I’ve witnessed this type of trend over and over again: More people do more things with their mobile devices – reading, accessing websites, and buying products – and what you see is just the beginning: Online retailing is forecasted to top $32 billion by 2020, and is poised to render brick-and-mortar stores obsolete – or at least many will go out of business.
Here’s one of the most recent signs of time: According to TechCrunch, 60 percent of Amazon’s 2014 holiday sales was done via mobile devices.
Due to the trends, it is important for brick-and-mortar businesses to take on the mobile market – as well as the online market – if they want to stay competitive.
To discuss this trend, we have a great opportunity to connect with Shawn Budde, the CEO of 2Checkout, one of the leading online payment processing.
Here’s our Q&A:
Ivan Widjaya (Q): Shawn, can you please tell us a bit about you and your role at 2Checkout?
Shawn Budde (A): First, a little more background on 2Checkout. We’re a technology company that takes the pain out of payments for online businesses so they can focus on growth. Operating in nearly every country in the world, we make it easy to accept payments from anyone, anywhere, using any device.
Our technology enables businesses to start accepting payments without writing any code but gives them the opportunity to use our advanced API for a more customized checkout experience.
I joined 2Checkout last year to help accelerate the growth of the company by investing more in the development of our payment platform and growing awareness of the company in the market. I’ve been fortunate to have led both startups and Fortune 500 companies. Prior to 2Checkout, I co-founded ZestFinance with ex-Google CIO Douglas Merrill. I was also the Chief Customer Officer for Capital One. At both companies, I really enjoyed bringing a big data and machine-learning approach to the financial services industry. Alike, I used an agile approach to management at both companies. For instance, at Capital One I led process improvements in our direct mail operations group that took getting a mail piece out from 16 weeks to less than a month. What excited me about 2Checkout was the opportunity to apply some of these same approaches that have been successful in the past to help drive growth for the future.
I’ve recently brought on talent to our management team from Braintree, Groupon Payments and Abercrombie Payments to help us with our key objectives. We’ve gotten some great traction on both the product and business growth over the past six months as this team has come together. We are even more excited to see what the next six months has in store for us.
Q: More and more people are shopping via their mobile device. What does this mean to retailers?
A: According to a study by Flurry, mobile shopping sessions grew 174% over last year, more than any other category. We recommend retailers of every size look at their analytics to see how much traffic they are getting from mobile and begin planning their strategy, or they will risk losing share to what competitors do.
In many cases, retailers are shocked to see how large the percentage of total traffic it is! Interestingly, Kissmetrics published some data that shows that the majority of shoppers prefer to access a mobile website over a mobile application. This can be great news for small merchants who don’t necessarily have the resources to build out a mobile app because it levels the playing field with big box stores.
Q: Online retailing is here to stay – it’s only becoming bigger. What does it mean to retailers who don’t seem to understand that exploring online market is no longer a suggestion, but a must?
A: Similar to mobile, retailers must consider the online channel, as the trend clearly shows purchasing shifting more heavily from brick-and-mortar businesses to online shops.
While ~90% of e-commerce still happens offline, e-commerce is growing rapidly towards the future of selling. People are jumping towards online buying to stock up on their every essential like groceries and cleaning supplies because of the cost and convenience. E-commerce is growing fast at 9.5% per year and is expected to outpace brick-and-mortar sales growth over the next five years.
There are a number of driving forces here that explain this trend:
First, internet penetration continues to grow.
Second is e-commerce innovation. With companies creating new, exciting online and mobile shopping experiences, consumers are constantly met with new shopping experiences that bend how modern buying takes place- think the rise of marketplaces like Etsy or new discount retail experiences like Zulily or Gilt and how they are enticing consumers to buy.
Third is demographic shifts. With millennials and “Generation Z” coming of age during the online boom, they tend to spend a higher proportion of their income online than previous generations.
Q: Please share with us the plan 2Checkout has in responding to the mobile shopping trends.
A: Years ago, 2Checkout recognized the importance of mobile, so we developed a mobile optimized version of our hosted checkout. With its responsive design, retailers of any size can have a mobile-optimized checkout experience for their site without needing a mobile app. It only takes a few minutes to implement, and doesn’t require any coding. This responsive design to mobile drives a 45% increase in conversion over a standard checkout experience.
Q: Any advice to share with our readers who are in retailing business?
A: There are two things retailers of any size can do to optimize for mobile:
First is optimizing your brand for mobile search. This ensures that your business can be easily found by mobile shoppers.
Second is designing the web experience. From browsing, all the way to purchase and checkout, it should be simple, branded experience for your shoppers to find what they want and complete a purchase on a mobile device. Retailers should look for payment providers that deliver the tools to optimize the checkout experience for mobile, or they could miss out on easy sales.