Mobile payments have some way to go
Just 1% of shoppers in the UK have used their mobile phone to make a purchase in-store, according to a report from Deloitte, indicating the task mobile payment solution providers have to make this technology mainstream. The research firm estimates that mobile devices will account for just GBP8 billion (USD13 billion) in sales this year, equal to just 3% of the total retail market, with most consumers still opting for traditional forms of payment, such as cash or credit cards. While the figures paint a disappointing picture for the nascent mobile payments market, Deloitte predicts that the number of purchases made directly via mobile phones will increase over the next four years. The uptake will be driven by the on-going rise in smartphone penetration, as well as consumer expectations of being able to make payments on their phones.
“We would expect smartphones to increasingly be used as a transactional device in the future,” says Deloitte Digital’s head of multichannel retail, Colin Jeffrey. “The increased adoption of contactless payment technology will act to accelerate the influence of mobile. Retailers need to plan for a world where banks of till points are no longer required and prepare to fully exploit the opportunities that mobile presents.”
The number of consumers using their mobile phone to influence their shopping decisions is increasing, even though the number of people actually making purchases on their smartphones in-store remains small. The report found that 6% of in-store sales, equivalent to GBP15.2 billion (USD24.7 billion) this year, are affected by smartphones through users researching products and checking prices online while out shopping. This is also expected to rise as smartphone penetration increases, with Deloitte forecasting that in 2016 between 15% and 18% of in-store sales will be influenced by phones, equal to between GBP35 billion (USD56.9 billion) and GBP43 billion (USD70 billion). At the same time, the number of consumers with smartphones will rise from around half this year to 80%. This means that, while the cases of making payments on phones is low, retailers should look to integrate mobile with their online shopping channels in order to drive up sales.
“Mobile must be considered in conjunction with other shopping channels,” says Deloitte’s head of retail in the UK, Ian Geddes. “Consumers are researching products using the smartphone, browsing items in-store and then often completing transaction at home on a laptop or tablet.”
This is all the more important as smartphone usage appears to increase conversion rates. Almost three-quarters of shoppers that visit a mobile website or app during a shopping trip make a purchase. In comparison 66% of shoppers who don’t use their mobile go on to buy something. “The implications of the influence of mobile are vast and many retailers will be forced to rethink their approach,” says Geddes. “In a low growth industry, mobile represents an opportunity for retailers to create a distinctive experience for their customers and take market share.”
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