August 13, 2020

7 Trends That Are Transforming the Mobile Shopping Experience

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Mobile commerce, or m-commerce, refers to the online buying and selling of products and services through mobile devices. It involves all aspects of e-commerce with a focus on delivering the best customer experience in a fully optimized and effective mobile environment. In this post, we’ve gathered 7 m-commerce trends we believe are paving the way for a more accessible and tech-friendly shopping experience through the device that’s always on us. 

Asia and Africa: The Two Drivers of Mobile-First Design

It can be observed that there is a geographical component to the current development of a mobile first e-commerce environment. Currently, Asia is experiencing a boost in their economic health, a growing middle-class and wider access to affordable smart phones. In 2017, Google’s e-Conomy SEA Spotlight report shared that over 90% of South Asians use internet on their mobile phones. Globally 34% of us use our phones to compare prices when making a purchase online – in Asia, that figure is 45%.  

Singapore, South Korea, Thailand, Taiwan, China, and Hong Kong have been ranked among the top 10 nations that are contributing to the rise of m-commerce (IAB SEA+India). Hong Kong mobile users are reported to be responsible for 50% of m-commerce purchases between January 2019 and January 2020 (ScandAsia). Experts are advising business in the region to adapt to the growing trend of mobile users and focus on design simplicity, app security and social media marketing, in order to remain relevant and stay competitive.  

In Sub-Saharan Africa, 2 out of every 3 people, or a total of 600 million, are without access to electricity yet those same individuals have access to a mobile phone (WorldBank). The phones used usually have a week-long battery life and apart from calling and SMS, are used for FM radio and flashlights. Payment systems like Kenya’s M-Pesa have emerged, so users can send money to one another through their mobile devices. It is estimated that the Kenyan app processes roughly $20 million daily transactions. As computers are an expensive investment, most Africans prefer to buy a smartphone instead. This trend seems to have resulted in Africa being labeled as a mobile-only region.  

A 2018 PayPal survey reported that 85% of South African online shoppers use their mobile devices for payment transactions and the number is likely to keep growing. Efi Dahan, PayPal’s General Manager of Africa, Middle East, Russia and Turkey commented: 

“46% of consumers also stated that because of the convenience of using their mobile device for online shopping, they tend to make more purchases... eCommerce has the potential to connect consumers to the digital global economy. The data showcases a huge opportunity for South African businesses to reap rewards and grow their businesses if they embrace mobile eCommerce and provide convenience consumers all over the world crave.” 

Online Privacy and Ethics 

The digital transformation towards a mobile centered shopping experience, has really challenged the way consumers view privacy when making a purchase. Following the Cambridge Analytica scandal, an estimated 25% of Facebook users deleted their accounts in 2018. Since then, users have become increasingly aware of tracked clicks, likes and follows as manipulation tactics used by social media giants and consulting firms to push forward political and social campaigns. In addition, since mobile devices are one of the most personal devices we carry, the potential data leaks can prove to be much more damaging and harder to regulate. 

Fortunately, the e-commerce industry has not yet experienced any major scandals, as all reputable merchants handle user data internally and would be of a major legal breach to sell it to third-party advertisers. For example, Amazon’s platform makes sure sellers refrain from mentioning any external site, otherwise it is considered a violation to their terms of service, and results in a suspension or deletion of their account. Since Amazon sellers don’t have access to their customers contact information, they are able to retarget them directly by uploading their customer lists on social media platforms. 

The challenge with online privacy rests with practicing individual responsibility to safeguard our personal information through our actions. It comes as no surprise, that a Deloitte study reported that 91% of Americans automatically agree to the terms of conditions without reading a single line. The percentage is 97% of those aged 18-34. How many times have you downloaded a mobile app without reading all the legal lingo? 

Whether it’s because the language is too complex, or the outlines too lengthy, almost everyone will seem alright with skipping the clauses and blindly provide their names, e-mails and at times even their phone number, for companies to sell to advertisers. At the same time, those same people wonder why their inboxes and timelines are being flooded with annoying spam or why their friends are receiving awkward invitations by SMS and strange phone calls. Let’s agree to accept this scenario as a double standard. It’s not until we take full accountability for our actions and start reading the fine print that we gain control over our online privacy. It’s time we gain the confidence to click “I do not agree” to terms we are not comfortable with accepting. 

“Privacy and data protection have probably never been more salient. Against the backdrop of huge leaks such as the Marriott ones and rising concerns about social media data, legislators and consumer are becoming increasingly wearier. Activist legislation such as the GDPR is already bringing in hundreds on million euro in fines but the situation hardly improves. The solution may well be a new mode of shared responsibility between processors such as e-commerce platforms and consumer that jointly bear the burden of protecting the data economy. A further challenge for e-commerce is that it is usually very close to customers and sets the standards for their experience and protection. Thus, they really need to get it right.” Anton Gerunov, COO, LogSentinel 

Targeted SMS Marketing Campaigns 

According to Pew Research, nearly 90% of all adults own a smartphone and 48.7 million of those will agree to subscribe and opt-in to receive marketing text messages, as reported by City Numbers. With the emergence of SMS marketing, online sellers can use powerful tools such as segmentation to launch promotional campaigns based on customer behavior, location, order history and more.  

