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RETAIL MOBILE EXECUTIVE SUMMIT 2011 PayPal Mobile Confidential and Proprietary Laura Chambers Senior Director, Mobile Strategy PayPal, Inc. Strategic Insights to Mobilize Your Business 7/18/2015 2 Today’s Agenda 1. OUR VIEW ON THE WORLD – KEY TRENDS & INSIGHTS 2. WHO IS THE MOBILE SHOPPER? 3. PAYPAL MOBILE MOMENTUM 5 Consumers have a “store in their pocket” to use online, offline, or in-line PayPal Mobile Confidential and Proprietary 6 FOLLOW your Customers: enable them to Shop as they wish, when they wish f Social phone Web Retailers Customers Today it’s all about CONSUMER CONVENIENCE - buying what they want, when they want, where and how they want PayPal Mobile Confidential and Proprietary 7 E and Mcommerce quickly gaining share vs Offline Web represents ~5% of Retail in U.S. Mobile set to reach the same level much faster PayPal Mobile Confidential and Proprietary 8 Key Mobile Technology Trends • Faster and faster networks – 4G, HTML 5 will accelerate mobile shopping Implications: Network speed key enabler for mCommerce • Exploding adoption of “smart devices” – 1B smartphones/tablets with advanced browsers Retailers ”mobilization” needs to be accelerated by 2013 (Cowen & Co.) • Android on the rise – iPhone and Android 90% of browsing • Emergence of Tablet computing – Rich shopping experience and heavy spenders Mobilization more expensive to optimize multiple OS platforms and form factors 9 Mobile Shopping = Huge Opportunity for Retailers MORETAILERS Yet some have yet to invest adequately Millions of Smartphone/Tablet Users • By YE 2011, over 50% of the U.S. adult population will own a smartphone (Nielsen) Shopping on their Mobile Devices •50% have browsed, researched, or purchased products (Oracle/ATG) = Huge Opportunity for Retailers • U.S. mCommerce sales will reach $5B in 2011 and represent 12% of global eCommerce by 2015 (ABI Research) • Estimated $1T opportunity, when considering multi-channel According to Forrester Research, 39% of Retailers are still in the early stages of their Mobile strategy - Forrester Research, Mobile Commerce Forecast, June 2011 PayPal Mobile Confidential and Proprietary 10 MOBILE WILL Increasingly PLAY A CENTRAL ROLE in Multi-Channel Retailing “Whatever your mobile strategy is, keep in mind that a consumer’s ever-present mobile device is destined to become the connector of all other channels – Web, physical stores, contact centers, catalogs and social” Kelly O’Neill is Director of industry marketing for Art Technology Group (ATG) “As our guests increasingly turn to their mobile phone as a virtual shopping assistant, we recognize the importance of creating innovative solutions that enable them to interact with Target anywhere and anytime” Steve Eastman, President of Target.com PayPal Mobile Confidential and Proprietary 11 Today’s Agenda 1. OUR VIEW ON THE WORLD – KEY TRENDS & INSIGHTS 2. WHO IS THE MOBILE SHOPPER? 3. PAYPAL MOBILE MOMENTUM 12 INSIGHT EXPRESS: Who Is the Mobile Shopper? A VERY attractive consumer for any retailer… • 36% make a purchase on their phone while in-store always or usually • 83% are between 18-44 years old • 72% are smartphone owners • 54% are male, 46% are female • 52% make more than $50k a year; 32% make more than $75k a year • 37% are minorities (compared to 21% for non-mobile shoppers) • 32% have an iPad Source: PayPal Mobile Confidential and Proprietary 13 KEY INSIGHTS PayPal Is Seeing The mobile shopper is mid- to late-30s, upper-income o iPad owners skew older, even wealthier o 4 in 10 online shoppers own iPhones. Mobile has become a ubiquitous shopping utility o Overall half of Smartphone users and iPad owners use their devices to shop Mobile is now a key complement to in-store shopping o Owners use smartphones as a shopping companion for product and price comparison o iPad is more popular for physical purchases (82%, vs. 56% by Smartphone) • Boredom/time-killing can trigger online shopping, especially on iPhone, iPad • Computer remains preferred shopping device; Mobile is making inroads driven by time-sensitive purchases (e.g. Gifts, Tickets) PayPal Mobile Confidential and Proprietary 14 Internet access from mobile device peaks during transit and also at night… Mobile Device – Internet Access by Time of Day (Weekday) Morning, before Travel (on the Lunch During office After going back At night - after start bus or train) time/break time hours from dinner and working/going to office/school before going to school bed Base: All respondents (n=507) Time of day people SHOP the most on mobile devices: 12-1pm 15 PayPal Mobile Confidential and Proprietary 18% of Mobile owners have purchased something on their phone; 35% of smartphone owners People are buying a wide variety of products at different price points PayPal Mobile Confidential and Proprietary 16 Why aren’t certain people shopping on Mobile yet? A few reasons from Forrester Research Inc. – Concerns about Security “I would use the mobile Internet on my cell/mobile phone to purchase products…” 45% If my mobile