Cashing in on mobile payment

Eight years ago, Starbucks developed an app for mobile payments. Today, it is still held up as the gold standard in the US.

In Asia's rapidly developing market, where mobile payment is almost a decade ahead of the West, things are quite different.

In China, you can mobile pay for everything, from cab fares to a utility bill. In 2015, WeChat registered more financial transactions in a day than PayPal did in 12 months.

It is not just China that is adopting the trend - mobile payment is also making massive inroads in South-east Asia as shopping apps gain popularity.

In Singapore, there are 30,000 retail points accepting contactless payment methods, such as Apple Pay, Android Pay and Samsung Pay.

In Indonesia, the most populous country in the region with 250 million people, most of the big traditional retailers are unveiling e-commerce plans of their own.

In a recent GfK study, The Connected Asian Consumer, consumers here and in Indonesia reported fairly high usage of shopping apps (37 per cent and 35 per cent, respectively).

This growth is fuelled by affordable smartphones, a massive young and tech-savvy population as well as efforts by governments and telco operators to expand and improve high-speed wireless networks.

It is only a matter of time before mobile payment goes mainstream.

Unfortunately for traditional retailers, the age of e-commerce also produced a new consumer - we like to call them the "connected consumer" - and their behaviours are shaping the future of retail.

In the GfK FutureBuy survey last year of 20,000 consumers in 20 markets, it was found that shoppers are becoming less loyal to any one retailer.

Almost half (46 per cent) of all consumers (aged 14 to 65) stated that they are less loyal when shopping. This figure rises among the youngest consumers - to 53 per cent of Gen Y (aged 18 to 29) and 58 per cent of Gen Z (aged 14 to 17).

For retailers who understand the connected consumer, there are opportunities to stay ahead of the competition - and mobile payment is a huge part of it.

Despite becoming less loyal, many connected consumers expect an omni-channel shopping experience, where they interact with a brand. Connected consumers in Asia-Pacific seek the best of both worlds.

For example, shoppers in China are the most likely to embrace omni-channel shopping - 71 per cent shop both online and in-store, while Australian shoppers are the most likely to shun online shopping (62 per cent shop exclusively in-store).

In contrast, Indians lead the way in online shopping with 23 per cent shopping the category exclusively online.

NEW REALITY

Therefore, it is important for retailers to understand the new reality of the omni-channel consumer and know that the "whatever, whenever" culture demands that user experience is seamless across all devices.

If retailers do not understand this, customers will simply delete their app and move on.

At the same time, using analytics, retailers can receive customer data to offer more personalised services. In turn, this presents an opportunity to generate long-term relationships.

But it is important to note that not all connected consumers are the same.

For example, older consumers are not as comfortable with sharing personal information as younger consumers.

Understanding the shopper's purchase journey is easier these days, with research offering detailed information on the route shoppers take when making a purchase as well as ways in which online and offline touchpoints influence their decisions.

We believe that brands that understand, respect and protect the consumers' individual boundaries will earn their loyalty.

As mobile payments continue to grow in Asia-Pacific, businesses in sectors such as financial services, cybersecurity and telecommunications stand to gain, and they can evolve to support the changing landscape.

Loyalty is great, but to really retain customers in today's omni-channel space, the shopping experience is equally important.

To connected consumers, simplicity and convenience is paramount. Not only do they expect everything quickly, they also lose their patience faster.

For large retailers, mobile payment offers the opportunity to segment and target consumers much more effectively, with highly-personalised offers.

Discounts and offers can be integrated into mobile payment, replacing the need for physical coupons and entering information into a terminal.

Connected consumers will wave goodbye to the traditional checkout queue and benefit from customised rewards.

Mobile payment also offers a chance for small retailers to move into a new era of retailing. Freed from high transaction fees and with new ways to connect with consumers, they can embark on the kind of personalisation and targeting that is usually the privilege of larger players.

With e-commerce here to stay, there is plenty of potential for retail businesses to leverage research intelligence to adequately design and develop strategies to target this group of consumers.

---

The writer is regional director of GfK Asia, which provides market and consumer intelligence. This article 
first appeared in The Business Times 
on June 9.