Convenience is King

The world is poised for mobile commerce to change the way consumers shop for good, and for many, 2012 has been billed as the year that it finally lives up to its revenue-generating potential. Rising demand from consumers, along with the continuing uptake of smartphone ownership, presents an unprecedented opportunity for innovative merchants to make the most of this new channel.

According to figures from eBay, the UK mobile payments market is expected to be worth £2.5bn by 2016, and worth up to £19bn to the UK economy in 2021. IMRG statistics show that in the second quarter of 2011, visits to eCommerce sites from mobile devices accounted for 7 per cent of overall traffic, up from an average of 1.4 per cent in Q1 2010. Retailer Debenhams recently revealed that 20 per cent of its online traffic was coming from mobile devices. Globally, Juniper Research forecasts that the mobile payments market will quadruple between now and 2017, to reach £829bn. 
According to WorldPay’s Global Online Shopper report, 48 per cent of online shoppers in the UK own a smartphone, while 13 per cent own a tablet, and both groups demonstrate a propensity to buy via these devices. 29 per cent of UK consumers say they are likely to use these devices to buy online in the next year, while the majority of UK shoppers spend up to a quarter of their disposable income online.

Perhaps the most dramatic change aligned to recent mobile successes is that consumers are able to browse using their personal technology any time they want – on the commute home, at the pub, and even while visiting a shop itself. Yet, before merchants rush to implement a mobile channel, they need to be aware of what makes it profitable.

WorldPay research has found that convenience tops consumers’ wish list when it comes to shopping on a mobile device. 39 per cent of those surveyed in the UK were frustrated by the length of the transaction process when buying via their mobile, while 38 per cent were irritated by the amount of information they were required to provide the retailer. A QuBit report also found that UK retailers are estimated to lose £4bn because they provide users with basic eCommerce sites which are not optimised for mobiles.

As such, the challenge merchants need to address is usability. For mCommerce to truly take off, the benefits of buying on a mobile device have to outweigh the associated challenges and risks. Consumer expectations of an mCommerce purchase are high, because they are already used to an advanced level of experience in the eCommerce space.

WorldPay’s Global Online Shopper report also found that 25 per cent prefer a mobile-optimised website, compared to 19 per centwho prefer to shop via bespoke apps. Mobile commerce for consumers is all about convenience, and merchants need to have all their bases covered when it comes to consumer preferences. Merchants need to provide the simplest possible route from consumers choosing to buy a product on mobile, to the transaction being finalised.

Whilst ease of use and user experience will drive mCommerce, security remains an important factor. 43 per cent of UK shoppers don’t intend to shop with a smartphone because of security concerns, according to the Global Online Shopper report, so providing a safe online experience is key.

Merchants need to thoroughly consider the security of their mCommerce solution against overall usability. Merchants are aware that different channels carry different fraud challenges, but they need to understand how to apply the right strategy to the right channel. Traditional industry security methods such as the 3D Secure authentication tools - VerifiedByVisa and MasterCard SecureCode - are very difficult to render on most mobile devices. Risk-screening tools can help bridge the gap, by using environmental factors to screen transactions. Additionally companies such as CellPoint and MoBank can offer solutions to enable authentication tools for mCommerce.

Looking at the global picture, there are plenty of mCommerce opportunities for UK merchants to sell to the rapid-growth economies of India, Brazil and China, presenting merchants with a new generation of enthusiastic mobile shoppers. For example, mobile use in India is vastly higher than the global average, with high levels of smartphone ownership (72 per cent) and the use of mobile for purchases over double the global average at 40 per cent).

We are now at the optimal point at which consumer appetite for mCommerce exists, and the technology exists to make it useable. If merchants can understand and respond to their customers’ demands, they will reap the rewards from the mobile channel.

Phil McGriskin chief product officer at WorldPay