Australian retailers failing on mobile commerce

Published on Tue, 20/09/2016, 07:17:41

|

A new report by PayPal Australia into smartphone users has found a significant gap between consumer behaviour and the retailers supplying them. 

Although 71 per cent of respondents to the inaugural PayPal mCommerce Index reported using their mobile devices to make purchases—with 22 per cent indicating they spend more than $500 per month via mobile—only 49 per cent of online businesses were optimised to accept mobile payment.

In addition, almost one third (31 per cent) of businesses have no plans to optimise for mobile sales, despite Australia having one of the highest levels of mobile penetration globally with 80 per cent of the population owning a smartphone.

PayPal Australia managing director, Libby Roy, says businesses need to accept that mCommerce is increasing and adjust their strategy accordingly. 

“The mobile payments landscape is fast-evolving and the Index reveals how habituated Australian consumers have become to mobile shopping with more than a third of us making mobile payments at least once a week—a figure that jumps to 47 per cent for the under 35s,” she says.

“So although online businesses may think they don’t need to optimise for mobile now, they will have to if they want to stay competitive in the near future.”

Retailers who don’t optimise for mobile are denying themselves potential sales. The report found that ‘filling in lots of form fields’ and ‘payment sites that don’t work on mobile’ were identified as areas of difficulty or annoyance by 52 per cent and 44 per cent of respondents respectively.

“Designing beautiful experiences to enable mobile commerce is something businesses need to think about,” says Roy. “One of the best examples of this is Uber—payment is frictionless.

“I would urge all businesses to stand in the consumers’ shoes and experience their website and how it translates to mobile, because getting that experience right will translate to more purchases.”

Who is shopping on a mobile device?

The research shows that millennial customers are more likely to shop on a mobile device than any other demographic, with 85 per cent of smartphone users aged 18-34 buying via mobile compared to 73 per cent of 35-49 year olds, and 52 per cent of over 50s. Younger Australians also shop from their mobile more frequently than other age groups, with 47 per cent saying they do so at least one a week.

Australians are most likely to engage in mCommerce when relaxing at home or watching TV, and they shop on mobile devices because they enjoy the convenience, it saves time, and is easy. Men in particular are likely to use mobile payment for these reasons.

What are consumers using mCommerce for?

Bill payment is the category dominating mobile transactions, with almost three quarters (74 per cent) of respondents making phone, utility, insurance and other bill payments. Other strong mCommerce categories include ticket sales (53 per cent), clothing and accessories (43 per cent) and travel (38 per cent).

“Regular and familiar use, resulting in less concern about security, is what makes mCommerce more popular in these categories,” explains Roy.

Although some consumers feel safe doing certain transactions via mobile, security concerns are still a barrier for many, with 46 per cent of respondents worried about security when shopping on a mobile device.

Social commerce: the new frontier

Social commerce, or shopping via a social platform like Facebook, has emerged as the new frontier for online retail, says Roy. Already 11 per cent of Australian consumers say they have made a purchase via a social platform in the past six months, and seven per cent of Australian businesses indicate they accept transactions via social media.

However, there is a huge gap between the early adopters and the majority in the business community. Despite consumer appetite, 34 per cent of businesses report having no social media presence at all, while 89 per cent say they have no intention of accepting payments via social platforms within the next six months.

Social media is also shown to be a strong channel for driving purchases with 18 per cent of respondents buying something after seeing it on social media, a figure that jumps to 24 per cent among the 18-34 age group. Despite this, 28 per cent of businesses don’t believe their customers want to buy via social media platforms.

With the growing trend for social commerce, businesses need to change how they are using their platforms, says Simon Holt, financial services partner at Facebook Australia.

“How businesses are approaching social in 2016 is very different,” he says. “If we rewind to a few years ago, businesses were focused on engagement and building a community. We’ve worked really hard to educate businesses on the value social can bring to their business goals. We have seen a real demand from users of our platform to be able to transact more easily.”

In fact, Holt says Instagram decided to allow direct purchasing through the app after seeing streams of comments on business profiles from consumers asking where they could buy the product pictured. Social commerce is also on the rise in the US, where Facebook has partnered with Uber to allow users to book a ride while talking to their friends in Messenger.

Although Australian retailers seem slow to adopt mobile and social commerce, Roy says she thinks they will catch up.

“Businesses can’t afford to ignore social commerce going forward,” she says. “If I was talking to a business owner, the first thing I’d say is that mobile and social commerce is with us and you need to think about your strategy. How can you use the technology to add value? I have every confidence in Australian business.”

Security concerns

With both mCommerce and social commerce, security is a significant barrier for consumers. In fact, 46 per cent of respondents who said they were concerned with security were less likely to be weekly mobile purchasers and also had a 24 per cent lower average spend on mobile devices.

“This implies a clear need for consumer education and support around the security and integrity of online payments,” says David McLeod, research analyst at Roy Morgan, who conducted the research.

When it comes to social media platforms, about half of those surveyed said security and safety is a concern, and 59 per cent said they didn’t want their financial information linked to their social footprint.

“If we look at the history of commerce in Australia we know that the incidence of internet purchases over a three month period back in 1999 was approximately five per cent,” says McLeod. “In 15 years it’s certainly possible that purchasing via social media by smartphone users will be as ubiquitous as online payments are now.”

PayPal’s mCommerce Index will be an ongoing, twice-yearly barometer on the state of mobile commerce in Australia. Want to know more? Check out the full report here.


RELATED ARTICLES



comments powered by Disqus
643

© The Intermedia Group. www.intermedia.com.au | Click Here to Advertise | Privacy & Copyright |