I attended a briefing from Visa Europe yesterday, about its V.me digital wallet. Here’s what Visa said:
V.me is more than a mobile digital wallet. Customers will be able to use V.me to make online payments too. It lets users check out at online stores using a one-click solution that remembers card details from multiple providers (including MasterCard and American Express cards) as well as billing details and postal addresses.
V.me is not just about mobile contactless payments. V.me will support a variety of ways to initiate payments including bar codes and QR codes, as well as NFC.
Visa intends to distribute V.me through its member banks, much as Visa cards are distributed today. BBVA will be the first issuer in Spain.
V.me is already in extended pilots in the UK and Spain to test the system and will launch formally in both countries soon. France will be next. V.me will start rolling out into stores in the UK next spring. Officially V.me will be available in France, Spain and the UK by next summer. (Visa Inc has already launched V.me in the US).
I recently had a chance to catch up with another global eCommerce enthusiast: Hendrik Laubscher works for PriceCheck, a price comparison site in South Africa owned by MIH Internet Africa. He and I sat down for a coffee to talk all things developing eCommerce markets. A few things that came out of our conversation:
In South Africa, payments and broadband connectivity remain hurdles to eCommerce adoption. South Africa, the continent’s largest eCommerce market, remains at a relatively early stage, with several inhibitors preventing the market from truly flourishing. Although credit and debit card usage is growing, overall penetration remains low, even in comparison to other large emerging markets. PayPal offerings have been a challenge, as well — currency issues and restrictions that required users to be registered FNB online banking customers prevented many from taking advantage of this payment method. Additionally, the country’s low overall Internet penetration — in particular, broadband penetration — also presents hurdles. The CEO of Woolworths in South Africa recently said that faster, cheaper broadband was essential for eCommerce to flourish, but estimated that this scenario remained “about four years off.”
Here at Forrester, we’ve been evangelizing the concept of agile commerce for a while now, and we are working on a stream of research building on the concept and digging into exactly how leading organizations are transforming themselves to embrace the era of agile commerce. One of the questions I personally get asked is what exactly does an agile business look like? How do you recognize one?
In speaking to a number of leading practitioners in this space, I have found that there are four things that agile businesses have in common. They:
Architect the experience. Agile organizations don’t allow touchpoints to emerge randomly or operate independently from one another. They design compelling cross-touchpoint experiences that are meaningful to their customers and add value to the brand, like “Click and Collect” for a retailer or mobile-driven online check-in for an airline.
Are customer-obsessed. Agile commerce means putting the customer at the heart of every decision, bringing quantitative and qualitative customer insight to every decision, and even reorganizing around the customer life cycle to focus teams on what the customer needs, not what the channel thinks.
Enable with technology. Agility demands some key underpinning enterprise technology components, such as a commerce platform that can serve the Web, mobile, and stores. But it also requires that touchpoints are unshackled from back-end systems by a common set of commerce APIs.
The rapid adoption of smartphones and mobile Internet usage is changing the way US consumers shop. Although still nascent, mobile commerce is poised for exponential growth. Mobile retail and travel spending grew by 80% in 2011 and is expected to more than double by the end of this year.
There are various definitions of mobile commerce that include retail, travel, advertising, proximity payments (coming soon), and appdownloads, but Forrester combines retail and travel research with an understanding of mobile consumer habits to build its mobile commerce forecast. Shop.org and Forrester Research administer The State of Retailing Online survey annually to online retailers to understand key metrics in shopping trends; this year's survey focused on mobile commerce and mobile retail execution. Having data from both the consumer and merchant perspectives provides us with a richer understanding of the mobile commerce platform and buying behavior.
Mobile commerce is taking off in Europe. Retail and travel spend via a mobile phone increased by 70% in 2011. Impulse-buying categories that require little intensive research — such as books, computer software and video games, music, videos and DVDs, and event tickets — are driving a large part of these mobile retail sales. Understanding mobile buying behaviors, the evolution of mobile buyers, and relative mobile spend across Germany, the UK, France, Spain, Italy, the Netherlands, and Sweden are the focus of the Forrester Research Mobile Commerce Forecast, 2012 To 2017 (EU-7), >, and report which has just been published.
The forecast combines insights from the Forrester Research Online Retail Forecast, 2011 To 2016 (Western Europe) with an understanding of smartphone adoption rates and how online buyer sophistication differs from mobile buyer sophistication for each EU-7 country. Smartphone owners are more predisposed to become mobile retail buyers if they have already bought online or if they have already bought mobile apps and digital content. By 2017, mobile retail, travel, and daily deal spend in the EU-7 will rise to €19.2 billion, which will represent 6.8% of online spend. Mobile’s share of total travel spend will be much higher than that seen in retail, as more than 35% of travel bookings for leisure and unmanaged business travel were made online in the EU-7 in 2011.
