NEXT GENERATION INTELLIGENT MOBILE COMMERCE: ARE YOU READY? DECEMBER 2017
PERSONALIZED MOBILE IMAGE SHOPPING RECOGNITION (MIR) EXPERIENCE
22 years ago, Amazon launched an online book selling site. That same year in 1995, eBay launched its auction site. Large retailers followed suit shortly after – Victoria Secret and Zappos entered into the ecommerce arena along with other big players. Ecommerce has matured into a multibillion dollar industry. Based on research from Statistica, mobile commerce is forecasted to be a $669 Billion dollar (USD) industry by 2018.
In a mature market, customers expect more! They’re looking for personalized, immersive experiences. A mobile-first experience puts the power in the consumers hands – enabling them to shop from virtually anywhere! To capture the mobile marketshare, retailers will need to leverage, smart innovative technologies such as artificial intelligence and augmented reality to deliver a rich mobile commerce experience.
$ 700 B By implementing next generation intelligent mobile commerce solutions, retailers will see an immediate return on their investment (ROI).
$ 525 B
A tailored, personalized shopping experience, will: (1) increase your: basket size with proper product matching and complimentary product recommendations, (2) lower return rates and operating costs, and (3) improve your customer's experience and shopping frequency with your store.
$ 350 B
$ 175 B
$0B
2013
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2018
49%
of Shoppers that own smartphones prefer mobile sites & apps that recommend brands or products based on past views, sales & purchases. * Source - Think with Google
CUSTOMERS EXPECT A PERSONALIZED EXPERIENCE In today’s climate, smartphones are dominating and changing how people consume data. A mobile first strategy is now more important then ever before. A responsive website is a good start. However to gain customer loyalty, customers expect a personalized experience – specific to their preferences, yet done in scale to ensure every customer gets the same personal experience. The next generation of m-commerce solutions will be AI (artificial intelligence) driven. Based on Think with Google’s, Holiday checklist 2017: What to know about today's mobile-first shoppers, almost 50% of mobile shoppers are looking for a personalized shopping experience. Shoppers want retailers to provide them with recommendations based on historical purchasing and viewing data.
2X
MORE RETENTION ON A MOBILE SHOPPING APP THEN DESKTOP
HIGHER CONVERSIONS & SHOPPING FREQUENCY ON MOBILE APPS Retailers that provide a personalized, mobile shopping experience will see a lift in their customer lifetime value (CLV). Customers on average will spend more money, spontaneously on a mobile app then on a mobile site or on a desktop.
$150
Mobile shopping apps convert higher and they can deliver twice as much retention:
$100
$50
$0
On average a mobile shopper will come back to the app within 30 days.
$127
MOBILE APP
$100 DESKTOP
A mobile app shopper spend 20% more at the cart then desktop users
INTELLIGENT MOBILE COMMERCE ARTIFICIAL INTELLIGENCE Artificial Intelligence (AI) needs to be the backbone of a mobile commerce strategy. AI is a self-learning algorithm that looks at a shopper's contextual signals and their profile. The AI engine will look at the shopper's attributes and it'll make recommendations based on their behaviour, their profile and their session history on your site.
The AI engine provides personalized recommendations only showing the most relevant content, promotions and products to the buyer – optimizing the entire customer journey. Artificial intelligent mobile commerce apps will become the shopping standard your customers will come to expect within the next few years.
The AI Engine Will Look at a Shopper's: Browsing Behaviour - search terms, products that were viewed, product reviews, etc.
Shopping History and Buying Process - products, price, marketing channel and time
Demographic - age, gender, location, economic data, etc.
