Every January I look forward to Deloitte’s TMT predictions. Deloitte’s Technology, Media, and Telecommunications Predictions identify the trends that will inform industry strategic thinking over the next year.
Last Thursday, I had the pleasure of attending Montreal’s Technology edition with Duncan Stewart, Director of Research TMT at Deloitte. During the session, Duncan touched on how millennials are likely to be the most pro-desktop of all age groups, that 80 of the world’s 100 largest enterprise software companies will have integrated cognitive technologies built into their products, that fewer than 25 percent of information technology (IT) jobs will be held by women and that touch commerce will see an increase in adoption. The prediction that stood out for me was touch commerce and how it will potentially play a critical role in improving the mobile experience and mobile commerce.
Touch Commerce: the mobile online checkout gets an express lane
Deloitte predicts that in 2016 the number of individuals who use a third party touch-based payment service to make a purchase on their mobile devices will reach 50 million regular users, an increase of 150 percent. Touch commerce enables a customer to make a secure first-time or subsequent payment on any merchant’s website or app without having to provide registration or log-in details. Authorizing the transaction simply requires the application of a fingerprint or two touches of a screen.
According to Deloitte, a third of respondents in developed markets browse shopping websites/apps on a weekly basis, but only nine percent make a purchase. This is consistent with several other studies that have found mobile to be an upper-funnel shopping activity. However, when consumers attempt to purchase on mobile, they often fail. According to Deloitte, cart abandonment on mobile can be as high as 80 percent.
There are several reasons driving high cart abandonment on mobile. According to eMarketer, the top 5 reasons that US mobile device owners do not purchase products via smartphone are security, screens are too small, slow navigation, shopping comparison is difficult and inputting information such as name, address and payment information is tough. Improving the checkout process has been identified as a key factor for increased mobile buying from several sources including Deloitte and iperceptions. Touch commerce enabled by third-party services removes much of the frustrations associated with the checkout process by reducing the process to a couple of touches of the screen.
Third-party touch-based mobile payment services
Deloitte predicts there will likely be two principal types of third-party touch-based mobile payment services in 2016. Third-party touch linked to the operating system (OS) should represent the majority of touch-based payments made in 2016. Deloitte explains that shopping applications can use existing information associated with the OS, including payment card details and home address. The second type of third-party touch-based mobile payment service is linked to existing payment service providers such as Visa Checkout or PayPal. Deloitte explains that prior to making the purchase the user needs to have opened an account with the payment provider and elected to stay logged in. To confirm the purchase, the customer only needs to touch the buy button. Deloitte references a merchant whose checkout process went from 103 seconds for customers to type in their full credit card and shipping information on the merchant’s legacy app to 17 seconds using a third-party touch payment.
Touch commerce is only one piece of the puzzle
Touch commerce could have a significant impact on reducing cart abandonment while improving the mobile checkout experience. However, retailers will only reap the benefits of touch commerce when mobile sites and apps are user friendly and appealing. As Deloitte explains a simplified checkout process is not the only prerequisite for mobile commerce. Marketers still have a lot of work ahead of them to improve the mobile experience. Touch commerce has the potential of increasing m-commerce sales but it’s only one piece of the puzzle to increasing sales on mobile devices.