Klarna CEO Niklas Adalberth tells TechWeekEurope why companies need to be prepared for the growth of m-commerce
Consumer attitudes toward mobile shopping are changing as shoppers choose to shop on mobile devices rather than trudge down the High Street. Between November 2014 and January 2015, 40 percent of UK online retail sales were completed through tablets and smartphones, according to latest research from IMRG and Capgemini. Although lagging behind desktop browsing, mobile eCommerce is on the rise; mobile shopping spend is expected to grow to roughly $291 billion globally in 2016.
With the fight for customer purchases increasingly played out on smaller, touch-enabled screens, retailers need to ensure the mobile buying process is as easy purchasing an item from a store. The frantic peaks of online shopping we saw on Black Friday and Cyber Monday highlighted to retailers the need for the front-end and back-end technology of its digital shop fronts to be efficiently designed – not just in traditional desktop interfaces, but on mobile devices.
The mobile shopping revolution is knocking at the doors of merchants; it is critical that they welcome it.
What’s causing the shift to mCommerce?
Consumers are increasingly reliant on their smartphones and tablets. If we leave our devices at home or in the office, we feel incomplete. These devices have become much more than just phones. Our devices are an in-the-pocket transactional tool used for email, texting, social sharing, shopping and countless other tasks.
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 ‘window-shopping’ on a mobile device to completing the transaction on the move.
New mobile payments solutions that allow for one-click purchases on the mobile, as we have seen from ApplePay, 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
Last quarter’s seasonal shopping bursts gave an indication as to how consumers’ digital behaviour is impacting how we shop – and boosted the revenues of merchants who got it right.
It comes down to delivering the ultimate customer experience. As consumers, we want to find an item, put it in our basket, pay for it and then walk away. Payment should be simple and straightforward – no matter the platform.
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.
Merchants need to ask themselves if their site can maximise the opportunity brought about by the increase in mobile shopping. 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
The mobile sales channel is 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 soft keyboard.
This friction means only three in every 100 sales begun on a mobile device are completed. However, there are ways to improve conversion rates significantly.
Merchants must make mobile payment as simple as mobile browsing – delivering convenience and removing the barriers to getting the product into the customers’ hands, without sacrificing security.
By reducing the amount of steps to purchase completion and simplifying the unnecessary registration process (or, better yet eliminating it altogether), retailers can boost mobile conversion rates by up to 60 percent.
My top four tips for online merchants
- 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.
- Think global – Consumers shop across borders, and service providers are making it simpler to sell globally.
- 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.
- 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 – 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. Merchants 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 CEO at Klarna
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