phone number would be kept private Very easy [5] 28% If mobile payment services were more secure Very satisfied [5] 35% 44% [4] 41% [4] 36% 38% If sites on the mobile Internet had all of the same content, features, and functionality as on the standard Web site 35% If the mobile Internet was faster [3] 19% [3] 33% 17% If sites on the mobile Internet looked more like they do on a computer 32% If my phone had a larger screen Base: 4,306 US online consumers Source: Forrester Research Inc. North American Technographics® Retail Online Survey, Q1 2011(US) PayPal Mobile Confidential and Proprietary 17 Additionally, the Mobile User Experience needs some Help Respondents were asked to rate their channels for quality of customer experience: • Just 9% believed the Mobile experience was good • 46% believed it was poor. Source: eConsultancy “Reducing Customer Struggle Report, June 2011 PayPal Mobile Confidential and Proprietary 18 Payments Play a Critical Role in Mobile Security Simplicity Innovation PayPal Mobile Confidential and Proprietary 19 Today’s Agenda 1. OUR VIEW ON THE WORLD – KEY TRENDS & INSIGHTS 2. WHO IS THE MOBILE SHOPPER? 3. PAYPAL MOBILE MOMENTUM 20 The Global leader in Advanced Payments 100M Digital Wallet Accounts ready to shop 100M active accounts, 190 markets & 24 currencies 3 million merchants accept PayPal 68% of the top 100 IR B2C merchants. $92B payment volume in 2010 (28% YOY Growth) 18% of ecommerce 47% international 61% off eBay PayPal Mobile Confidential and Proprietary 21 PayPal Mobile Offerings are Customer Driven Consumer Clients mCommerce Solutions • PayPal App available on iPhone, Android, RIM. Key Features• • • • • Send/Request Money, Check balance/History In-Person payment (Bump), Split Check Charity Donation Mobile Check Capture PayPal Local •Mobile Web Checkout solution •App Stores API based solution •In-app payments native SDK • Evolution to Wallet for remote and POS transactions PayPal Mobile Confidential and Proprietary (Libraries) 22 PayPal Is Experiencing Massive Mobile Growth • 5x Growth in 2010 • Processing $6+ million mobile transactions daily; set to more than triple to over $2B in 2011 (globally) $2,000+ • 6 million+ regularly using PayPal via mobile devices $750 $25 2008 $140 2009 2010 2011Est PayPal Mobile TPV Set to reach $2B globally in 2011 PayPal Mobile Confidential and Proprietary 23 Our Customers look for a consistently Great Checkout Experience at leading retailers 1 data field-password entry PayPal Mobile PayPal Mobile Confidential and Proprietary Confidential and Proprietary Tap, Tap, Done. Minimal Steps for Easier Shopping. Login Checkout Review Payment Complete Your Customers are in Control They CHOOSE the place, store, site, phone, tablet… PayPal ensures you’re Everywhere with the perfect buying experience PayPal Mobile Confidential and Proprietary 25 Optimize your Mobile Shopping Experience. Easy Checkout for “on the go” Customers. For Customers For Retailers • Increase mobile sales and conversion Fast and easy: speed through checkout • Provide a strong customer experience Secure: Avoid entering sensitive data in public • Drive loyalty and re-use from over 100 million savvy PayPal buyers • Seamless 2-click buying • • Sampling of Live Sites: PayPal Mobile Confidential and Proprietary 26 Partners Are Seeing Strong Results Express Checkout Drives Higher Mobile Sales Testing Validates Impact: •Conversion Lift: Over 30% increase in Conversion (turning browsers to buyers) •Sales Lift: Double digit sales lift •Huge Relevance: 2x higher share of checkout for mobile than that on the web (30%+ SOC for several merchants) “The largest benefit to offering (MEC) is to streamline the checkout process and offer a more simplistic view catered to one’s mobile device…” - Neel Grover, President and CEO PayPal Mobile Confidential and Proprietary 27 Case Study: Crutchfield Drives Huge Conversion with PayPal Crutchfield Results • 33.7% lift in site conversion over other payment types (Crutchfield A/B Testing) • 65% of PayPal mobile users are brand new to Crutchfield (Crutchfield Internal Data) “Our data shows that Mobile Express Checkout not only drives CONVERSION, but that it is delivering a significant amount of NEW customers. This is evidence that providing a fast and easy checkout is an integral part of the mobile shopping experience.” – Todd Cabell, Senior Manager, Web Strategy, Crutchfield PayPal Mobile Confidential and Proprietary 28 Concluding Thoughts • Let Your Customers Lead the Way • Build Solutions that Make their Lives Easier • User Experience is Critical to Successfully Mobilize Your Business PayPal Mobile Confidential and Proprietary 29 Next: Blue Nile Mobile Story • Leading online jewelry retailer will now share their mobile success story • Jon Sainsbury, VP of Marketing at Blue Nile PayPal Mobile Confidential and Proprietary 30 APPENDIX 32 Remember Experience is key: Build the right mobile flows for your customers Suggestions to optimize your mobile site or app: • Minimize data entry, clicks and scrolling with expandable sections so