Buying online is not only on the increase, the way we buy is also changing. At a 700-strong breakfast yesterday morning, PayPal released the results of a recent study on the monumental changes seen in online commerce in Australia, where merchants and consumers are harnessing new technologies to connect in new ways.
The report, “Secure Insight: Changing the Way We Pay” was developed in conjunction with Forrester Research, Nielsen and the Australian Centre for Retail Studies and explores the factors influencing Australia’s boom in online commerce. Powering the growth in online commerce is the increasing prevalence of smartphones, with ownership of Internet-enabled phones currently at 65 per cent of the total handset market in Australia. Now accounting for two out of every three phones sold in Australia, smartphones are disrupting both the traditional and online retail environments. Australians are heavy users of mobile phones to transact, with PayPal Australia seeing mobile payments on a steep trajectory of 430 per cent year on year. (I got my iPhone 4S yesterday and am thrilled with it, by the way.) As transactions begin to take place in new environments, PayPal’s report reveals a changing attitude amongst consumers when it comes to making payments. According to the research, consumers feel the choice of payment method is not theirs to make, with retailers restricting choices. Regularly having to switch between payment methods depending on the product they are purchasing, 40 per cent of consumers desire a simpler payment solution.
Interesting Insights
Here are some of the insights and comments (from the many presenters and the panel) that I found interesting:
- QR codes make non-traditional venues (e.g., a bus shelter) places where you can now transact (just scan the code and go!)
- New platforms, e.g., daily deals sites, bring new opportunities to transact (both from a computer and via mobile).
- Generally, there are now MORE ways that people can buy – but merchants aren’t necessarily accommodating this change.
- A customer today is more aware of your product or service when they come to you than ever before. Generally, they have researched you, compared you to your competition and are ready to transact – if you make it easy for them,
- More than 10% of Paypal’s transactions are via mobile.
- The average expected growth rate, as reported by Aussie online retailers, is 30% in the next year (How fabulous!)
- Coupon businesses reduce the risk of purchase with low prices and money-back guarantees.
- Cudo CEO says coupon businesses address two needs: 1. Unsold capacity and 2. Customers want to try new things.
- Multi channels are used to research and decide on a purchase (We also post the process to social networks as we go.)
- When it comes to social media, larger companies are more likely to stick to traditional media, whereas (because of the low cost of entry), smaller businesses are more likely to use social to market.
- Understanding the barriers that customers need to overcome to transact can give you an advantage over competitors.
- 39% of consumers using their phones for product or services research.
- Cash is still king for most smaller purchases. New landscape sees people prefer fewer, more consolidated online payment options (for ease) – men mainly
- How are consumers deciding WHICH payment method to use? 1. Security 2. Price. Mobile payments PERCEIVED to be less secure by some.
- A hungry lean self-starter online retailer is probably doing better than high street retailers (due to being flexible and nimble).
The best question posed:
Are you making it easier for customers to do business with you? Or are consumers using tech to make it easier for themselves?
Also, “People on social media are a community of interest. Be relevant.” — Colin McLeod, Australian Centre for Retail Studies (ACRS)
What I took away:
Merchants: It’s time to recognise consumer needs have changed and to adapt accordingly. Here is a copy of the full report.
