Shifts for 2020:
Mobile Service Economy
Check out Facebook IQ's take on shopping in tomorrow's mobile-first world.
CONTENTS
By 2020, it’s predicted that over half the connected world will be making purchases online.1 Mobile is estimated to make up 34% of retail ecommerce in Brazil, 45% in the UK, 47% in the US, 63% in South Korea and an incredible 80% in India.1
And while people will still shop in stores, tomorrow’s mobile momentum is already very palpable.
In fact, last Holiday season, Facebook saw mobile conversions grow to make up 53% of total online conversions globally—eclipsing computers as the device of choice.2
While it seems inevitable that mobile will grow as a point of purchase, mobile's most profound impact may well be how it is transforming the rest of the path to purchase—and shoppers’ expectations.
Shifting expectations unlock new opportunities. And to help you discover growth and secure relevance in a fast-changing world, Facebook IQ has launched the new “Shifts for 2020” series. In this third installment, explore five shifts shaping how people will shop tomorrow.
1. Convergent commerce
People’s paths to purchase are more complex than ever. But there is also a unifying force across those journeys—people’s phones. And as the world spends more and more time with mobile devices, mobile will continue to grow as the place where discovery, consideration and purchase can all take place. And this convergence enables something remarkable: Shoppers will use mobile to condense—and even completely collapse—their journeys into a single, serendipitous moment in time. In fact, many already are.
People shop faster on mobile
Looking at the time between ad exposure and conversion, mobile-to-mobile conversions are 13% faster than computer-to-computer ones for US retail/ecommerce shoppers.2
In one study, participants even browsed five fewer products when shopping on mobile.3
And US travelers spend 75% less time when booking on mobile than on desktop.4
Shortcuts make shopping even speedier
Nearly 1 in 4 US people surveyed say they use express (1-click) checkout on their phone.4
And shoppers will increasingly find their need for speed met by mobile ads and content that allow people to discover—and purchase—new brands and products at the same time, in the same place. Many consumers will be able to experience their “journeys” as mere moments.
“
Ads are becoming targeted storefronts. Ads, content, products, transactions ... the lines are blurring. The content is becoming the store. The ad is becoming the transaction.
Mary Meeker
Kleiner Perkins Caufield Byers, June 2017
2. Invisible differentiators
We've all experienced the power of visuals—such as video—to inspire desire. But when it comes to where people will spend their money in our mobile future, equally important is the power of all that we cannot see—the hidden patterns behind people’s mobile experiences.
In a world where convenience has been redefined by one-click buying and on-demand everything, people will not only pay for ease—many will base their buying decisions on it. Good experiences will be “invisible,” and bad ones will drive people to abandon cart.
Mobile shoppers want more
Faster browsing
More than 1 in 3 US shoppers surveyed would like to shop on their smartphone more. But 1 in 2 says poor navigation or slow load times are a barrier.5
And 40% of mobile website visitors abandon a site at 3 seconds of delay.6
Smoother journeys
Among Frequent Mobile Shoppers surveyed in the US, 90% say a smooth checkout experience would motivate them to buy again with the same provider.7
Mobile payments
In-store or on an m-site:
Globally, more than 1 in 3 online shoppers surveyed uses mobile payments.8
Among people surveyed in 14 markets, 63% say being able to make payments matters when choosing a messaging app.9
3. Very personal assistance
With so many of our interactions, reactions and transactions happening in the palm of our hand, our mobile devices may be our most personal space of all. The fact that 75% of US smartphone users say they customize which apps appear on their home screen shines a light on people's intimate relationships with their phones.10 And in this new “personal space,” people will expect the right content, products and experiences to serendipitously find them.
