In October, Euromonitor International was pleased to participle in Mobile Shopping, a three-day conference in sunny Palm Springs, California that brought together retailers and startups in fashion, technology, travel, finance, consumer foodservice and more to discuss the world of digital commerce. At the same time, these brands shared their approaches to mobile shopping, presented technologies and tactics that are poised to significantly change retailer and consumer behavior and discussed the ongoing efforts to continue to improve the consumer journey; whether it starts in-store, on the desktop or with smartphones or tablets. When all was said and done, two major findings were uncovered: the importance of speed in terms of rates of conversion and retention, and ultimately sales and the need to provide consumers a frictionless shopping experience.
The need for speed
Speed, speed and more speed. The topic quickly became almost a mantra echoing against the walls of the Omni Rancho Mirage Hotel’s conference rooms. Perhaps not as well appreciated or fawned over as augmented reality and artificial intelligence, the factor that retailers stated as the biggest sticking point was the speed at which consumers reached, uploaded, browsed and checked out from their online stores and mobile or native apps. All agreed that slow speeds negatively impacted the consumer experience. In fact, speed is so important that Google found that 53% of users leave a site after just three seconds. However, speed is not just an issue that results in bad public relations or droves of angry online posters. Slow and unresponsive online stores and apps and complicated checkouts are detrimental to sales.
Being speedy is particularly important when it comes to the conversion rates on smartphones and tablets, in comparison, to conversion rates from a desktop. Conversion rates for the former range from one third to one half of those for the latter. Slow speed is also a major contributor to the success of brands with swift, seamless checkouts and those with long, cumbersome ones. According to 1-800-Flowers, it originally had a checkout process that included 13 steps! It has since rectified that issue and saw its conversion rate increase between 40% and 140%. Leaders in mobile shopping have a checkout process that takes less than one minute.
While all agreed that slow speeds tainted the consumer experience, solutions to this problem varied. Some, including Morgan Chemij of HP Inc., suggested using AMPs, Accelerated Mobile Pages, which have an average load time of less than one second. AMPs also use less than 10% of the data that non-AMP pages use. Another option is Progressive Web Apps, which allow for faster browsing. PWAs are strongly supported by Google and can even scan QR codes. Moovweb, which manages the online store and mobile app for 1-800-Flowers, looked to speed to improve the consumer experience and increase sales. More specifically, it set out to create sub-two second loads, create an app-like experience using PWAs and produce a one minute checkout.
Speed is an issue with in-store purchases as well as returns. According to Karyn Garske, Manager of Product Management for Macy’s Mobile App, the company is piloting a mobile express checkout in one store in New Jersey. All coupons and payment information will be done on the phone, while a store associate will still be required to remove security tags. Removal of security tags is a point of friction they will be studying to see if the program is worthwhile. The retailer is also using an app for store associates to scan and check inventory in stores, and have products available when consumers want them.
By observing and listening to customers, Nabarupa Banerjee, Senior Director, Head of Product and her team at Sam’s Club, found that wait times at checkouts were a major pain point for consumers. Once they determined that they couldn’t scale using cashiers, they decide to test Scan and Go. In addition to reducing checkout times, Scan and Go has also proven to commit consumers to digital.
Speed is also influential in other areas of the consumer’s digital journey. One area is that of product discovery, that is, how consumers are able to find products and services provided by retailers. As more and more marketing dollars go to online campaigns in social media and search engines, it is essential for retailers to know that their money is being well spent and leading to traffic and conversions. To emphasize the relationship between speed and product discovery online, Moovweb claims “page speed is the new battle-ground for SEO”.
Creating a frictionless world
In addition to speed, setting the ground for the optimal consumer journey relies on reducing friction for consumers. Friction, as defined by the attendees, is anything that defiles the consumer experience and discourages participation or sales. More specifically, Kris Hamrick, Business Unit Executive of Watson Commerce at IBM stated “customers want immediate responses with transparency and hyper-personalized concierge services. They want frictionless and effortless experiences.” Just like with speed, the issue of friction originates in concerns for the bottom line. According to Accenture, the cost of friction equals USD1.6 trillion in lost revenue. Besides speed, examples of friction include multiple step checkout processes, broken pages, forms that don’t auto populate, etc.
Friction can also be industry specific. According to Sean Hosley from Cheap Caribbean, an Expedia-like company for the region, conversion rates for mobile suffer due to the high value of trips. Consumers are also more reluctant given the amount of data the company is required to collect from travelers during booking. Turning over data was a concern repeated by Jeff Ulrich, Sr. Manager, Digital Innovation & Mobile App at United Airlines, who discussed his company’s efforts to increase use of Alexa by consumers when it came to checking flight status and checking in. Mark Decausmeaker, Director Multi Channel Sales of Reeds Jewelers, shared Mr. Hosley’s thoughts regarding higher prices and friction. He said the company has an average order value of around USD60.00, and the cost of an order can determine whether a person purchases via desktop or smartphone.
Knowing what friction is and how it affects one’s organization is just part of the puzzle. Finding the other piece of the puzzle is what retailers are currently working on. The strategy for Sam’s Club and Wal-mart involves making it that consumers don’t have to download an app to have the best mobile experience. In fact, the downloading of a native app is a high barrier of entry, and many retailers find them unnecessary. Sam’s Club and Wal-mart also found that native apps are more susceptible to bad in-store Wi-Fi.
Friction also occurs at the product discovery stage. HP Inc. has beta tested several options to see how these could help move consumers during the research stage to enter its site and potentially purchase one of its products. One of these options is price extensions. Price extensions show information, mostly products and their prices, directly from searches as opposed to the user having to click into individual links to find out the product offering and prices. Having to click several times increases friction and increases the chances that users will leave the site or app. In 2016, Google added the option of price extensions on smartphones and tablets with them appearing below the main ad copy.
Other solutions include using single page architecture, which favors scrolling over excessive clicking and moves consumers quickly to where they want to go and where retailers want to lead them. Fixed footers also reduce this problem. Swiping left and right to make quick decisions and removing clutter were also suggested as ways to decrease friction in the product discovery stage.
A common complaint that retailers were hearing was the time in which it took to checkout, including the input of data. One solution used by Sam’s Club is that customers can use their phone to scan their driver’s license and import data without having to type it. Equifax is attempting to reduce friction with its version of a digital wallet. InstaTouch ID was conceived to provide an easy, seamless way to make payments using the data Equifax already has on consumers. According to Hrishi Talwar, Senior Director Product Mobile & Emerging Technologies, 50% of consumers leave after visiting a company’s homepage. Part of this, he argues, is due to the friction in updating addresses and other data. InstaTouch ID would be prepopulated and reduce this friction. Additionally, Equifax argues that its product would reduce friction by pre-verifying third parties – a process that retailers like Amazon already go through with them - and providing an instantaneous credit and eligibility check. Auto populating, such as filling in the city and state when a user types in the zip code, was also suggested as a way to reduce checkout friction.
In conclusion, a speedy and frictionless experience complements and improves the consumer’s journey, which results in increased conversion, retention and sales for retailers. Success in these areas have not been easy, and improvements are constantly being formulated. For example, early on retailers saw mobile and desktop shoppers as one and the same, but now they know that these shoppers are having different experiences and must be catered to accordingly. Finally, it is important to note that increasing speed and reducing friction are not simply periphery activities that lead to more core sales activities, instead they are drivers of sales in themselves. This is clear when we look at a study by Stella Service, which found 81% of shoppers will pay for a better customer experience.