Leveraging mobile payment to improve customer experience

Leveraging mobile payment to improve customer experience

Source: RetailinAsia
The retail mobile landscape is highly dynamic in terms of the technology advancement as well as customer’s expectations. IDC Retail Insight’s annual predictions have a three-year perspective, and we are seeing that our predictions are in fact unfolding in the retail industry. In IDC FutureScape: Worldwide Retail 2017 Predictions — APEJ (2017 and 2020), we have predicted that the retail mobile technology investment will double in 2018 and one of the top priority for Asian retailers will be improving the mobile-enabled experience in physical locations. India, China, Indonesia, Singapore and Hong Kong, will lead the retail mobile investment, driven by multiple device ownership in those markets. As payments sit at the very core of this digital transformation, it will have a significant impact on the strength of the customer relationship.

The retail industry is among the most innovative in the world and investing in retail mobile platform to attract, retain and proactively support customer through providing information to consumers at each stage of the shopping journey. However, the biggest impact of the retail mobile platform isn’t direct sales generated through the smartphones, but rather the influence they exert over traditional in-store sales to drive in-store conversion and in-store average order size. As shoppers become increasingly connected in tandem with the growth of mobile devices, the retail industry is expected to lead the world in mobile payment transactions. This leadership in terms of both volume and value of the transactions driven by both a large number of regional mobile payment players and a rapidly diversifying and evolving mobile influence.

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Electronic wallets (ewallets) are predicted to be the fastest-growing and most important form of online payment in the years to come. Low credit and debit card penetration overall and rising levels of eCommerce, as well as other online services, dictate the need for ewallet services to use. The explosive growth of mCommerce has seen many payment vendors, and payment gateways attempt to offer unmatched experiences in payment simplicity. Technology within smartphones and new laptop computers, such as fingerprint readers and facial recognition, make the transactions quicker and painless for consumers. This new features satisfies both the customers’ expectations and the security requirements for identification.

IDC projects that mobile payments will account for more than US$1 trillion in value in 2017. The big chunk of mobile payments today come from remote payments, typically related to mCommerce transactions. However, proximity payments are growing rapidly. This is primarily due to the growth of NFC-based contactless payments, enabled by rising smartphone adoption and the increasing availability of POS terminals. However, IDC believes that the majority of emerging Asian markets are unlikely to adopt NFC-based mPayment services shortly because of the overall lower penetration of NFC-enabled smartphones and respective POS devices at the merchant side.

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The mobile payment technology landscape continues to evolve, and new technologies are emerging worldwide. Understanding the benefits and cost of adopting each technology enables retailers to make a better decision that can ultimately meet customer expectations and increase their revenue. Besides, retailers need to understand the maturity level of each technology and deployment cost. As payment technology becomes more affordable and available, the key factor for mobile payment adoption is the business model and transaction charges. The integration of mobile payment enables retailers to understand the customer’s transaction behaviour and spending pattern. By utilising the transaction data, retailers can link the customer’s spending behaviour to their loyalty card. With this information, customer’s engagement can further be personalised via the mobile app, offering the right products at the right time. Additionally, mobile payment motivates the customer to use discount coupons and other promotional offers. Those retailers that succeed at this have the best chance to spread across the region and dominate.

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