Smartphones are now driving more traffic to stores than desktops, yet mobile phones are but one of many omni-endpoints that a merchant must be prepared to support in an increasingly tech-driven, consumer-centric shopping experience. July’s Omnicommerce Tracker dives into this topic with PayPal and uncovers some of the overlooked but underutilized ways merchants can prepare to respond.
Omnicommerce has come to mean different things to different people over the years. At its core, it’s about using new technology and mobile devices to rethink how merchants and consumers should interact.
One of omnicommerce’s “go-to” combinations is buy online, pick up (or return) in store — something that sounds simple but is amazingly complex if a retailer’s store systems are siloed. And most big retailers are — understandably — since online commerce is a two-decade-old baby bolted onto an established physical store that’s decades its senior.
As a result, omnicommerce is a concept that PayPal Senior Director Chris Morse says has had its fair share of peaks and valleys, as merchants realize just how hard it is to do well.
It’s a challenge that we document regularly and have for the last 18 months. The OmniReadi Index, powered by Vantiv, measures how well merchants are delivering a consistent experience between their online, in-store and mobile channels. We see that omnireadiness is, on average, not increasing, despite earnest attempts and investments to create a different outcome.
Morse says that one of the complexities merchants struggle with is the sheer number of endpoints they need to consider. Omni isn’t just about online, in-store and in-app but the ability to support new channels that may develop in the future. When the commercial internet was born, few saw its potential as a commerce channel. Ten years ago, no one thought mobile would become the transformative channel that it is today.
Recent data shows that mobile device screens are more important and influential than ever. A new study from Demandware reveals that smartphones now account for 45.1 percent of shopping traffic online, slightly surpassing desktop computers at 45 percent.
It may not be a huge margin, but it points to a shift that’s expected to keep growing.
“I think we’ve seen and learned quite a bit. Mobile is becoming this great opportunity for consumers because they are more comfortable with it and they are also more comfortable transacting in it,” Morse says.
The research also expects smartphones to account for roughly 60 percent of eCommerce visits by the end of 2017.
Though this presents a great opportunity for merchants to reach consumers on the devices they typically keep within reach 24/7, it’s clear that there’s still room to grow when it comes to tapping into the power of a mobile platform.
“If they can get it right on mobile today and tomorrow, that’s where they’re going to see a lot of value going forward,” Rick Kenney, head of consumer insights at Demandware and author of the study, explained to Bloomberg.
It may not be long before online shopping evolves into a “mobile-only” space. Demandware’s research predicts that online order placements on mobile devices may surpass computers by as much as 13 percent in just a couple of years.
Looking ahead, no one really knows what new channels could be coming down the pipeline.
And now, software platforms, such as Uber and Airbnb, are creating entirely new experiences and environments for commerce, which can almost be seen as new “endpoints” as well.
From the merchant perspective, Morse said, the key is to remain agnostic and open, since consumer choice dominates.
It’s simple — loyalty rules. And merchants want help integrating loyalty, rewards and offers for their customers.
Morse recalls a mantra that captures the concept best: One loyal customer is more valuable than eight regular customers.
And it’s not necessarily always about driving more sales in every instance. In many cases, merchants are just trying to figure out how to create a truly great user experience.
They want to know what a customer is buying or how often they’re coming back, because that’s the kind of information that can help them deliver a better shopping experience, Morse says.
In order to gain better insight into this type of data — and take the mobile shopping experience into their own hands — some merchants are relying on the proposition of in-house mobile apps to meet consumers anytime and anyplace.
Target’s Cartwheel app was described as “one of the best” mobile approaches to retail by a senior analyst at Bloomberg Intelligence due to its ability to keep shopping simple yet convenient. The app, which has seen an 85 percent increase in adoption, delivers discounts directly to shoppers while they’re in a Target store, Bloomberg reported.
Merchants must decide how to provide more value to their customers every day — whether it’s with order-ahead, discounts or just improving the overall purchasing experience.
At the end of the day, Morse says it’s never just one consideration.
The most important factors for consumers continue to be convenience and certainty. It will be interesting to see who’s able to deliver a solution that gets these right.
“When we think of omni, we automatically always go to mobile and online, but that’s only part of a great omnichannel experience,” Morse points out. He adds that, no matter which transaction or channel a consumer chooses, they want to feel comfortable knowing that it’s fast and trustworthy.
Consumers are extremely demanding. It’s a fact, and it’s also something that merchants understand.
Just a few years ago, having a quick in-store checkout at the point of sale wasn’t something consumers were really concerned about. But enter EMV chip cards, which are known for their long “dip” time, and now, everyone is looking to shave as many seconds as possible off of checkout time.
The expectations for speed, convenience and efficiency are high and are likely to increase over time.
PayPal’s One Touch digital checkout, which enables a user base of roughly 22 million consumers to pay without user IDs or passwords, eliminates the need for consumers to type in payment information at checkout.
The ability to help consumers navigate through an online or mobile checkout faster can ultimately make it a more gratifying experience, Morse explains.
“The payment just starts to disappear,” he adds. “Nobody likes to pay for things; they like to get things. That’s what we’re talking about here when we talk omni. It has to be like that in all environments.”
But it simply can’t happen overnight.
Merchants must learn how to crawl before they can run. This means having some of the omni basics or table stakes under their belts first and foremost.
Morse explains that merchants must not only understand what their consumers really want but also do their best to be customer champions that deliver on those desires.
Omnichannel offerings, like free shipping, frictionless returns (to any channel) or the ability to buy online and pick up in-store, are attributes that consumers have come to expect.
These are the types of offerings that merchants can benefit from placing into their omnichannel journey and refining as they learn from their customers’ experiences.
“When you think about the world from that perspective, it’s pretty powerful,” he adds. “It’s the blending of the online and the in-store world. We are looking to do the same thing from a payments perspective. It’s not just a seamless experience online; it can also happen in the store.”
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The Vantiv Omnicommerce TrackerTM, powered by PYMNTS.com, features industry-spanning research and insights that arm retailers with data to make smarter decisions for enabling omnichannel commerce.
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