Why UK mobile commerce is in a monetisation stone age
Commerce has driven human evolution for thousands of years with monetary exchange and payment at the heart of it. Nothing has fundamentally changed the world of business over the past 20 years more than digital technology. And yet, it’s still payments that are holding back digital commerce.
Approximately four trillion dollars worth of merchandise will be abandoned in online shopping carts this year. That’s $4 trillion dollars worth of goods from UK retailers that could have been purchased from domestic consumers or exported somewhere. It doesn’t matter what you sell, these numbers are both terrifying and send a signal loud and clear to any business that needs to effectively sell online to survive. What’s even crazier is that we still accept that these sales are lost at point of conversion because that’s how it’s always been!
The figures speak for themselves. Of 100 online shoppers that click ‘go to checkout’, only 33 actually finalise their purchase. Imagine those same 100 consumers enter Waterstones or Topshop and 67 of those people walk up to the checkout, dump their items on the counter and then leave the store – it would drive the store managers crazy. So why don’t we see the same reaction among online business managers?
But, it doesn’t stop there, on the mobile those stats drop even further. Recent studies suggest that upward of 50 percent of traffic to retailers’ websites is now coming via smartphone and tablet devices. But at the same time, mobile conversion rates are far less impressive – only three percent of mobile purchases are completed. So is it possible to replicate the desktop conversion rates for mobile devices and drive future revenue?
Mobile shopping can become as simple as mobile browsing. Critical to mobile commerce success is reducing the friction consumers experience during the purchase process and making the mobile sales funnel more efficient. By reducing the amount of steps to purchase completion and simplifying the registration process (or preferably eliminating it altogether), retailers can boost mobile conversion rates by up to 60 percent.
With the immense opportunity for online businesses, can they really afford to have an out-of-date digital commerce model and turn opportunity away?
Remove barriers, unlock potential
When it comes to online shopping, consumers focus more on the buying rather than the paying. We want that espresso machine, we easily move it to our shopping cart and paying is just our means to an end. Businesses must consider removing the barriers to getting the product into the customers’ hands. We know it sounds too good to be true, but taking simple steps, such as removing the need for customer registration and passwords, businesses will increase conversion rates by up to 80 percent. Buying online should be a simple click experience.
Keep evolving to keep selling
Etail is evolving at a rapid speed and those who can’t keep up risk losing out to competitors. Businesses selling online need to be prepared to constantly evolve their online and digital presence. For example, ask yourself if your site can maximise the opportunity brought about by the increased amount of shopping done via mobile and tablets. And then there’s the constantly shifting sands in the payments landscape - are you prepared for the next payments revolution that’s happening with Apple Pay and BitCoin?
The world of commerce will continue to grow and challenge the largest and smallest of businesses. Overall, we as an industry have been slow to react to the changes driven by consumer behaviour and technological developments. Now is the time to pull us out of the monetisation stone age. With some simple adjustments to the way we ask people to buy and pay online and on the mobile we can bring monetisation into the future.
Top four adjustments to retailers digital strategies:
- Multiple source traffic is important – Don’t just rely on Google to deliver visitors to your site. Develop a strategy to acquire traffic from other sources.
- Think global - Consumers shop more cross border and service providers are making it simpler to sell globally.
- Focus on what you do best, leave the rest to others – Evaluate your business and decide what your core business is and what needs to be done, everything else can be outsourced.
- Put the user’s mobile behaviour at the core of your strategy - User data is making it much easier to cater exactly what your users need - but don't forget to talk to your users directly. Pick up the phone from time to time.
Erik Engellau-Nilsson is chief consumer business officer at Klarna.