays for everything using their phone, to such as extent that payments processor Adyen has added Chinese mobile payment app WeChatPay functionality to its PoS systems worldwide – so that 400 million middle class Chinese tourists can buy your goods in a way that suits them. Whatever you may think, mobile payments is coming. Another twist to the payments idea is that the Payment Services Directive 2 (PSD2) – a piece of European legislation about electronic payments – comes into force across Europe in January 2018. One of the things this allows is for the payment for quasi-real goods to be paid for by adding the charge to the customer’s phone bill.
While this won’t have a direct impact on many retailers right away, it does change how people do things: and that is always important to watch when looking at trends and predictions. What PSD2 will usher in is the ability to easily and with two clicks pay for carparking, or to buy tickets using the phone and have those tickets delivered to the phone. Linked to things like carparking or road tolls, it makes the process of location, payment and ticketing a seamless mobile process. And it achieves that great ‘Uberisation’ moment of making the payment part of the process sort of invisible.
This is important, not for 2018, but for 2020 and beyond, when shoppers are so used to the ultra-convenience of this method of payment that they will be looking for retailers to come up with ways of redesigning the whole online, mobile and in-store shopping experience to ape the easy way they pay for parking. Nothing to fret about in 2018, but one to watch the birth of this year.
"It won’t just be technology and clever marketing that drives change. The customers themselves are driving change: either through changing economic or political circumstances, or simply by finding ways to use tech that retailers aren’t on to yet"
AR, VR AND MR
Of course, there are also going to be technology-based trends working into how all of the things we have talked about above come to fruition. And chief among these is augmented, virtual and mixed reality tools. In essence, these are ways of using mobile platforms to either overlay content on the real world, create a digital version of the real world that you and your customers can manipulate, or a mixture of both and the real world, to create better ways to interact with goods and services, to try before you buy and get a sense of how things are without having to see them. Obviously, these can be a boon to online-only retailers as it lets users remotely try before they buy, but as AR and VR become more prevalent, the technology is also starting to become expected in all kinds of retail environments. It makes good business sense. Businesses and brands that make the best use of new technology are more likely to build a loyal customer base, according to new research.
Augmented reality (AR) leads the way as the technology people most want to engage with, as 50% of UK consumers say they would be more likely to be loyal to a brand that offered them access to this type of visualisation experience either in store or online. AR, which continues to grow in popularity following the release of the iPhone 8 and iPhone X, is proving particularly popular among younger people with 69% of 18-24 year olds saying they would be more loyal to a business offering this technology. This age group would also be more likely to shop with a brand that offered artificial intelligence like chatbots, according to a retail report by Manchester mixed reality business DigitalBridge. However, with 59% of 25-34 year olds, 48% of 35-44 year olds and 46% of 45-54 year olds saying new technology plays a key role in converting them into loyal customers, this potential is not limited to particular age brackets. Being able to preview products in the real world to see what they’d look like and being able to ‘try on’ multiple options before spending money are the main reasons consumers see the future of retail in augmented reality, although virtual reality and artificial intelligence tools like chat bots continue to feed the imagination.
These are just some of the trends we shall see in mobile and retail in 2018, there are of course many others. The need for evermore personal personalisation, better user experience and better engagement will all be key – but I think the things we have looked at are all the likely immediate upshots of those.
On the technology front, things like artificial intelligence (AI) will drive how this all works together, creating the kind of personalisation at scale that users now demand. But it won’t just be technology and clever marketing that drives change. The customers themselves are driving change: either through changing economic or political circumstances, or simply by finding ways to use tech that retailers aren’t on to yet. Either way, it is all about service, across all channels, and letting shoppers decide which channels and what sort of experience they want to have.