Insight

The Mobile Commerce Landscape: Interview with Peter McLachlan (Part 2)

Peter McLachlan

Peter McLachlan

Recently, we had the opportunity to sit down with the Chief Product Officer and co-founder of Mobify, Peter McLachlan. He sets the company's product and long-term roadmap, and ensures Mobify is solving the most important problems for commerce on mobile. We discussed trends and key drivers in the mobile commerce landscape. The following is Part Two of a two-part series and contains excerpts taken from our wide-ranging discussion.


Tech giants like Facebook, Amazon, and Google set a very fast pace of innovation. How does this impact customer expectations in mobile commerce?

I think that the most interesting thing here is that, for most shoppers, one experience sets the bar for all experiences. The example I like to use is Uber. Most people have used the service at this point. If you asked people to evaluate how they feel about a taxi ride after riding with Uber, I bet they would say that they had a lower quality experience with taxis after experiencing Uber.

The taxis haven’t changed, but Uber has set expectations. You know exactly when Uber will pick up you, where it will be, how much it will cost, and leaving the car is as easy as getting out the door with no payment stress. That experience has set the bar for what car transportation should be like, and any competitor is going to have to do even more because that bar has been set.

The same concept applies to retail experiences. You walk into an Apple store, you’re greeted, your problem gets solved and they take pretty much any payment method. Those are the expectations set, and retailers are going to have to meet those expectations, or people are going to be disappointed in the experience – even if they were happy a year ago.


What are the short and long-term implications of companies (like Facebook) pushing consumers to interact with brands outside of the traditional mobile commerce experience?

First, I think there’s a bit of a misconception that having Messenger or iMessage platform integration means that you have AI or a chatbot. A lot of retailers are opening channels up, and they’re being serviced and staffed through their call center or their service desk. Just because you’re integrating in chat channels, it does not necessarily mean you’re creating robots.

Second, people actually change their buying habits pretty slowly. We hear about the enormous popularity of Wechat and chat commerce in Asia, but if you look at the buying habits in North America, ecommerce as a whole still accounts for less than 20% of total sales for the majority of retailers. This is 15 years after we’ve been told that ecommerce is going to kill brick and mortar. Given the trends, we may cap out ecommerce around 40% of total sales in the next five or ten years in North America.

People change their behaviors slowly. Chat commerce is cool, it’s up and coming, and it’s going to move the needle in 2017 in terms of the excitement and buzz that happens in the industry with something new. But it’s probably not going to be a significant sales channel for most North American retailers for a couple of years - it’s more of an engagement tool here that can help you stitch together a fractured customer journey.

I think we can satisfy a different part of the buying journey for the North American customer than retailers do in Asia. Shoppers in some markets learned ecommerce with payments through Wechat or other chat platforms. In North America, customers learned ecommerce on the web or through apps. It’s going to take a while for that behavior to change.

So where does chat come in for the US market? It really comes in during the post-purchase journey. For instance, asking the customer if they want to connect to find out when the order has shipped, or contact service and support after the transaction is completed. All of these are really valuable post-purchase interactions. I think that in North America, we’re going to see a lot more focus around that part of the journey moving to chat, as opposed to buying. I’m not saying buying is not going to happen, I just don’t think that it’s going to be more than a few percent of retail sales next year.


What do you see happening in mobile commerce in 2017 and beyond?

After we start to see the results of native payments on the web, the next big thing is going to be voice interfaces. I think voice is going to make a massive breakthrough in the next year in terms of technology. We’re getting very close to some of the voice-to-text engines being able to understand a person in a crowded and noisy room better than another person could. We’re not quite there yet, but research is so close.

We have very aggressive, technically savvy competitors that are neck-to-neck on this research. Microsoft, Google, Apple - they’re all pouring R&D into this. For instance, the Apple Earpod is an amazingly cool item that you can actually look good wearing. You can have a voice interaction with essentially a robot, and not look like you’ve got this really silly Bluetooth thing shoved in your ear. I think it’s going to be a game changer.

At Google IO in May, they said that 20 percent of search was already happening on voice. That was five or six months ago, so I think we can expect that to grow, and we’re going to start to see it be an expected feature in a mobile commerce experience. I should be able to go to crocs.com and say what model I want it to show me and have it bring that up, and I don’t have to do anything further - I don’t have to touch my screen.

‘Environmental buying,’ or items in your environment that let you purchase things like Google Home and Amazon Echo, is a pretty big and interesting wave, and I think we’re going to see it expand outside of these players.

All this means that retailers who are replatforming need to incorporate mobile. If you’re replatforming, and you have not selected a platform that gives you a really great headless set of APIs, you should be thinking pretty hard about that decision because you’re going to be powering with a lot of commerce that isn’t necessarily going to be on your commerce site.


How should retailers incorporate mobile into their replatforming project?

For the vast majority of our customers and people I’ve talked to in the industry, nearly 50% of site visits are coming through mobile. I don’t think this number has quite permeated the boardroom level of large retailers yet. They’re still thinking desktop purchases are driving revenue, even though traffic is lower.

Mobile is the busiest front door of your brand, and you should absolutely be designing the mobile pages first. This is also good from a user experience perspective, because designing for small screens forces you to really crystallize your value proposition and makes it easy to progressively enhance that experience out to the desktop.

I’ve never really liked the term ‘mobile-first,’ I think it’s more appropriate to call it ‘customer-first,’ because mobile is where your customer wants to interact with you on-the-go, whenever they want, wherever they want.


What considerations need to be taken into account to ensure mobile success after a replatform?

Companies should look at the pace of technical innovation and decide whether or not it really makes sense to build something static when mobile is a moving target, as opposed to making an investment in a platform that is a system of innovation for them. Investing in a platform is a way of hedging your bets on the future, because that platform will be investing in the latest and greatest technology and will make it possible for a retailer to implement in a timely manner at a lower cost than a custom solution.