Can you briefly explain the main trends shaping out the ecommerce landscape in the US?
According to Gartner, by 2017 US customers’ mobile engagement will drive mobile commerce revenue to 50% of all digital commerce revenue in the US. Mobile payments are growing rapidly, with millennials leading the charge using Apple Pay, Samsung Pay, Android Pay, credit card and bank mobile pay apps, as well as individual store payments apps, including Walmart Pay. Mobile engagement is defined as customer service during the mobile purchase process. It can be done via Chat or even via social media.
According to market research firm eMarketer, the transaction value of “proximity mobile payments” will grow about 210% in 2016 to more than USD 27 billion. The number of users is expected to increase about 62% to 37.5 million people. The firm defines “proximity mobile payments” as point of sales transactions that use mobile phones as a payment method via tapping, waving or similar functionality.
In terms of technological advancements, what current or near future innovation will disrupt the way merchants sell to domestic customers?
Mobile commerce will continue to expand with retailers offering more customer engagement services through shopping apps, including customer service to help customers choose and purchase products. Brick-and-mortar product showrooms will allow customers to try products before they buy, and their purchases will be shipped from a remote warehouse. Drive-through pick-up, also referred to as “click and collect,” is already available from select retailers, much like curb-side pick-up of take-out food. We expect more and more retailers to offer pick-up service as it cuts their shipping costs.
Brands will focus more on building the brand than on specific products, making the brand more appealing to customers. Retailers will harness Big Data and identify analytics so they can better understand their customers’ demographics and market more successfully. Payments data is part of the overall demographic analytics, enabling retailers to see how customers spend, when, how much and at what frequency.
In terms of figures, can you specify which e-tail channel is mostly used by US consumers shopping domestically, be it mobile, online, or store and why?
Facebook’s IQ Research shows an increase of 35% in mobile purchases in 2015. According to Criteo, 29% of US retail sales are mobile sales. In fact, 30% of Cyber Monday 2015 sales were made on mobile devices. Millennials, in particular, use their mobile devices to compare shop pricing while they are in stores before making the purchase, whether it’s a mobile purchase or in-store purchase. In fact, for millennials, 57% of all their shopping involves a mobile device. For all generations, 47% have used their smartphones to do comparison shopping while in retail stores.
There is most definitely a generation gap in terms of Mobile Pay. According to market research firm eMarketer, by 2017, 37% of 25- to 34-year-olds will use a mobile payment method compared to just 6.3% of consumers who are 65 and over. Ultimately, mobile wallets will need to have a strong security track record to attract users across all demographics. With the EMV “chip card” adoption underway, mobile pay is a strong alternative since it is generally a faster transaction and many say it is also more secure. And in the case of Apple Pay, users can even pay with their Apple Watch.
Can you sketch out a brief but encompassing US shopper’s profile in terms of payment and product categories preferences? What about delivery options?
U.S. shoppers’ payment preferences can be broken down by generation.
Senior citizens (older Baby Boomers and Traditional generations) prefer American Express and checks. In fact, 68% of people over 65 years old prefer checks to paying over the Internet.
It’s not surprising that middle-aged people (younger Baby Boomers and Generation X) prefer credit cards since they were the driving force behind the adoption of the “swipe and sign” culture. However, many find the “dip and pin” culture of EMV difficult to adopt.
Members of Generation Y (born in the 1980s-1990s) grew up with credit cards and are comfortable using them, but they are also early adopters of digital technologies including PayPal and mobile payments. However, more than any other generation, members of Gen Y tend to rely heavily on cash.
Lastly, the millennials (born in the 1990s-2000s) are very comfortable with digital payments including mobile pay apps, Paypal and online payments.
While conventional wisdom says that millennials and teens are driving ecommerce, the reality is that 47% of online shoppers are 35 to 54 years old. In fact, 23% of online shoppers are ages 35-44, while only 18% of the population is those ages. As well, 24% of online shoppers are ages 45-54, even though less than 20% of the US population is those ages.
Sources:
https://www.bluepay.com/blog/how-different-age-groups-prefer-pay/
http://www.businessinsider.com/the-age-demographics-of-who-shops-online-and-on-mobile-2015-4
Will Mobile Commerce continue to grow and who is leading the charge?
Mobile commerce will continue to grow. According to Gartner, by 2017 US customers’ mobile engagement will drive mobile commerce revenue to 50% of all digital commerce revenue in the US. Mobile payments are growing rapidly with millennials leading the charge using Apple Pay, Samsung Pay, credit card and bank mobile pay apps as well as individual store apps including Walmart.
http://www.gartner.com/newsroom/id/2971917
Is the marketplace model, such as Amazon, the future of e-tail for US merchants or do you foresee other business models advantageous for standalone merchants in the near future?
While Amazon has proven to have a very successful ecommerce model, even it is going into the brick-and-mortar world with the opening of its first retail bookstore in Seattle in 2015 and plans to open hundreds more. With commoditised prices, differentiation tends to be slim with free shipping and fast delivery being a major differentiator, an advantage that Amazon offers.
However, we are already starting to see a blending of retail and ecommerce sales with “click and collect” services offered by Nordstrom, Macy’s, Walmart and Best Buy, that allow customers to buy online and pick up at the store, often curbside. Even Amazon has “click and collect” services. Called Amazon Locker, these stores are local warehouses and distribution centers all in one. Another future delivery method is drones. In fact, Amazon has already announced plans for “Amazon Prime Air” delivery services using drones to deliver packages up to five pounds in less than 30 minutes.
http://www.newyorker.com/business/currency/why-would-amazon-want-to-be-the-new-barnes-noble
https://www.amazon.com/b?node=8037720011
About Brian Lichterman
Brian Lichterman is director of Marketing for National Merchants Association, where he is responsible for developing and implementing strategic marketing initiatives for the company. He is an Electronic Transitions Association (ETA) CPP (Certified Payments Professional). He can be reached at blichterman@nationalmerchants.com.
About National Merchants Association
National Merchants Association is a global merchant advocacy group and a leader in merchant services dedicated to helping merchants and agent partners grow their businesses. The association works on behalf of businesses to eliminate the unnecessary and unreasonable fees associated with accepting electronic transactions. Visit www.NationalMerchants.com or call 866-509-7199.
Sav
Save
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now