4 things every retailer needs to know about mobile

The rapid changes in the digital and mobile world are radically affecting consumer behavior, disrupting traditional means of retailer/consumer interaction and influencing buying behavior and payment options in an unprecendented way.

Capitalizing on these technological innovations means keeping a close eye on the ways in which innovations in technology are turning the retail world upside down. There is no better way to do this than attend Mobile World Congress.

The mega-event held in March draws 90,000 attendees to Barcelona, Spain who are eager to discover and hear from some of the world’s top innovators and thought leaders in digital media, technology and mobile, including Facebook Founder Mark Zuckerberg. Retailers should care about who attends and what happens at Mobile World Congress because changes and innovations in technology are quickly affecting the retail landscape globally and will have a far-reaching impact on consumer behavior and the way brands and retailers engage their customers. There was an abundance of information shared at the event, but three things that stood out with significant implications for the retail industry were as follows:

1. The changing digital landscape is redefining ‘content’

While traditional software and device companies alike are vying for the eye and consumption dollar of the cutting-edge consumer, the question on everyone’s mind is that of content. With technology capabilities increasing exponentially and the application of tech across product platforms exploding, prevailing thought leadership is focused on how to change content to accommodate a rapidly evolving consumer. In his keynote speech, Facebook founder and CEO Mark Zuckerberg discussed his vision of getting the Internet into underserved parts of the world through Internet.org, a collaborative initiative between Facebook, major mobile companies and governments. Internet.org’s purpose is to connect people, empower businesses in new regions, and connect governments and individuals in order to build the Internet worldwide. Large corporations are using Facebook to ease barrier of entry for new Internet users, and investing time and resources in developing a population that was previously outside the reach of merchandisers.

These firms are focusing on the value of data that can be procured from these new Internet users, apps’ ability to drive data and the usage of that data as the future of business. One of Internet.org’s partners, Mario Zanotti, Senior EVP of Latin America for Millicom, spoke of the success of Internet.org’s quick adoption in Africa and South America, while Christian de Faria, CEO of Airtel Africa, referred to Facebook as “a good, easy access point…for introducing people” to the Internet. Jon Fredrik Baksaas, GSMA Chairman and CEO of Telenor, said the team had seen a 30% increase in Internet use in Paraguay, and a growing penetration of data in their customer base.

The launch of Internet.org in Colombia spurred a 50% increase in new data users in the first few weeks. And in Tanzania, sales of smartphones have increased by a factor of 10 since campaign launch. While there’s still a need for increased infrastructure development and for region-specific soutions for issues such as payment and delivery, the effects of putting Internet and mobile access into the hands of a new consumer database are significant for retailers, especially considering the rise of omnichannel and pure online retail sales.

2. Financial transactions and social interactions

Niklas Adalberth, co-founder of Klarna, discussed how mobile payment systems are reflecting a change in the consumer-purchasing ecosystem. In an effort to reduce conversion loss, Klarna has created a payment solution that separates the “buying” from the “paying” in the checkout process. With more than 50% of payment transactions from Klarna-affiliated companies coming from mobile e-commerce traffic, those companies need to ensure that consumers encounter as little friction as possible during the mobile payment process.

Klarna allows its soon-to-be customers to pay without registering for a mobile wallet or downloading an app. At the checkout page of a retailer’s website, the customer simply enters his or her e-mail, zip code and top-line data such as first and last name, and then Klarna populates the rest of the form, even if it’s the customer’s first visit to that site. The customer is given a “Buy now” button, and the order is done. No banking or credit card information is exchanged. The order is instantly placed, and fulfillment is immediate.

Klarna assumes all risk to the retailer and gives the customer 14 days to settle payment with Klarna. In return, the merchant gives Klarna a onetime percentage fee for the purchased items. Klarna is able to do this by employing 80 analysts and 400 engineers to run an extremely sophisticated algorithm for assessing risk in real time and providing a real-time payment option for the customer. For high-risk customers, Klarna provides a prepay option. What Klarna appears to be solving is the very real problem of conversion rates. The normal conversion rate for shoppers using desktops is between 2% and 4%, but that drops down to 0.2% to 0.4% on mobile devices. Klarna’s conversion rate on mobile is an astounding 4%—the same as the top average percentage on desktop—and it boasts an even higher conversion rate on desktop.

3. Keys to the connected lifestyle

The idea of a connected lifestyle has garnered a lot of buzz across industries. But what exactly does that mean to product developers, brands, retailers and consumers? One major component of the connected lifestyle is advancements in automotives and the increasing popularity of electric cars. However, those cars still represent a relatively small percentage of the market, and the industry faces challenges, including the need for longer autonomy and battery life, a stronger infrastructure and more competitive pricing.

While we are a good 10 years away from driverless cars—according to Carlos Ghosn, chairman and CEO of Renault-Nissan Alliance—there are advances in autonomous driving we can expect over the next one to five years that will impact the way we commute, shop and “live” via our cars. With changes impacting new vehicles as early as 2016, all carmakers will be adopting autonomous solutions that resonate with their consumers and reduce human error.

Ghosn anticipates that by 2016, autonomous-driving components, such as automatic vehicle response during trafic jams, will have cleared regulatory requirements and start to be talked about. As early as 2018, new cars will be capable of further automation, including highway driving and lane changing. By 2020, autonomous city driving will be almost expected, and cars will be able to recognize and intelligently act upon objects they drive by or “see,” making decisions between contradictory options. In areas of the country where consumers’ relationship with their cars is both personal and dependent, how will this change in interaction affect what they want to do in their car