The managing director of PayPal Australia says Australian businesses should not forget about older buyers when developing their mobile commerce strategies.
The online payments platform launched a half-yearly review of the mobile shopping space yesterday, highlighting that one third of businesses surveyed had no plans to optimise mobile sales, even though 71% of shoppers surveyed said they use their mobiles to pay for goods and services.
“I wouldn’t ignore the older buyer right now, they still have a high disposable income,” Libby Roy told SmartCompany.
“My advice is to stand in the shoes of the consumers, consider what a business has today and how that translates if someone wants to access their business.”
There’s been a lot of enthusiasm about the “social commerce” trend, as platforms like Facebook roll out the option for users to make impulse purchases straight from their newsfeeds. With the tech still less than two years old, the hard data is not yet available about exactly how big the trend could get – so at this stage businesses simply have to listen to the desires of their customers about the ideal shopping experience.
About 11% of Australians surveyed by PayPal had made a purchase via social media in the last six months, but there are other ways to maximise online sales, including through mobile sites and the use of apps to collect payment. There’s also a segment of the Australian consumer market that spends over $6000 a year on mobile shopping, highlighting the importance of consumers with high levels of disposable income, with 22% of survey respondents spending more than $500 per month.
When it comes to older shoppers, it can be as much about pitching the products that they want as it is about making it easy to buy online. A 2016 study from the Wharton School of Business and Baker Retailing Centre, for instance, found US Baby Boomer shoppers they surveyed weren’t so keen on gift cards and online subscriptions, but would spend big on pet supplies, home improvement tools and lifestyle products online in the hunt for a bargain.
Roy says that while small businesses are often focused on the day-to-day operations of their business, rather than the future of tech, it’s worth keeping in mind that some of the sleekest and most successful e-commerce companies started as small companies themselves.
“The one that we see cited all the time is Uber,” she says.
“As business owners, you need to meet the needs of your consumers. Even if you’re a small business, you can still partner with platforms that have all that shopping cart accounting bundled together.”
Locally, the numbers suggest smaller operators might already have the edge over traditional big business. National Australia Bank’s recent online retail sales index shows Australian SMEs account for one third of all online sales and the small business sector has consistently grown at a faster rate than the traditional corporate sector.
In its most recent released figures on July 2016 trends, NAB recorded that overall online sales in Australia were actually down 0.4%, but SMEs are growing their share of the market at 17.3% year-on-year, compared to the 11.8% growth for the bigger players.
It’s not just about customers
There’s another reason that small business should look towards e-commerce infrastructure – once it’s set up, it can be easier to get paid.
Over the last two weeks the likes of Xero and Seek have spoken about the importance of their payment platforms in expansion, saying it’s not just consumers who want clean and simple online shopping setups. Cashflow and invoices remain the number one concern for many operators – a recent MYOB survey found more than half of the SME respondents thought waiting on invoices would put pressure on their businesses – and invoice payments and purchases via mobile can secure cash immediately, rather than there being a lag time.
Roy says that while the overall retail pie might not get any bigger, what consumers want will change who gets the biggest piece of it.
“GDP growth is only going to grow at a certain rate, but this is all going to shift the way companies grow,” she says.