Voice of the Industry

Payments and the technology adoption lag

Monday 7 October 2019 10:42 CET | Editor: Melisande Mual | Voice of the industry

Andy Mulcahy, Strategy and Insight Director at IMRG, discusses lag in technology in retail: ‘The urgency of new technology often gets overstated before people are ready to respond to it’

Technology, perhaps more than any other concept, has the capacity to both excite and frighten us in equal measure. It often brings promises of making our lives smarter, safer, more convenient; enhanced to an extent whereby we look back and wonder how we ever survived without it.

But it’s also a concept that provokes anxiety, as some of the changes it introduces can seem little short of magic. On the one hand, there’s the disbelief – the simple lack of understanding that what it enables can be possible – and then there’s the other side; FOMO (fear of missing out).

FOMO can be very powerful from the business perspective as the technology vendors mobilise it as a sales technique, claiming that shoppers are screaming out for all the benefits their solutions promise. ‘If you build it, they will come’ might be the mantra.

Yet offering a technology solution, and people actually using it are two very different things. It’s easy to get swept up in the buzz around new technologies, but a healthy scepticism is always advisable when it comes to such matters.

Are we ready?

Where and how we complete payments is a classic example of this. With all the convenient, quick, digital transfers we’re able to make now, particularly through our smartphones, you’d be forgiven for assuming that’s how we all do it. But how many of us still receive cheques in birthday cards? From people who have smartphone devices in their pockets when signing them?

We are creatures of habit, and those habits can change slowly. It can also be difficult to predict when the inflection point for adoption is dawning. Take Klarna; the ‘buy now, pay later’ solution is nothing new, there have been multiple attempts at bringing something similar to market over the past decade or so. For whatever reason, it seems that shoppers are ready for this kind of option now, and it seems to be gaining traction in the UK.

By contrast, voice assistants appear to be at the bottom of the adoption mound at the moment. Despite the much-quoted, little-researched quote ‘half of web traffic will come through voice by 2020,’ earlier in 2019 a leaked email from Amazon revealed that just 2% of users had bought something through their Echo device. It may be touted as the ‘voice revolution,’ but perhaps ‘gradual voice transition’ would be more accurate.

The smartphone takeover

Another promise made by marketers was that we would manage our entire lives through smartphones. While it’s certainly true that it’s possible to undertake almost any activity using these devices, it took time for it to become genuinely prominent in retail.

Consider the difference between two devices. The iPad came out in 2010; by 2013, 25% of online sales were being completed through mobile devices (which is smartphones and tablets combined, but it was overwhelmingly tablets back then). The original iPhone came out in 2007. It took until the second half of 2015 for sales growth to really kick in so that the devices accounted for a significant share of online sales.

The fact is that, while the hardware was in place, it took a while for retail sites to be properly optimised for the devices and for confidence in using them to catch up. When it comes to in-store technology, sometimes a device (giant tablet etc) is installed with the expectation that lots of people will use them but they sit there gathering dust. Perhaps they will become a major factor in retail one day, or perhaps the smartphones we all carry are powerful enough to do whatever it can offer anyway.

Where next for payments?

Obviously, one answer is blockchain. The problem is that most people have no idea what it actually is or how it works, no matter how many times they read about it. Solutions will be developed using the technology, but confidence in using anything promoted overtly as being ‘blockchain’ may take a while to get traction amongst a confused public.

Social selling is another area of hype. For a long-time now, businesses have tried to work out how to use social platforms, with their enormous audiences, for overt commercial opportunities. This was a failure initially (remember Facebook Stores?), but paid advertising has been found to be effective for some. The current thinking relates to buying buttons directly within platforms, with the expectation that this is where behaviour will gravitate – particularly among younger demographics.

However, it may be that the role of social in the selling process has been exaggerated. A survey of 10,000 respondents by Shift found that 68% thought social media engagement from a brand is not important.

Nor is that the only study I’ve seen recently that came to a similar conclusion. A point worthy of consideration, given that some are lauding the need to communicate with shoppers through WhatsApp over more traditional means (email, telephone etc).

So where should you invest?

The purpose of this article has been to state that the urgency of new technology often gets overstated before people are ready to respond to it. Not necessarily in a misleading way; things can sometimes seem ready to gain wide-ranging traction, but then people just stick to the old ways of doing things that they understand.

Let’s be clear – most of the technologies mentioned here (voice, social selling etc) probably have a big role to play in the future. But technology is never urgent until its use-case becomes clear, and people start to understand how to apply it in ways that make their lives more convenient. Until that point, it’s just hype.

The editorial was first published in The Payment Methods Report 2019, which provides insights into the payment methods landscape, depicting the key trends and developments in the way people pay.

About Andy Mulcahy

vspace=4Andy has worked at the heart of the online retail industry since 2010 – researching and producing reports on trends and developments affecting the sector. During that time, Andy has developed strong knowledge in multiple areas, with particular expertise in Black Friday.


About IMRG

vspace=4IMRG is the UK’s online retail association – a membership community offering neutral and unique resources for online retailers. We help our members understand and improve their online retail performance through a busy programme of performance benchmarking, data analysis, insight, best practice-sharing, and events.

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Keywords: Andy Mulcahy, IMRG, expert opinion, payments, technology, retail, blockchain, UK
Countries: World