Consumers are now in control, especially when it comes time to buy. Ubiquitous connectivity allows consumers to easily check prices and buy on the go, which should worry (not terrify) traditional retailers in competitive categories. This “showrooming effect,” which has been encouraged by Amazon, would enable web retailers to snatch some sales from the hands of their brick-and-mortar competition. A majority of sales are still happening offline, so the fear of showrooming — that most people are finding screaming deals online — is largely exaggerated. In fact, the majority of transactions still happen in stores, even when shoppers research online (yes, even when they’ve got their mobile devices in hand in a store). Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016, which launches today makes it clear just how influential and critical the web channel will be to eBusiness professionals in retail. By 2016 Forrester predicts that more than half of the dollars spent in US retail will be influenced by the Web. Already in 2011, $1.3 billion dollars in the US fall into this category.
It is imperative for eBusiness professionals in retail to adopt cross-channel best practices, including:
Pricing more consistently to reduce vulnerability to showrooming. The ability of shoppers to comparison-price shop and demand price matches requires retailers (and manufacturers) to reduce price discrepancies across all channels. With comparable pricing in place, this forecast suggests that many consumers may in fact nonetheless choose to purchase products in stores because of the immediate availability, service levels, or simply because products online do not have significant benefit over those in stores.
To conduct our global eBusiness research at Forrester, we rely heavily on support from our multilingual group of Research Associates and Researchers. Recently, one of our Research Associates, Lily Varon — whose family originates from Peru — spent two weeks in the country and emailed us with her take on the state of eCommerce. Given that an increasing number of our clients are eyeing the online retail markets of Latin America, I thought it would be interesting to hear Lily’s observations of what’s happening in the region’s sixth-largest economy.
“Here are a few high-level findings from my travels:
Consumer adoption of online shopping in Peru remains low. The lack of online shopping is largely due to the fact that it’s just not customary, but also due slightly to the fear of putting personal financial information on the web. Retailers are encouraging consumers to overcome these barriers by prominently displaying payment and security information on the website, as well as educational information such as FAQs, step-by-step shopping, and payment instructions or YouTube videos explaining the shopping and checkout processes.
I was thrilled to be back in São Paulo last week visiting with different companies in the eCommerce space. I met with over a half dozen online retailers, as well as other players in the industry including payment providers and market entry specialists. It was also great to have the opportunity to speak at Rakuten’s event on April 24th announcing their official launch in the country.
Below are a handful of takeaways from the trip:
Online momentum is building in categories such as apparel and beauty. In markets like the US and the UK, apparel represents a significant percentage of total online sales. In Brazil, by contrast, this category is just starting to take off, with online sales currently representing a very small percentage of the total market. As issues such as inconsistent sizing are increasingly addressed, however, and new entrants boost the market, the online apparel sector is set to grow substantially. Likewise, there’s much talk of growing beauty sales in Brazil (the country is set to surpass Japan to become the world’s second largest beauty market) – as with apparel, online beauty sales are a tiny fraction of the total today, suggesting substantial growth opportunities going forward.
Here at Forrester we have been talking about the concept of "agile commerce" for some time now, but it's not always easy to point to live examples of “agile”businesses. What is agile commerce? How do I become agile? Both are very valid questions that we are in the process of building out a series of research documents and case studies in order to answer.
But there is a live example happening right now that encapsulates what agile is all about for me.
For those of you who are yet to become completely addicted to Pinterest (and you will), it's basically an image sharing site that allows you to group together images from around the web into categories and pin them to a virtual pin board. It creates highly visual mood boards, wish lists, galleries, and collections of images that link back through to the original source (which is where Pinterest makes its money). And since so many Pinterest boards are all about style — fashion and home in particular — it has the potential to be a bit of a retail gold mine.
In a keyword-driven Web world, brand manufacturers get more than their fair share of Web shopping traffic. But because most manufacturers maintain a relatively small direct-to-consumer business, they largely rely on online retail partners to convert leads that originate on their websites. Disintermediated from the final sale, manufacturers often know little about how to optimize the lead referral process that begins on their own websites.
To gain some valuable insight into how manufacturers can help optimize sales conversions downstream, Forrester teamed up with Channel Intelligence, a company that tracks the purchase path of leads from manufacturers’ websites to online retailers’ websites. Forrester and Channel Intelligence analyzed over 44 million clicks across 150 manufacturer websites spanning two full years of closed-loop sales data (2010-2011). In our new report, “Top Three Ways Manufacturers Can Drive Higher Conversion Rates Through the Online Retail Channel,” we identify clear best practices from the clickstream analysis. A sample of key findings:
Be direct and aggressive with “Buy” button language and placement. For example, manufacturers that put the word “buy” first on a purchase button see 53% higher average conversion rates downstream at online retail websites than those that display the word “buy” as the second or third word (e.g. Where To Buy).
Be maximally transparent on price. Manufacturers that display both MSRP and actual retail prices experience a 111% higher conversion rate downstream on online retail websites than those manufacturers that show an MSRP but no actual online retail prices.