Payment Methods

Samsung Pay: Getting Past Contextual Commerce Friction

PYMNTS INTERVIEW WITH SAMSUNG PAY

For an increasingly growing share of connected consumers, contextual commerce is becoming a way of life – even if they aren’t exactly familiar with the term. With the rapid proliferation of shoppable social media channels – as well as the explosion of wearables, smart speakers and other connected devices that are location-aware, along with advances in voice-activated AI – for a growing cohort of consumers, contextual is just how they do commerce.

If you asked them, however, they’d probably just say they were shopping, and the word “contextual” would never come up.

And this isn’t a small or niche subset of consumers – according to the latest edition of the Digital Consumer Report, a PYMNTS/Samsung Pay collaboration, 58 percent of consumers reported engaging in contextual commerce. Of that 58 percent, 81 percent said social media was their contextual commerce channel of choice.

And the prevalence of commerce in context is only likely to grow, particularly as wearables proliferate and consumers’ interactions with voice assistants become a bigger part of their daily routines, as Samsung Electronics America’s Content & Services’ Head of Merchant Solutions, Bjorn Ovick, noted in a recent conversation with PYMNTS and Craig North, director of merchant verticals at Samsung Pay.

“Looking at social media, it’s a mature form of interaction today,” Ovick said. “I think that as other channels such as voice continue to mature – both from a platform capability perspective such as utilizing consumer location data, as well as the comfort of interacting via voice – we will see them start to pick up wide distribution.”

North concurred, noting that the emergence of connected devices creates both an opportunity and a challenge for payments players looking to be part of the contextual commerce shift in retail, building seamless transactional experiences across all of those emerging contextual commerce interaction points.

The Three Pillars

It is easy to celebrate the 58 percent of consumers who have made the leap to contextual commerce, or the 80 percent who have a connected device other than a smartphone, laptop or tablet, or the fact that 36 percent of consumers are now “super-connected” and own six such devices.

But one must also consider the 42 percent of consumers who are sitting out contextual commerce. And the fact that while nearly half of all smart speaker owners use their smart devices as part of the shopping process, less than a quarter have actually used them to make a purchase.

Much progress has been made, Ovick noted – but there is still a fair distance to go. And the advance of contextual commerce in the future will be built on three main pillars: awareness, trust and friction fighting.

Of those, he noted, awareness is the most straightforward. Consumers are clearly aware of all their digital channels, but aren’t always aware of the commerce capabilities they offer.

“Sometimes the customers literally just don’t know the true power of what they can do with these platforms,” Ovick said.

The awareness gap, he noted, is also the one most easily closed – with marketing, and by bringing the payment process forward so consumers know they can buy with a single click.

As well, Ovick shared that Samsung has introduced location marketing capabilities so consumers can opt in to get hyper relevant content based on where they are. The service launched in 2018 in Samsung Pay.

But simply making the customer aware is only a third of the journey: Knowing that one can buy something and actually feeling the urge to complete the transaction are different things.

And for the latter to take place, Ovick said, contextual commerce experiences have to provide for the two more complex support pillars: trust and friction.

A Trusted Space to Transact

Trust, both Ovick and North noted, is in some ways the hardest requirement to meet, because these channels are new and emerging. Consumers want to know their data will be safe when they transact on a social channel, or that the transaction will actually be completed when they tell their voice assistant to make a grocery purchase.

And brands and technologists have to do a lot of work to build trust in these emerging forms, they noted. As an example, voice assistants need to do more than just understand what a person is saying to them – they need to be able to authenticate that person’s identity.

“Nearly 55 percent of households have a smart speaker at this point,” North said. “This is growing like the microwave in the 1980s. The technology is getting more advanced, and it’s important to properly identify the user in a household with different voices interacting with it.”

It means knowing, for example, that children have limited purchasing power over the voice platform. Or, “when I tell it to order my coffee at the café, it knows it is talking to me and not my wife,” North added.

Consumers also need to be able to trust they are working with reputable merchants, Ovick pointed out – which is why Samsung vets every merchant before they are cleared to accept Samsung Pay as a payment method. While they can’t speak for other platforms’ processes for accepting merchants, Ovick noted that part of building payments trust is letting customers know that if a digital merchant accepts Samsung Pay, they have been vetted and deemed legitimate.

That trust is critical, he said, but it’s not enough for the path forward to be familiar and safe, as consumers already have those options. The contextual commerce experience also must remove friction from their lives, without adding new forms of it.

Fighting Friction Going Forward

The appeal of contextual commerce is its natural flow. The customer sees an item on Instagram and buys it while it is fresh on her mind, or adds peanut butter to his shopping list by calling it out to the voice-activated assistant.

But all of that convenience is gone, Ovick said, if the customer has to endure some kind of lumpy process to finish the transaction. No one wants to type their billing address, a promotion code or their 13-digit card number on a mobile device — or shout it out loud to their friendly household AI.

“The customer wants all of that to go away,” North said. “They want to add a card once, and if they lose it, they want to update it once. From there, the back-end management system needs to handle it, so the information follows the customers across their devices and is easy for them to use, but they don’t get fraud and they don’t get chargebacks.”

Another way Samsung aims to remove friction is through its Samsung Pay Cash Back program. Users locate merchant offers in the “deals” section and tap to earn cash back. Samsung Pay links to a merchant’s mobile app or site for users to shop like normal. Once customers complete a purchase, they are notified of how much cash back they have earned.

When the transactions are easy and secure, contextual commerce can live up to its potential, both Ovick and North noted, because the customer will be free from thinking about anything but the transaction itself. It won’t happen overnight – the rapid rise of contextual commerce on a variety of channels sometimes makes people forget it is still early days – but it is happening, and will likely accelerate as the technology improves.

“We will start seeing more purchases on social and voice channels, and will also see those purchases get larger,” Ovick said.

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