Bryan Sun, Nielsen South Africa Country Head
The 2016 Nielsen Mobile Shopping, Banking and Payment Survey - which polled online consumers across 63 countries - shows South Africans outpacing global nations in terms of online mobile adoption with 84% of local respondents saying they appreciate the freedom of being connected anywhere, anytime (compared to 74% globally) and 78% strongly or somewhat agree that their mobile device has improved their lives (compared to 70%).
Constant connectivity has also changed the nature of those connections, especially within the retail, banking and payments sector with 67% of South Africans - compared to 32% of global respondents - using mobile connectivity to monitor their spending and manage their finances and a full 69% of South Africans saying they would use mobile-only banking.
Nielsen South Africa Country Head Bryan Sun
says, “Mobile commerce has enormous implications for the entire retail ecosystem. Mobile devices are not only bringing new consumers into the modern, connected economy, but are also enabling a more customised experience, as products and services can be more closely tailored to behaviours, needs and preferences. But driving higher adoption and usage starts when companies develop a deep understanding of how consumers are shopping and transacting in a digital world and then use the understanding to design strategies around their habits and preferences.”Shopping: Choice and ease of use
Mobile devices have also become an indispensable shopping companion with South African respondents saying they use their mobile device to research (59%) or purchase (36%) a product or service online. One in three use an app to make a purchase (35%) and more than a third of South Africans use their devices to look for deals (39%), make better shopping decisions (44%) or make shopping trips quicker or more efficient (38%). However, 59% of South Africans remain concerned about payment security and as much as 65% would make more purchases if there were more incentives, loyalties or rewards offered to mobile shoppers only.
“Optimising the mobile experience, whether it’s an app or a mobile version of a desktop site, should be at the heart of any e-commerce strategy. A poor mobile experience may lead to lower conversation rates and drive shoppers to competitor’s storefronts, sites or apps. Retailers developing mobile products should keep in mind four fundamental shopper needs: ease, convenience, choice and value. That is, the solution should satisfy a variety of trip purposes and deliver strong value for money in a way that requires less time and effort,” says Sun. Banking: Managing personal funds
Mobile devices are also transforming the banking and payments industry, creating more ways to save and pay than ever before. Providing financial inclusion to the estimated
Two billion unbanked consumers around the world, the revolution in banking and payments is likely to be a strong driver of consumer spending in the years to come. The Demand Institute, jointly operated by Nielsen and The Conference Board, estimates that growth in access to cashless payments could lead to as much as $10-trillion in additional consumer spending over the next decade.
Accessing account information and paying bills are already regular activities for South Africans, more than two thirds (67%) said they checked an account balance or recent transaction on their mobile device in the past six months and 50% say they paid a bill online using their mobile device.
Not surprisingly, Millennials (21-34 years) globally lead the way when it comes to mobile banking. Of all the age groups, Millennials have the highest percentage (81%) who say they’ve participated in banking activities and say they plan to in the next six months. Generation Z (15-20 years) follows closely behind at 70%.
Once again, security concerns remain high and present a barrier to success and while banks continuously monitor security threats and incorporate new measures to protect customer’s assets they all need to better educate customers about the steps they’re taking, so customers believe their information is as secure on their mobile device as it is in a physical branch location.Commerce: Money on the move
South African consumers are also using mobile devices to pay or collect remittances for good or services and the mobile-payments space is quickly evolving. Mobile payments include both peer-to-peer and physical point-of-sale transactions, with the former more popular than the latter. More than 38% of South African respondents (compared to 28% globally) say they’re highly likely to transfer money directly to another person and or receive money (29%) from another person using their mobile device in the next six months, compared to 20% globally.
“Emerging markets, such as South Africa, have set the pace when it comes to mobile payment adoption and use. With sizeable unbanked populations that depend heavily on cash, mobile payments fill an important gap and have been the focus of extensive innovation efforts that will rely almost exclusively on digital tools for managing and moving money,” says Sun.
As much as 55% of South Africans enjoy the convenience of a cashless lifestyle and 54% enjoy mobile connectivity’s ease of use when it comes to making payments; with 45% of South African consumers agreeing it is a quicker way to transact. However, building trust will be a first step in encouraging wider adoption with 57% concerned about security and 23% seeing the cost of data as a barrier to doing more online banking transactions. Strategies: Future mobile connectivity success
When it comes to meeting their shoppers online, retail owners will need to recognise and cater to the different mobile-shopper needs with different tactics to win more consumers. This may mean incorporating mobile strategies across a range of touch points and customising messages to provide a more relevant shopping experience within each segment.
Banking institutions will need to focus on the customer experience. The mobile banking journey differs greatly from what respondents would experience if they visited a branch. Consequently, financial service providers need to design their mobile banking services with the device in mind, focusing on opportunities to minimise the effort required to use them. They should also look for opportunities to capitalise on the breadth of data - such as geo-location - and the features available via a mobile phone - such as text message alerts or calendar integration - to add value to their services and stay relevant to tech-savvy consumers.
Strategies for mobile payments success must therefore focus on the value-add. Better connectivity and the delivery of tangible benefits throughout the payment and purchase process will drive greater usage and encourage more South Africans to make use of their mobile connected devices for moving their money at greater speed and ease of use.