BENEFITS with AI: Personalized, intelligent shopping strategies will increase your sales by 6-10% according to Boston Consulting Group Increases your average order value (AoV) by being able to cross sell more items through contextual images that a buyer can visualize It shortens the sale cycle showing the right products at the right time which lowers the barrier to making a purchase
Lowers your returns rates – the algorithm in the personalized product catalogue only displayed best matched items
It lowers your cost of customer acquisition (CAC) by only advertising the products they’re truly interested in
65%
of Millennial prefer interacting with chatbots versus a live call centre agent! * Source - IBM Watson
CHATBOTS SAVE 4 MINUTES PER INQUIRY Chatbots have come a long way in becoming a true personal assistant. In the early days, chatbots had specific skills, such as turning on the lights, managing the temperature of your home, etc. Their role was to follow quick, single commands without the need of context to complete their task. Fast forward to support chatbots and these bots are built to master a specific discipline. Built with personalities to reflect the company they represent, These support bots understand the context of what they’re being asked and how to help their customers. Chatbots are extremely reliable – in some cases, they're a preferred method of communication. Based on a research by IBM Watson – out of the 1500 millennials interviewed (in North America), more than 65% preferred conversing with an interactive virtual agent (IVR or chatbot) rather then speaking to a live agent! Since messaging and texting has become the norm, (far less formal) texting a chatbot is easier then calling into a support centre or writing a formal email. Juniper Research forecasts that chatbots will be entrenched with our daily interactions by 2022. In 2017 alone, chatbots are saving industries a total of $20 million dollars and by 2022 over $8 billion per year.
On average when companies employ a chatbot, they’re saving on average, 4 minutes per inquiry compared to a regular call into a contact centre. Sephora is leveraging chatbots for customer surveys with an average completion rate of 40%. Much higher than other platforms. Uber, 1-800-Flowers and Burberry are also using chatbots to provide better customer experiences.
Benefits: 24/7 Coverage - reduce headcount and costs Consistent Messaging - not dependant on the soft skills of an agent
Multiple Capabilities - FAQ, sell, recommendations, schedule follow up appointments, handle returns, etc.
Chatbots won’t eliminate the need for call centres or human intervention. However, it will lower your operational costs by reducing the amount of resources required to do the same job.
MOBILE IMAGE RECOGNITION (MIR) BRIDGE A PASSIVE OFFLINE EXPERIENCE TO AN IMMERSIVE ONLINE MOMENT How do you streamline inspirational content seen on social media to commerce? Perhaps you see something on the go and you’d like to buy it? Where do you go to find it?
Shoppers can shop from virtually anywhere! They can proactively find the products with a few snaps of their camera.
Mobile image recognition (MIR) solves all that – it’s a visual image search. It enables shoppers to scan-and-buy a product within a few clicks. For a retailer, this solution can drive foot steps to the store or it can push for spontaneous m-commerce sales. As a shopper you can buy from anywhere! Let’s suppose you’re commuting to the office and you're eyeing a pair of shoes someone is wearing. Snap a picture and upload the image – the AI engine retrieves and displays a best-match, product catalogue of the items similar to the ones you were interested in. As a retailer, you can set display item rules, based on highest margins, most popular items, best sellers, etc.
VISUAL COMMERCE EMERGES FROM MOBILE
By understanding your customer's preferences, you’ll have a higher chance of converting the sale. At a bare minimum, you’ll know what’s on their wish list so you can send them relevant and timely promotions. MIR enables social shopping. Their friends will see the items they like and they'll gain exposure to your brand – lowering your customer acquisition costs.
DIGITAL WALLETS
Barriers to mobile shopping has been virtually eliminated. Mobile wallets enable consumers to pay for products quickly and securely.
1/4
CONSUMERS USE MOBILE WALLETS
Mobile commerce apps eliminate the need for users to enter their credit card details during a transaction – Visa and MasterCard Checkout, PayPal, facial recognition and biometric thumbprint have simplified the process. Digital wallets use tokens instead of credit card information. This process makes it more secure than swiping your debit or credit card at a terminal or during an online purchase.
The mobile wallet generates a random 15-16 digit number – even if the numbers were to be stolen, it would be rendered unusable. On iOS devices, the tokens are generate on the device whereas with AndroidPay, it is generated in the cloud. In addition to the random token, digital wallets usually require a two step authentication process such as your finger print – adoption of digital wallets is growing. A perfect example of this is with Starbucks. Starbucks has their own proprietary digital wallet and loyalty app. In the U.S. alone, the app has seen an increase of 20% usage during peak hours.