Among travelers surveyed in the US, nearly1 in 2agree that personalized ads save them time and effort.4
Among North Americans surveyed, more than3 in 4have chosen, recommended or paid more for a brand that provides a personalized service or experience.11
Among people surveyed in North America and Europe, nearly 1 in 2said they would stop doing business with a brand that repeatedly delivers a poor, impersonal or frustrating experience.12
And people surveyed say they’d share their shopping preferences with stores to get tailored offers13
Nigeria61%
US39%
UK37%
South Korea29%
4. Messaging means m-commerce
By 2020, 80% of smartphone users are projected to be using a mobile messaging app.14 But we can see people using messaging apps to pave new paths to purchase today. Customer service is just the tip of the iceberg when it comes to messaging apps—which are already demonstrating their ability to serve as one-stop shops and m-commerce machines. And given that nearly 1 in 2 people surveyed in the US said they wish they could combine all their apps into one, there could certainly be appetite for conversational commerce to take on many of the tasks currently served by a multitude of other apps.15
Messaging moves commerce
Among people surveyed who message businesses:16
53% say they're more likely to shop with a business they can message.
And 67% plan to message businesses even more over the next two years.
Messenger means business
Each month on Messenger, people exchange over 2B messages (both automated and people-initiated) with over 20M businesses.17
Messaging from research to purchase
Many people who message businesses say messaging is their preferred way to engage when:16
Making a purchase 33%
Asking about store hours, location or inventory 33%
Making an appointment 34%
Providing feedback 30%
5. Loyalty lock-in
Love is a battlefield—and this will be increasingly true when it comes to brand love in an era where people have seemingly infinite choice and tools ranging from price aggregators to coupon-seeking browser plugins. Old-fashioned brand love is not dead—in fact, we recently found that 37% of US people surveyed identified as brand loyal repeat purchasers.18
But people's wallets are opening to loyalty of a different kind. If convenience is king, then loyalty will be powered by the seamlessness of subscription and automation. In some cases, this will mean that people will be able to replenish products so easily (or automatically) that the “consideration” stage could actually be removed from the consumer journey altogether.
Subscribing to a new kind of loyalty
While people may be abandoning old subscription models, many are eagerly adopting new ones—from snacks to shaving supplies, and of course, two-day shipping. And many of these are brands that have elevated products into services, thrusting us from a transaction-based economy into a subscription-based one.
US consumers surveyed already subscribe to a wide range of services, including:19
People are eager to embrace automation
The appeal of subscription services will only grow as artificial intelligence (AI) enables providers to learn people’s tastes and deliver even more personalized, relevant and delightful services.
63%
of people surveyed across Nigeria, South Korea, the UK and US expect AI to free up their time by taking care of day-to-day tasks.13
44%
are even interested in taking a pill-size sensor that transmits health information to a phone or computer.13
2.9x
year-over-year growth has been reported for conversations on Facebook in the US around deep learning (a type of AI).20
Marketer shifts
The difference between businesses that will fall to the wayside and those that will thrive in 2020 and beyond will be their ability to adapt, elevate products into services and harness measurement to fuel growth. Consider these thought-starters as you prepare for future success:
Capitalize on the collapsing funnel:
With shoppers seeking shorter journeys and marketers needing to accelerate conversions, the move towards a condensed path to purchase is a true win-win. Look to remove friction from your consumers’ journeys. Transform three steps into one-click checkout, unlock the power of messaging apps to help streamline consumers’ journeys, place “Buy” buttons where people might expect to find them and reimagine your ads as “targeted storefronts.”
Subscribe to a new model of loyalty:
Given that members of subscription ecommerce sites tend to spend significantly more than non-members,21 the advantages of subscription services seem clear for both consumers and retailers. Consider where your business may be able to benefit from (and provide benefits to consumers) when it comes to the possibilities of subscriptions. But don't rest on your laurels. As new subscription businesses continue to pop up, you will want to stay in constant contact with your subscribers to keep them inspired by and connected to your brand.
Measure more to grow more:
With consumer attention more and more challenging to capture and the path to purchase spanning too many devices and touchpoints for cookies alone to be perfectly accurate, people-based measurement can help provide a more complete view of your customers. Measure actions taken online and offline, measure across channels and measure growth from impression to conversion—to make your media spend work harder and smarter, today and tomorrow.
