In the past couple of years, technology has been advancing at an explosive rate. Notably, the new and emerging areas where technology is heading towards is social and mobile. As you may have read earlier on in our recent news post, Paypal commissioned The Nielson Company in 2011 to conduct an extremely comprehensive research study on Singaporean online shopping habits on their mobile devices (tablets and phones).
This study revealed how much Singaporeans are spending online, via their mobile devices, and how much growth is expected. In 2011, from just mobile shopping alone, Singaporeans managed to spend a whopping S$328 million on goods they can’t see, touch or smell - up from 660% from the paltry S$43 million that 2010 saw.
And based on the rate of growth it’s estimated that by 2015, those numbers would balloon up to about S$3.1 billion dollars. Just as we suspected, mobile shopping is going to be a large part of our lives; sooner or later, businesses will want a piece of this fast growing mobile commerce market. Even at this point of time, having an online presence simply isn't enough anymore, as user experience in the online buying process plays a huge role too.
The challenge goes up a notch further for mobile commerce. All that tapping, pinching and zooming just to read, view the pictures and clicking on links are but a staple when it comes to non-mobile friendly sites. Research has shown that when an online retail store isn’t built for mobile usage, users who aren’t in a dire need to procure a service or product actually just quit searching or stop their check out process mainly out of frustration.
Unfortunately, as things stand today, a large percentage (79%, according to Paypal) of local businesses do not have a mobile-friendly website. Of course, you can argue that all they have to do is build a mobile app, which sounds easy enough. Except in this case, the costs of building a mobile app is a luxury that most small medium companies cannot justify (yet). Just as restrictive to these businesses on a budget would be to create a mobile version of their site that loads when customers patronize via their mobile devices.
Paypal as a facilitator of mobile payments - who processed an estimated US$4 billion in mobile transactions globally in 2011- it is definitely in their interests that merchants, online or offline, sign up for their mobile payment services. So what better way to entice retail businesses from signing on, than to proactively take on one of the major costs that merchants face when trying to get their retail website mobile-friendly -- or especially more so, mobile-commerce ready?
That is what PayPal’s "mobile commerce in a box plug-in" (created by Ezimerchant, an online merchant solutions company) is all about. It converts your existing website (which has to be using either ZenCart or osCommerce shopping carts) into a mobile friendly version without messing up your regular site. All you have to do is to plant a plug-in into your website's code, and let it work its magic. And just like that, your website is immediately mobile friendly.
For an example of what "mobile friendly" means, just look at the sample shot that PayPal has provided below. Its gone from cluttered, to neatly arranged with big navigational buttons that make it easy for you to search and buy what you want. This makes for a much better mobile buying experience for customers.
According to Paypal’s research, websites that have been optimised for mobile devices would experience a bounce rate which is almost ten times lower (61% down to 7.4%). This simply means customers don’t leave out of frustration, which naturally leads them to spending more time on the online retail front (from 2:35 minutes to 4:48 minutes). And if they find a better experience waiting for them, they’re also more likely to return often, helping to raise the average number of page visits to jump from 3.13 to 8.19.
Judging from PayPal’s numbers, 20% of a merchant’s customers are currently accessing the retail site via mobile devices. And if you take those numbers, do a little math on the previous set of numbers, you will see that many online merchants are still letting quite a significant number of potential customers slip from their fingers.
So far we’ve been covering this from a merchant’s point of view, but what about normal consumers like you and me? Where do we stand to gain from all this? PayPal’s strategy so far is a two-pronged attack, but ultimately there is just one goal. To make it easier for consumers to spend their money, from their mobile devices.
And when this happens, PayPal and their merchant partners would of course be the first to benefit, but consumers would also benefit from the ease and convenience in which they can spend on the things they care about.
If (or rather when) PayPal succeeds in getting more merchants to get onto the mobile commerce bandwagon, we could perhaps ditch our wallets and cards, and just rely on our phones for everything. This would mean buying services and products by scanning quick response (QR) codes and tapping on NFC enabled (Google Wallet) checkout hardware would be the way to go.
But of course, security would be an issue wouldn’t it? What if you lost your phone? Does that mean someone can just use your phone and go on a mad shopping spree? Well technically they can. But then again there is always PayPal’s buyer protection policy, something that is undoubtedly a policy brought over when PayPal and eBay were two peas in a pod (PayPal is now much more prominent all over the web).
As of the time of writing, PayPal is actively trying to get Singaporean merchants excited about their plans for mobile commerce strategy. However, we can’t really find a reason why these merchants wouldn’t want in on such a rosy picture. And having said that, I really wouldn’t mind if tomorrow we can just pay for our coffee, shoes, vacation, bills, and even the kids' pocket money using our smartphone. But would the general public feel the same way? Do share your thoughts with us.
Boon Yeow's personal tech buying guide = aim for the top, go a notch down. Chances are you will end up with the product that will stay relevant for the next couple of years.