Getting Mobile and Millennials Right is All About Tapping vs. Typing
If RIS headlines are any indicator, millennials and mobile are top of mind for today’s retailers.
And with good reason. According to Adobe’s 2016 Digital Insights Mobile Retail report, smartphone traffic to retail sites grew 33% YoY in 2016—a jump that officially makes mobile the #1 browsing platform, surpassing desktop for the first time.
And as you might expect, this trend is strongest amongst millennials: a recent Alliance Data study found that 63% of millennials browse on their smartphones every single day.
But while plenty of retailers have seen their mobile traffic skyrocket as shopping on-the-go becomes the norm, few have seen a comparable boost in mobile sales.
The problem? Browsing and buying on mobile are two different animals. The same study found that while 63% of 18 to 34 year-olds browse on their phones, only 39% end up purchasing on their phones.
With McKinsey forecasting that 18 to 25 year-olds will soon comprise 1/3 of all retail spending, it is essential that retailers adapt to changing shopping preferences—or risk losing customers in an increasingly competitive online retail space.
Adapting to mobile-first
GOAT is a great example of an e-tailer forging new paths to adapt to today’s e-commerce landscape. An online marketplace for browsing and buying collectible kicks (a.k.a. sneakers), GOAT appeals directly to a millennial customer base. And unlike most retailers, the overwhelming majority of GOAT’s sales come through mobile.
So, what’s their secret?
It’s not free shipping, or even special discounts and coupons. While these types of promotions are effective—Opera Media found that they can convert up to 73% of window shopping millennials into buyers—they’re not the critical success factors on mobile.
GOAT has taken a values-based, customer-first approach to their business, which translates into a superlative mobile experience across the board.
GOAT’s No.1 value is trust. To protect buyers and sellers, every shoe sold on GOAT goes through a meticulous verification process by a team of specialists who inspect everything from stitching and logo, to texture and color. This means never having to pull out your desktop to conduct supplemental research before buying.
No.2 is service. To ensure the simplest return process, customers can send back any falsely advertised item directly to GOAT, without ever having to deal with the seller—further incentivizing a direct mobile purchase.
And No.3—perhaps the greatest driver of GOAT’s mobile success—is speed. To shave every second possible off the purchase process, GOAT has optimized for tapping vs. typing. This begins when you navigate to their site or open their app, and is consistent all the way to payments at the point of checkout.
Addressing the final conversion hurdle
While discovery on mobile was once considered tricky, today’s retailers are addressing this barrier with relative ease: by incorporating drop-down windows that easily present options for sizes, colors, makes, and models, a customer can tap their way to their desired product within seconds.
But it’s not enough to optimize discovery for mobile. In order to actually boost mobile conversion, it’s critical that retailers reduce friction in that final conversion hurdle: payments.
Using a smartphone to fill out a credit application for a private-label credit card can feel like a form of torture – even for phone-facile millennials. Typing out a credit card number, mailing address, expiration date, etc. can be laborious and frustrating on a smartphone’s on-screen keyboard.
For shoppers willing to trust stores with their card data, the friction factor can be reduced. The hitch is that millennials aren’t big fans of credit cards. Recent Federal Reserve data found that the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989.
PayPal can solve that problem for a specific subset of shoppers. But Sen Sugano, GOAT’s VP of Marketing, says his customer base needs options to help ease the burden a major purchase can have on their budgets—especially given his customers’ passion for sneakers.
Pay-over-time financing: an unexpected solution
Sugano’s solution was to offer his shoppers pay-over-time financing that features a form factor, tuned to mobile experience. First-time users enter five pieces of top-of-mind information on one screen. For repeat users, it's little more than a tap to get loan approval, pick the items they want to buy, and they’re done.
But perhaps of even greater value is that financing allows Sugano to influence shopping intent with as-low-as messaging throughout the browsing journey. When customers see they can responsibly pay in monthly installments for a pair of Pharrell x NMD ‘Human Race’—and afford them today, rather than saving up to maybe buy later—they’re more likely to checkout.
By partnering with Affirm — which allows customers to pay for purchases in monthly installments, without charging unnecessary fees or compounding interest — GOAT has seen a higher degree of engagement and far stickier customers. The proof is in the numbers: in 2016, the average order value of GOAT purchases made with Affirm was 107% higher than non-Affirm purchases. Moreover, 50% of all Affirm purchases in 2016 were from repeat customers.
Offering customers a responsible way to pay yields a stronger propensity to buy, an ability to make larger purchases, and a compelling reason to come back often.
As millennials continue to default to mobile shopping, the entire landscape of products and pricing lays at their fingertips. It is more important than ever for retailers to offer a smooth and speedy mobile experience —and to provide options for those customers whose needs are unmet by traditional credit products.
Len Eschweiler is senior vice president of retail at Affirm, Inc. www.affirm.com