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IoT, Mobile Devices Drive Impulse E-Commerce Purchasing

Today, retailers are on the lookout for “contextual” consumers, those that exclusively shop using Internet of Things (IoT) and other mobile devices and increase impulse purchases.

According to a recent Javelin report, almost $1 in every $2 spent online will come from mobile purchases by 2020, due to contextual shopping, increased mobile device reliance and mobile first mentality. The report, titled “2016 Online Retail Payments Forecast,” analyzes how mobile devices are playing a role in e-commerce growth and channel shifts and how IoT devices are transforming online retail.

Report results showed that in 2015, 71 percent of online retail payments were made on PCs/laptops and only 29 percent of online retail payments were made on mobile devices. By 2020, 51 percent of online retail payments will be made via PCs/laptops and 49 percent of online retail payments will be made via mobile devices. Compared to 2015, consumer’s use of mobile devices for online retail payments will double in 2020.

“As consumers move to a ‘mobile first’ mentality when it comes to e-commerce, they are relying on the most frictionless payments to complete purchases ‘on the go,’” said Javelin’s director of payments, Michael Moeser.

According to the report, e-commerce on both computers and mobile devices has gone up by almost 12 percent from $379 billion in 2014 to almost $424 billion in 2015. Two years ago, buy buttons were introduced to allow retailers to bring goods into social media platforms. This allowed consumers to browse and buy items in-app, without leaving their digital space.

IoT devices act similarly to buy buttons because they also allow consumers to shop digitally with minimal effort. With embedded and networked sensors, IoT devices use Wi-Fi and wired connections to transmit information. This allows consumers to buy directly on the device with multiple interactions. Amazon Dash buttons, Amazon Echo/Alexa and Samsung Family Hub are all examples of IoT devices.

Mobile apps are also fueling impulse purchases from online customers. Retailers, including Victoria’s Secret and Nordstrom, allow consumers to directly buy items in the app, without having to move to another device or risk a seamless checkout experience.

“Consumers will increasingly gravitate to using payment forms that offer the easiest, fastest and most secure payment methodology, particularly one that also integrates shipping/billing addresses as this removes the challenges of typing on a smaller phone keyboard,” Moeser said.