These filters are applied selectively based on the specific focus of a campaign and are dynamic in the sense that the segments autofill with new subscribers whenever segmentation rules are met. Scheduled SMS marketing campaigns can be sent automatically to subscribers, and with a single click, a customer can enjoy a 30% discount on an item of their choice from their favorite store. Customers are often greeted with their names and promos are sent in a light and personal tone, according to their purchase trends.  

Starbucks sends six MMS messages per month to their subscribers, along with rewards they can use towards paying for drinks and food in-store. Their messages include GIFS of cats holding Frappucinos, eagles dancing with drinks and humorous messages like “What has a green straw and wishes it had thumbs? This guy. Text the keyword STRAW to 22122. Apart from Starbucks, IKEA, Reebok, and Tommy Hilfiger are some of the big brands which use SMS marketing as a channel to communicate with their customers, offering exclusive deals they can’t resist. 

It goes without saying, that the success of SMS marketing campaigns relies on several factors including GDPR and CTIA compliance, optimal frequency and timing, market knowledge, and the actual content of the message. Despite the efforts involved, with open rates as high as 98% and reported ROI reaching over 1,000%, an increasing number of online businesses are turning to SMS marketing to set themselves apart from the competition. 

“Indeed, multiple reports estimate the chatbot market size to grow substantially in the next 5 years or so. We’re also doing our best to play a role by opening up our platform for businesses to create channels for effective communication with their customers. Nowadays, we’re talking more than 1000 chatbots running on Viber with sufficient number of active users subscribed to them. The most common use cases would cover utility services, fintech, e-commence and entertainment. Our midterm vision includes adding universal payment functionalities, simplifying the UI and improving the bot searchability. Last but not least, our experience has proved it’s of highest importance to have a list of trusted bot developers who are well aware of and can contribute to the available APIs.” Momchil Elenkov, Telecom & B2B Partnerships Director, Viber

Influence of Social Commerce 

Considering that as of 2019, according to stats from Brandwatch, there are 3.725 billion active social media users worldwide, the average user managing 7.6 personal social media accounts, spending roughly 142 minutes daily on them, we can agree that social commerce is an important element of the m-commerce industry. Its aim, of course, is to use powerful social media networks to promote and sell products online.  

What we might see happening soon though, is a liberalization of affiliate marketing. Instead of influencers and companies, more ordinary users will redirect their friends, acquaintances and basically anyone to a product for a share of the profit.  

Absolunet concluded that 87% of people who shop online, believe that social media helps them in the process of choosing the right product for them. That shouldn’t come as a surprise, right? Facebook, Instagram, Pinterest save our likes, interests, group follows, event attendance and use that personal information to help marketers pinpoint their campaign’s target audience. Using Facebook Ads Manager, with as little as $0.97 cost-per-click (CPC), $7.19 cost-per-thousand-impressions (CPM), $1.07 cost-per-like (CPL), or $5.47 cost-per-download (CPA), the average marketer is able to launch creative ad copy that sells their product to the right customer. 

Furthermore, affiliate marketing has started gaining popularity as a profitable way to earn money, by piling up commissions upon successful promotion of a company’s products. Young and ambitious influencers seem to be leading the way in that domain, setting the average cost per acquisition at 10-25% of the final sale price, earning them a salary of over $60,000 per year. The influencer’s goal is not to sell the product directly, but rather, quite strategically, display a lifestyle around it, build a desire to achieve it, and ultimately, sell the experience the product delivers. 

Instagram is an influencer’s playground, as 80% of its 1 billion monthly active users are following businesses they shop from. As eMarketer reports, 73% of U.S. teens say it’s the best way for brands to communicate with them about new products. Two years ago, Instagram stepped up its game releasing Shoppable Posts Ads, a native integration which allows users to add products to their cart with a single click. Similar to tagging friends in photos, the business tags a photo with the items they’re selling and writes a short and witty sales pitch with a CTA below it. The user then gets to make a purchase without having to leave the app. 

Augmented and Virtual Reality  

Apart from the practical uses of AR and VR, the technologies offer gamification and social engineering to further boost the overall shopping experience on mobile. Customers can now not only customize the size and color of a product to suit their shape and taste prior to deciding whether it’s worth buying, but they also become a part of a greater seal of approval – one that depends on the wisdom of friends, celebrity endorsement, and social shares and connections to stay relevant with what is hip and trendy. 

Shofies” are selfies that let Snapchat user try on shoes before buying them, through AR technology. Users can then forward the snap to their best friend asking for their opinion, further promoting the product. In 2018, the multimedia messaging app released Snap Kit, a developer platform that enables businesses to integrate Snapchat’s AR lenses in their own m-commerce applications.  

