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In 2015, payments took a giant leap and became easier than ever. Consumers can now swipe, dip, click, tap or “do nothing” (per Uber) to authorize payment.
As the act of paying evolves to the background, innovation will focus on driving commerce for merchants and consumers, rather than just payments. Here are three commerce trends to watch next year:
1. More wallets
At the beginning of 2015, Apple Pay stood as one of the only mobile wallet options available. Now, as we close in on 2016, Android Pay, Samsung Pay, Chase Pay, and CurrentC have all emerged. Not to mention Walmart following in Starbucks’ steps by creating a propriety in-store mobile payment option.
Despite some challenges and mixed consumer adoption (62 percent of consumers are aware that they can use their phones as a payment device, but only 19 percent reported having done so in the last six months), wallets continue to emerge as way to create customer engagement.
Many look to Starbucks as a leader. Launched in 2009, its payment app quickly grew from a prototype to accounting for 21 percent of transactions (Oct 2015) in their stores. The company anticipates continued growth as they combine loyalty, frictionless payments, and rewards into a single experience.
With PayPal’s acquisition of Paydiant, and reports of Target’s mobile wallet surfacing, expect more retailers to launch their own wallets in the coming year.
2. Commerce comes to messaging
WeChat is the global leader in enabling commerce inside its messaging platform. Today, 600 million users can do everything from ordering a coffee, to paying for a movie ticket, to hailing a ride home inside the app. Since advertising isn’t a big push for WeChat, relying instead on payments, it requires merchants to interact with consumers on personalized, conversational terms, completely changing the traditional business to consumer relationship.
While other apps offer payment options, such as Kakao Pay in South Korea, and Line in Japan, it appears that Facebook is taking the biggest strides to become the next facilitator of commerce with Messenger. With 700 million monthly users globally, Messenger allows customers to stay in touch with retailers, enabling them to get tracking information or to update or change their order.
Messenger recently announced that users can now even hail an Uber through the platform. Riders will be able to see where their drivers are and, by leveraging the customer service chat, Uber will be able to communicate updates directly.
In a market where personalization and instant gratification are in high demand, we expect that conversational commerce, facilitated by messaging apps, will continue to grow in the next year, adding more services and features to create holistic commerce platforms.
3. Narrowing the online to offline gap
Online-to-Offline (O2O) commerce allows brick and mortar retailers to reach consumers where they spend most of their time — online. While ecommerce is growing rapidly, it still only accounts for 7 percent of total retail sales in the US. Retailers need to find measurable ways to reach customers as they browse online and encourage them to come into the store.
Founded in 2008, Groupon drove O2O by creating an online marketplace where consumers bought something online, and redeemed it offline. Today, the likes of Uber, Airbnb and OpenTable are all examples of online-to-offline companies, allowing consumers to purchase goods or reserve services through their smartphone or computer, and access it in the real world.
Online-to-Offline drives foot traffic with services like in-store pickup, coupons, and incentivized offers. For example, through TrialPay’s offer platform, a consumer playing a mobile game can receive promotions that offer free credit — coins, power-ups, premium content, etc. — if they spend at a nearby retail store, or eat at a certain restaurant. This creates an incentive to actually go somewhere, which is how O2O drives in-store purchases and tracks the promotion back to a specific user.
As we spend an increasing amount of our time online, or on our smartphones, online-to-offline commerce will continue to grow as an effective way to drive customer acquisition and revenue.
Consumers are becoming more tech savvy, while demanding personalized and engaging experiences from brands. In order to drive commerce more effectively, retailers and payment companies will need to find new and innovative ways to interact with their customers.
Amy Goddard is senior marketing manager at TrialPay.
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