ONE CLICK CHECKOUT LOWERS ABANDONMENT RATES BY UP TO
80%
INTERNET OF THINGS
The Internet of Things (IoT) is one of the largest adoption areas for digital wallets. The leader in this spaces is with Apple, Samsung and Android Watches however, other global companies are following in their foot steps.
Gartner believes that by mid 2018, 50% of payments will be done through mobile wallets and wearables in mature markets such as North America, Japan and Western Europe.
Disney theme parks is using their Magicband, Alipay is partnered with Xiaomi, UnionPay and Swatch is partnered together.
Benefits of Digital Wallets & IoT:
Barclays’ bPay system has already launched in the UK with wristbands, watch straps, fobs and stickers. Other players in the market include: Jawbone, Nymbi, Lyle & Scott bPay Jacket, PayCapsule Flex, Ringly, Sony Wena, Fitbit and Microsoft Band 2. Wearables is an unexplored opportunity. Currently wearable solutions are isolated to just small tasks such as a fitness/activity counter, email notifications, etc. For wearables to take off on mass, it will need to include more functionality like the features that are shipped in a standard smartphone. Wearables must be "all encompassing" and include commerce functionality for mass adoption. It is predicted that transactions on wearables may even surpass smartphones in the next few years.
Secure Payments via Digital Token Proven Solution Backed by Financial Institutions Globally Accepted Payment Standard Helps those with Dexterity, Mobility Issues or those who are Handicapped
50%
OF PAYMENTS
WILL BE DONE ON MOBILE WALLETS & WEARABLES
AUGMENTED REALITY The idea of augmented reality (AR) has been around for a while, but only until recently, has there been an opportunity to use it. AR is a blend of Mix Reality (MR) – using a smartphone camera, it crunches mass amount of realtime data to display a world that is both real with computer graphic simulation. Augmented reality needs to provide a compelling experience to the consumer. Unfortunately, many AR functions are still looking like demos. Companies like L’Oreal have proven that AR is a viable sales tool. It gives their customers an opportunity to try on make up before purchase. Based on research from a U.K. company Digital Bridge, 68% of consumers surveyed expect retailers to have an augmented reality app. For retailers selling large ticket items like furniture and home appliances, a typical sale cycle can be from 3 to 6 months. Since design is subjective, consumers have a hard time envisioning the furniture or new kitchen appliances in their space.
Retailers can transform any person’s home into a store front with AR. Customers can try items at no risk and all in the comfort of their living room.
AR can shorten the sales cycle. 1/3 of consumers are more willing to buy on the spot if shown in an augmented reality view. It gives them an opportunity to explore different design styles without any investment or risk.
It can also lower return rates. In a Harvard Business Review, How Retail Can Thrive Without a Store, they point out the problem with “bracketing”. Customers will purchase multiple of the same item in different colours or sizes, with the intent of only keeping a single item.
Augmented reality doesn’t just provide an immersive experience for your customers, it's a revenue generating tool to reduce sale cycles and lower your return rates.
To gain wallet share in a fast-paced, dynamic marketplace, retailers must invest in next generation, intelligent shopping solutions such as AI, Chatbots, IoT and AR. Digital customers expect a better experience and they want retailers to use innovative technologies to gain their business. Customers expect personalization from the time they, browse your product catalogue, right through to the post-sales support they receive. To be fully covered in all these areas, one option is to hire more resources. However, to maximize your return on your investment (ROI), an innovative, intelligent retail solution is more effective in driving down costs and future-proofing your business. You'll achieve the business results you’re after, while staying competitive in an ever-changing landscape.
TheAppLabb is the catalyst for technology innovation. As a product innovation and development firm, we focus on helping our clients build mobile solutions that will disrupt their industry. Over 10 years of experience with 360+ global clients and over 500+ apps built, we offer strategic consulting, UX and UI design, custom software development and out-of-the-box industry solutions for several vertical markets. Let us turn your ideas into reality. URL: http://www.theapplabb.com Email: info@theapplabb.com PH: (416) 745 - 3164
Version: December 2017 - TheAppLabb ©