The best is yet to come.
As long as checkout and payments are part of the plan.
In one sense, that describes the situation for mobile commerce — specifically, retail apps — as 2020 looms. New research from PYMNTS and LISNR digs deep into consumer views of mobile retail apps. In a new interview, Karen Webster and Chris Ostoich, co-founder at LISNR, talked about those findings and discussed what retailers must do to drum up even more interest in and loyalty to their mobile apps.
Perhaps fittingly for this early age of mobile commerce — retail on the go, if you will — Webster caught up with Ostoich while he was on the go as well. One of the messages he sent early in the talk was that even though so much attention is focused on mobile commerce, that flavor of retail is still very much in its infancy and has tremendous room to grow — not only in terms of sales, but also in seamless customer experiences. Merchants still face the massive challenge of getting consumers to download and use apps.
Five or Fewer Apps
The research found that about 78 percent of consumers have five or fewer merchant apps on their mobile devices. It’s not because of lack of choice — in all, some 5 million apps, retail and other types, are available for downloading. Part of the reason for that apparent paucity of useful retail apps is that consumers don’t seem to find much to do with them besides shopping. And as most PYMNTS readers probably know, it’s not only the shopping that matters — the payments and overall consumer experience serve to build loyalty among shoppers.
But things are changing, thanks in very large part to one very popular U.S.-based coffee chain. “Starbucks changed the game when they decided to do all of it themselves,” Ostoich noted. Not only that, but the success of the Starbucks mobile program — which stands as an example for all types of retailers — demonstrates on a daily basis how app value and experience can serve to bring more consumers into a particular retailer’s mobile ecosystem, he said.
That’s not all that works in favor of robust and popular mobile commerce: payments are also key. “If you come out with something ‘pay,’ and offer incentives to use the program, you’ll likely see a surge in downloads,” Ostoich said, using Kroger Pay as an example. Rewards or points or other incentives also help drive that surge, but the general point still holds.
In fact, the PYMNTS/LISNR research found that nearly 46 percent of mobile app users would be interested in downloading frequently-visited merchants’ offerings and using them to make payments if that would allow them to bypass checkout lines at brick-and-mortar locations. In comparison, just 36 percent say they would be interested in downloading these merchant apps as they are.
The main idea behind all that data and consumer desire? Consumers just don’t like friction-filled checkout experiences, and anything that can make transactions more seamless will win over mobile consumers.
But all glory fades, and no surge lasts forever. Incentives expire and impatient consumers in this increasingly mobile world move on. What can a mobile-minded merchant do to keep up excitement and interest in its mobile apps? Again, it all boils down to offering some experience that consumers cannot do without. For that, look no further than Amazon.
“When Amazon came out with Prime, it was free,” Ostoich said. “I really got used to the experience of being a Prime customer. Now I don’t even know how much I pay for it. I just know that I’ll pay for it.”
Back to mobile apps, the lesson boils down to this, according to Ostoich: “In many ways, payments are the gateway to other things, and can tie those experiences together.”
So what does the future hold for mobile retail apps, some two to five years out?
“You’ll see more apps rather than less,” he said. “You’ll store them on folders with all your favorite retailers you shop with, until someone figures out how to run one protocol on top of all those retail apps.”
“I think that’s called the voice assistant,” Webster said, noting the significant growth over the last year or so of voice-assisted retail technology, and the apparently deep interest among consumers for such features and tools.
That’s more than a little bit down the road, though. For now, merchants have to focus on providing experiences, and on using payments as a way to tie everything together. All that could help provide a new growth spurt for mobile commerce.