With the rise of e-commerce, online shopping has grown exponentially. The convenience of shopping wherever you are is what attracts people to online shopping. You can now update your closet from the comfort of your own home. However, have you ever been in a car or a bus or running between meetings and superbalist or takealot has a flash sale? You are so close to getting those new sneakers you have been wanting at 50% off but then it comes to payment and it is almost impossible to fill out your details while on the move.
Well, there is a solution. A new emerging technology called touch commerce is on the rise.
What is touch commerce?
Touch commerce is a new technology which allows customers to make payments with a single touch of your fingerprint or a couple of touches of the screen. You can complete transactions using pre-populated data from third-party authenticators.
Touch commerce enables a customer to make a secure first-time or subsequent payment on any merchant’s website or app without having to provide registration or log-in details. Authorizing the transaction simply requires the application of a fingerprint or two touches of a screen.
How does touch commerce work?
There are two different ways touch commerce works. Both of with make use of third-party touch-based mobile payment services.
- Operating System
In this option, shopping applications can use existing information which is stored with the Operating system. This information will include payment card details, home addresses and contact numbers. Since this is connected to your operating system, this payment option is normally authenticated by fingerprint enabling software that is used within the app. Having homes address information shipping is by default shipped to the registered home addresses detailed in the operating system.
2. Payment Service Providers
In this alternative option, touch-based payment services are linked to pre-existing payment service providers (like for example Paypal). Before making any purchase using touch commerce, customers need to have opened an account with the relative payment provider. Customers have to stay logged in to this provider in order to make future purchases using touch commerce. Once customers have done this, they will be able to simply select pay and confirm and the shopping application will receive their payment details through this third-party payment service.
Essentially, touch commerce allows customers to make secure payments on any online shopping application without having to go through the task of filling in pages of registration information and card details. Third-party mobile payment services act as authenticators and data providers allowing payments to be made within seconds at the touch of a button.
Deloitte Global estimates that payment time will be reduced from 103 seconds to a mere 17 seconds in future.
Access to touch commerce
In South Africa alone, there are approximately 28.99 million active mobile internet users (Statista, 2019). In Africa, there are approximately 250 million smartphone users. This expansive access to a smartphone is impacting the retail sector as more people have access to online shopping platforms.
“The rise of e-commerce has impacted retail space.”
As browsing has been made easier through online platforms, customer buying rates have increased. This has been a positive effect on e-commerce. However, statistics have shown that due to this ease of browsing, an estimated 80% of shoppers abandon their cart and do not make purchases.
Approximately only 9% of online shoppers, who browse shopping website/apps on a weekly basis, make a purchase. This could be the result of many things, however, it is argued that the hassle of filling in payment details deters customers.
To make a purchase on a mobile website or application may require the user to provide their name, address, email, phone number, delivery address, security details (like passwords and security ) followed by your personal payment details.
This requires you to have the card you are using to purchase your good to be at hand. The requests for all this information does not just take up lots of time, but when filling in this information on a mobile phone while on the move is almost impossible on touch screens. So what is happening is that customers are browsing, adding items to their cart, but not following through with the purchase. Ultimately this is resulting in a decrease in potential sales.
Effects on retail space
The following are predictable effects touch consumers will have of Africa retail space.
- Increase in checkout rates
As the convenience of payment becomes easier, people will be more inclined to shop online and conclude sales while on the move. This will result in a growing percentage of checkout and purchase rates.
- Increase Impulse buying
With touch commerce making payment easier and faster, people will have less time to ‘change their mind’. When there is a sale or discounted goods on offer people often purchase things without thinking too much into it just based on their belief that they are getting a bargain. This impulsive behaviour is heightened when payment is at the touch of a button. If it is easier to pay for something there is less time to think about whether or not you really need that thing. Ultimately, if there is an increase in impulsive buying touch consumers, online shopping website and applications will generate a higher income.
- Decreased community gathering and retail spaces
For almost half a century, shopping malls have functioned as a gathering point, a town square, for everything from shopping, movies and entertainment centres, food hubs, coffee meetup and even first dates. Digitisation of shopping in Africa is slowly killing this. As the convenience to shop online grows the shopping mall culture will decrease, losing this community gathering asset. Since touch commerce will inevitably make online shopping much more user-friendly and attractive to shoppers, this aspect of shopping culture will decline.
As touch commerce technology develops it will enable retailers with the opportunity to exploit shoppers increased use of browsing online mobile shopping applications/websites.
In effect, touch commerce provides a range of opportunities and challenges for the retail space. SovTech can create technical and functional solutions for enterprises with the new technology.
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