Meanwhile, IKEA developed IKEA Place, an AR app that helps users visualize how IKEA furniture will look like and fit in their home, providing true-to-scale products and a visual-search function, which when pointed at a piece of furniture, will display IKEA’s closest resembling product.  

Makeup giant Sephora’s Virtual Artist app uses VR and facial recognition to let their customers virtually put on makeup before selecting the right shade for their skin tone. Once their look is complete, they can share it on social media to inspire other beauty mavens to try the product as well. 

Voice Shopping  

Voice shopping, or voice commerce, enables consumers to purchase items by giving voice commands on a smartphone, tablet device or smart speaker. Since 2010 when Apple acquired and introduced Siri as the iPhone’s Personal Assistant, major companies followed suite – Microsoft’s Cortana, Google Assistant, Amazon’s Alexa and Echo, as well as Facebook’s voice assistant which is still in development since early 2018, taking over the previous M, Facebook Messenger digital assistant.  

A recent study by OC&C Strategy Consultants, reports that voice commerce sales will reach $5 billion in UK and $40 billion in the United States by the year 2022. It’s no surprise that many consumers are turning to voice assistant to do their shopping – it’s quicker, requires less effort and allows for targeted product searches. Through Amazon Echo, for example, users can create shopping lists and enable voice purchasing to buy a new music album, or even review grocery store deals, make an order and have the food items delivered straight to their home. 

Time really flies by when evaluating the rising popularity of voice shopping among consumers. A 2018 survey by Ipsos Connect concluded that only 9% of smart speaker owners in the UK use voice assistance for shopping. However, just one year later, research by Artefact UK showed that 60% of smart speaker owners use them to make a purchase, and 28% would even use them to book a trip.  

At the same time, Chinese tech companies like Mobovi, backed by $60 million from Google in 2015, has engineered voice-enabled speakers, watches and mirrors, Baidu has developed the wireless Raven H smart speaker, Alibaba has developed Tmall Genie, and Tenecent is working on a voice assistant for WeChat, China’s multi-purpose mobile app used by 1.2 billion active monthly users. By 2023, Statista estimates that digital voice assistants in use will reach 8 billion worldwide. Let that sink in for a minute, then warm up your vocal cords and prepare for the voice assistant revolution. 

Chatbots 

Chatbots are the next big thing and play a significant role in the future of m-commerce. Not convinced? Let me try to sway you. 1.4 billion people are communicating with chatbots (Acquire), they can cut operational costs by 30% which will lead to 85% of customer interactions being handled by them by 2021 (Chatbots Life), as they can answer about 80% of standard questions (IBM). Their marketability is growing at high-speed, as more companies are using them to provide quick and personalized service to their customers. By 2021, IBM estimates that roughly $5 billion will be invested in chatbots to develop the tool into an even more powerful method of m-commerce communication. 

Chatbots are not only great at providing help when sales agents are offline, but as a powerful sales channel for personalized product recommendations and upsells. For example, a customer might know they’d like to purchase a new pair of sneakers for the autumn, however still now little about the items in stock and what’s to offer. In that case, Nike’s chatbot, Stylebot, will familiarize you with all the different styles, or even let you customize your own sneakers by uploading a photo of a specific model and editing the color themes from the NIKEiD spectrum. Once you are happy with the personalized look, you can go ahead and place your order, all while chatting through Facebook Messenger.  

The cosmetics brand Kiehl’s also uses a chatbot on Facebook Messenger, offering their customers a recommendation engine, a smart search based on product type and different skin issues, and other customer services to help them select the right product. Through brief yet precise questionnaires, customers are guided to the perfect gift, or skincare solution for themselves. Men are invited to explore formulas specifically tailored to their needs and personal preferences. 

Whereas chatbots are currently employed mainly in support and claims, I believe that another trend is the “hidden” chatbot wizard-like options on m-commerce apps. They take into account trends and pattern matching to suggest and guide the shoppers through categories of merchandise. This is made possible by the same infrastructure that makes chatbots. The idea is to forecast the next buy, not show merchandise for searches from last week. In today’s dynamic market, the purchase has already happened most of the times.” Krasimir Kostadinov, Head of Sales Engineering, Scalefocus

The Future of Shopping is Mobile Commerce 

The global expansion of technology to all parts of the world, taking responsibility for our digital privacy, SMS marketing, AR & VR, social commerce, voice shopping and chatbots are taking the lead as trends that are currently shaping m-commerce and are sure to remain relevant in the years beyond.  

Scalefocus believes that these trends are making online shopping a more accessible, effective and exciting experience for consumers, and we are proud to be a part of that innovative technological journey. Reach out to our m-Commerce experts to discuss how we can help your online business grow and reach new milestones with mobile-first solutions and impactful digital services.