content fits on screen • Make links and buttons large enough to click on small screens • Place ‘Checkout Button’ top and bottom of screen • Place ‘Add to Cart’ button throughout product and search result pages • Make checkout fast and easy – leverage auto-populate functionality when possible and provide ‘progress bar’ at top • Allow users to checkout as guests (without lengthy login) • Automatically save the users cart contents for return visits • Keep design simple and clean- no need to put entire website offerings on a mobile device “It seems to me that PayPal is likely one of the best options for mobile sites it helps to reduce the number of keystrokes, and most Web buyers already have established PayPal accounts” - Sucharita Mulpuru, VP & Principal Analyst, Forrester Research PayPal Mobile Confidential and Proprietary 33 Allows for Ease of Use and Flexibility. UI Adjusted for mobile user needs LOGIN REVIEW Expands to list purchase details Expands to change funding source Expands to change shipping address Log In using email and password or phone and pin Login Review PayPal Mobile Confidential and Proprietary ADDING PAYPAL MOBILE EXPRESS CHECKOUT Small integration effort required Available now for iPhone/iPad/Android/Blackberry; other major devices soon Leverage the Existing Express Checkout API • • Same functionality as on the web, optimized for mobile devices Simply change the value of a few parameters to account for the mobile flow Integrate PayPal’s Mobile Checkout Flows • • PayPal will help you build the optimal mobile user experience New buttons & graphics are designed for the mobile user interface Avoid Changes to Backend Processing • • PayPal Mobile PayPal Mobile No changes are needed if PayPal EC is already integrated on your traditional website Auth/Capture, Refunds, Disputes, Reporting, and Reconciliation information transfers seamlessly to your mobile site! Confidential and and Proprietary Confidential Proprietary 35 A Sampling Of our live mobile Retailers Digital Goods/Intangibles Physical Goods ..and more PayPal Mobile Confidential and Proprietary 36 MERCHANT SCREENSHOTS Mobile Checkout Button Drives Conversion PayPal Mobile PayPal Mobile Confidential and and Proprietary Confidential Proprietary 37 And PayPal is at the center, satisfying consumers no matter HOW or WHERE THEY shop with shopping and checkout solutions across all channels and devices In-store Local Web Shopping Sites Mobile/Tablets ubiquitous digital wallet Social f Text msn ms n Enabling Your Move into Channels That Extend Your Shopping Aisles 38 What is Driving Mobile Behavior? Ways You Currently Use Your Mobile Device to Shop 78% Are bored and are looking to pass the time 72% Want to check product reviews Are in a store and you want to check prices 65% See an item that interests you on the web 65% See an item that interests you in a store 63% Get an email from a familiar retailer 63% Just want to check and see the newest or latest products Are in a store and want to check product features 60% 59% 55% See an item that interests you in a magazine Need to purchase a gift for someone 51% Are alerted about a sale on an item or a price change See an item that will only be available for a limited time 51% 47% 46% Are trying to win an online auction 43% When an item first goes on sale None of these PayPal Mobile 2% Confidential and Proprietary 39 39 What happens when mobile sites go bad? Build the right user experience for your customers Harris Interactive Survey of Mobile buyers (commissioned by Tealeaf): http://www.mobilecommercedaily.com/2011/03/29/failed-mobile-transactions-drive-consumers-to-competitors-survey High Mobile Expectations: • 80% expect the mobile experience to be at least as good as in-store shopping; 85% expect it to be at least as good as using a traditional PC Risk of Losing Customers: • 63% would be less likely to buy from the same company via other channels if they had a problem conducting a mobile transaction • 84% of consumers who have conducted a mobile transaction in the past year have experienced problems (e.g. difficulty navigating, unable to complete order) Mounting Frustration: • Mobile users say they find mobile transaction problems more frustrating than going to the DMV or being stuck in traffic "PayPal's innovations within Mobile Express Checkout emphasize speed (2-click checkout) / simplicity (in-context payments) / and user experience.” - Scott Devitt, Executive Director, Morgan Stanley PayPal Mobile PayPal Mobile Confidential and and Proprietary Confidential Proprietary 40 M-commerce set to explode Remote commerce • Portion of $700B+ ecommerce migrating to mcommerce • eBay mobile $2B+ sales in 2010 • U.S. m-commerce sales doubled in 2010 to $3.4bn (2% of US ecommerce) • Mcommerce expected to grow to 15% by 2015 • Key successful use cases: • Ticketing • Daily deals • Time/location sensitive sales Online2offline • Mobile blurring the lines between online and offline • Mobile driving store traffic with deals/groupon • Estimated $1T opportunity Mobile key enabler 41 41