Hello, smart commerce
I book a flight to San Francisco. I need a jacket, so I have Trunk Club send me some new threads based on my preferences and their personal stylists. This triggers SilverCar to reserve an Audi A4 for when I land -- no lines, no rental car agents, no credit card processing. When I get to my hotel, my OLO app asks if I’d like some carbonara delivered from my favorite Italian restaurant. I click yes. Realizing I forgot my charger, I order one from eBay Now to have it delivered to my room, and within the hour it arrives. My YPlan app shoots me some options for events that evening. I book a last-minute ticket to hear Alt-J at the Fillmore and recruit a few friends to join me. An Uber picks us up, and we’re off to a great night.
Five years ago this would've sounded like science fiction. Today it's looking more like our mobile commerce reality. I call it the Smart Commerce movement, and it's driving some major behavioral shifts.
As our phones have evolved from single-function devices to multitasking personal assistants, the very foundations of commerce have begun to shift. New technologies like PayPal’s Beacon and order-ahead services like OLO will soon render wallets and cards virtually obsolete. In just a couple of years we've come to expect our apps -- think Yelp, OpenTable -- to know our tastes and provide relevant, context-driven experiences. Mobile will soon become synonymous with personal concierge.
Since we're still in the season of prognosticating, here are some predictions:
Conversions on mobile will increase significantly. Time spent shopping on mobile devices has risen steadily the past few years, but most of this is still time spent browsing. According to a recent BrightEdge study, mobile users convert at one-third the rate of desktop users. Why? Largely because improvements to the checkout and payment process haven't kept pace with those on the browsing side.
Consumers still have to manually enter payment details -- everything from credit card numbers to billing and shipping addresses -- across almost every transaction. By the end of 2014, there will be a dramatic increase in the percentage of mobile conversions, as more businesses optimize the payment process. Mobile optimization will increasingly become the base level expectation; businesses that don’t remove the friction from m-commerce transactions will lose out.
Average order values will increase on mobile because of convenience and personalized experiences. Today, the average order value on mobile is relatively small, especially as compared to PCs. Historically, consumers have made their big purchases on PCs because browsing and comparing prices across multiple sites is easier on a large screen. But this year, for the first time, average ticket values on tablets surpassed those on PCs.
Mobile phones still have some catching up to do. But technology continues to improve, shopping experiences are becoming more tailored to the shopper, and retailers are directing more marketing toward mobile users. These factors will help consumers feel more comfortable making big purchases on their phones. If you search for a pair of jeans on your phone and instantly are presented with a pair that is the right brand and size, you’re not likely to take the time to shop for more options. Or if Pottery Barn does a promotion that gives you an extra 15 percent off if you buy that rug you’ve been looking for on your phone, you’ll be more likely to make that purchase.
Mobile shopping in the physical world will continue with the convergence of e-commerce and in-store commerce. A tiny percentage of mobile transactions at the point of sale are happening on mobile phones; I don’t expect that to change significantly next year. But the Uberization of the in-store experience will increase as larger retailers invest in making them happen. Case in point: Line-busting, where you pre-order the item you want, show up to pick it up and then buy it straight from your phone, without ever interacting with a sales associate. Showrooming, where people visit stores like Best Buy to explore and test products but buy them online, will also grow in 2014.
The mobile concierge will come of age. For as long as we’ve had smartphones, we’ve been sending them precise information about our interests. Mine knows exactly where I am at all times, which lunch spots I frequent, my favorite coffee, recent purchases and even upcoming travel plans. That's a massive amount of contextual data, and soon our phones will be able to offer us concierge-like experiences, unprompted.
Smart Commerce is beginning to happen in cities like London, San Francisco, New York, and Chicago. In the months ahead, it will extend far beyond those hubs. In the very near future, commerce will become as effortless and magical as an Uber ride. Shopping will be a highly personalized, context-driven experience -- one facilitated by the touch of a button.
It's an exciting time to be making predictions, and for entrepreneurs an even more exciting time to build a platform to enable the mobile commerce of the future.
[image via Vadim Sherbakov]