You can’t (afford to) ignore the mobile retail revolution, says Klarna co-founder

nilkasKlarna

Online shopping has become a convenient everyday habit and, with easy access to smartphones and tablets, consumers can now shop online anywhere, at any time.

The increasing preference for digital shopping over the traditional in-store experience means we are spending £9.7 billion a year through mobile payments. By 2024, this number will grow to more than £50 billion.

While retailers continue to work on providing a multi-channel shopping experience, the consumer is increasingly focussing all their attention – and credit cards, towards the mobile device. So it is surprising to hear that a recent Barclays-sponsored survey found that 70 per cent of retailers did not currently offer mobile websites or mobile applications for consumers.

The reality is that underinvestment in mobile shopping can be detrimental to a retailer’s livelihood. If done well, mobile shopping can achieve conversion rates of up to 70 per cent. The mobile shopping revolution is knocking at the doors of retailers – it is critical that they welcome it in. At a time when margins are squeezed and there is intense competition from both high street giants and pure-play etailers, can retailers afford to be blasé about a growing market channel?

 

The ‘always-on’ environment driving mobile commerce

We are a population of connected consumers. If we leave our mobile devices at home or in the office we feel incomplete. These devices have become much more than just phones. They are pocket-sized transactional tools used for email, texting, social sharing, shopping and countless other tasks.

At the same time, we live in an ‘Uberised’ environment where the radical convenience of mobility has made consumers more demanding than ever before. These two factors have led to a significant shift in the way consumers shop – moving from using mobile interactions primarily for ‘window-shopping’ and price comparison to completing transactions on the move. New mobile payments solutions that allow for one-click purchases on mobile devices, as we have seen from Apple Pay, Android Pay, PayPal and Klarna, will further promote the growth of mobile commerce and drive consumer spending behaviour.

 

Listen to your customer to increase conversion

Customers want a seamless shopping experience, no matter where or how they shop. They want to find an item, put it in a ‘basket’, pay for it and walk away.

Whether it’s in-store, online or on mobile, 56 per cent of consumers believe their online purchasing experience would improve if retailers delivered a consistent service across all platforms. Therefore, from research to purchase, the process should be simple and straightforward across all channels, including mobile.

For this to be achieved, retailers need to understand consumers’ needs and adjust channels to be as consumer friendly as possible.

Businesses selling online need to be prepared to constantly evolve their digital presence.

Retailers need to ask themselves if their site can maximise the opportunity brought about by the increase in mobile traffic. And then there are the constantly shifting sands of the payments landscape – are they prepared for the next revolutions in payment technology, from contactless to cardless to cryptocurrency?

By taking this approach, merchants can boost conversion rates and increase revenue.

 

Making mobile commerce work

Mobile sales are growing three times as fast as its desktop equivalent. Historically, however, mobile commerce has suffered from low completion rates. This is mainly due to the friction of the mobile shopping experience: there are too many steps to completion, and performing tasks like entering credit card numbers or passwords is far more annoying and time-consuming on a phone’s small virtual keyboard. This friction means only three in every 100 sales begun on a mobile device are completed. However, there are ways to improve these conversion rates significantly.

Merchants must make mobile payment as simple as mobile browsing – delivering convenience and removing barriers to getting the product into the customers’ hands, without sacrificing security. By reducing the number of steps to purchase completion and simplifying the registration process (or, better yet, eliminating it altogether), retailers can boost mobile conversion rates by up to 60 per cent.

 

Top four tips for online merchants

  1. 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.
  2. Think global – Consumers shop across borders, and service providers are making it simpler to sell globally.
  3. Focus on what you do best, leave the rest to others – Evaluate your business and decide what your core business is, then focus on that. Everything else can be outsourced.
  4. Put the user’s mobile behaviour at the core of your strategy – User data is making it much easier to cater exactly to what your users need – but don’t just use that to filter their shopping options. Provide useful information – sales or new stock, for example – through appropriate channels to encourage engagement.

The world of commerce is continually changing and challenges the largest and smallest of businesses. Just as eCommerce disrupted bricks-and-mortar retail, mobile-centric approaches are disrupting established retail models. Retailers who are not adjusting their digital strategies to accommodate the growing number of consumers shopping on smartphones and tablets are potentially missing out on additional revenue, and risk falling behind their competitors.

Niklas Adalberth is the co-founder of Klarna

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