We live in a world where consumers expect everything to be available instantaneously and with a simple touch of a button. We can thank Google for this - launched nearly two decades ago, it wasn't the first search engine, but it was by far the fastest and the most accurate. Consumers for the first time saw that information can be accessed in hundreds of milliseconds, rather than seconds or minutes in some cases. And as social and mobile commerce apps have gained in popularity, consumers have become even more demanding - they want answers, experiences and even products instantly.
But herein lies the disconnect. While consumers are spontaneous and want an instant response with a simple touch of a button, retailers' e-commerce sites and mobile apps remain a huge step behind. Retailers are feverishly working toward 3 second response times, a number considered respectable in the industry, although consumers have leapfrogged this expectation and are now demanding millisecond response times. This is a very important notion for brands and retailers to keep in mind. Consumers want speed. Speed leads to sales. Speed is key.
First, let's look at the big picture. Here's the good news - worldwide connectivity speeds are improving. According to Akamai data, global average connection speeds rose 23% compared to last year. Now the not-so-good news - e-commerce sites are getting slower. In fact, in the US, average load times last year increased by half a second, a virtual eternity in the digital world.
Why? It's actually quite simple - smaller pages load faster. Yet what we're seeing in retail is a movement toward larger pages - pages that are full of bells and whistles to attract and engage with consumers. Pages now often contain connections to social media, 360-degree images, video, digital dressing rooms and chat capabilities - and all of these features are slowing down load times. And slow load times can mean slow sales.
Digital performance measurement firm Dynatrace conducted a study that showed just a half second difference in page load times can make a 10% difference in sales for an online retailer.
That may sound extreme. But it's not - let me give you some real world examples.
According to a website engineer at fashion retailer Nordstrom, when their website's response time slows by half a second, they have seen a whopping 11% fall in online sales. That means a loss of tens of millions of dollars - ouch.
Conversely, office supply chain Staples saw an increase in online sales of 10% when they sped up load times on their website by one second. It's real.
The irony is, as retailers attempt to engage more deeply with their consumers by offering them more functionality on their e-commerce sites and mobile apps, the exact opposite is happening. They are boring their existing and potential new customers with frustratingly long load times. There are a plethora of retail options out there so consumers don’t have to wait around for sluggish pages to load. They can easily jump ship to another site. And getting them back is no easy task.
This is not to say that the future of m-commerce is bleak. Quite the opposite actually - there is enormous opportunity. Brands and retailers that have a "mobile-first" strategy will succeed. Look at the numbers - the mobile app market is large and growing - valued at just over $17 billion in 2014, it is projected to grow more than 200% to nearly $53 billion by the year 2020. It's critical that brands and retailers get their m-commerce strategies right.
This strategy should be predicated on a simple concept - consumers are most often interacting with a brand in one of two (or hopefully both) ways - through their mobile devices or through a retail sales associate. In both cases, information needs to be readily available and response times need to be nearly instant. The result? A positive user experience and increased sales.
Today's consumer is already accustomed to simplicity, functionality and, importantly, speed when it comes to using mobile apps. Consumers are increasingly becoming "mobile first" thanks to the popularity of social apps such as Instagram, Facebook, and Pinterest and mobile commerce apps such as Uber and Hotel Tonight. The apps are powerful, simple to use and lightening fast.
The world of mobile apps has had an interesting evolution. As m-commerce became increasingly more popular, brands and retailers started reconfiguring their e-commerce websites into mobile sites. As the platforms weren't optimized for mobile, the resulting sites had extremely slow load times, poor graphics, ineffective design and overall negative user experiences. Retailers soon came to realize that it was imperative that rather than retrofitting an e-commerce site to a mobile platform, they must develop native apps that harness the functionality inherent in a smart phone to improve the overall user experience. This realization couldn't be more relevant today. Retailer and brand apps that leverage the device's features, such as a camera, gps, notifications and chat capabilities, offer their customers enhanced functionality without compromising speed. Cole Haan, Calvin Klein and Vineyard Vines are great examples of retailers who have created powerful, simple and, importantly, fast native apps to engage with their customers.
In addition to engagement through native apps, retailers are increasingly relying on store associates to drive sales. Think of your last trip to an Apple Store. You were likely greeted by an associate carrying a hand-held device, from which he or she could quickly (we're talking milliseconds) provide you with product information, product availability and process your transaction. No waiting while the associate ran to the stock room and certainly no waiting in line to pay. Now see if you can think of any other retailer that offers this level of shopping simplicity. It doesn't really exist and this provides a huge opportunity for retailers. Rather than apologize for slow systems (response times with current mobile POS systems can be as much as twelve seconds), retailers should "fix" their hand-held POS systems to be quick and efficient like Apple. Similar to the creation of a native app, front end systems utilized by retail associates may need to be redesigned more efficiently and backend systems may need to be optimized for mobile and for scalability.
There is no question that today's consumers have a need for speed. Now, more than ever before, shoppers want (and expect) millisecond response times whether they're shopping from their phones or engaged with a sales associate. At the same time, they are looking for all the bells and whistles to which they have become accustomed. This combination of speed and functionality will create a positive user experience, will result in deeper engagement with the brand and will ultimately help drive sales. Retailers and brands have to strike that perfect balance; and while it may not be easy, those companies that can achieve it will end up on top.
Retailers must evolve from a purely transactional payment system. Fortunately, options now exist for retailers to up their game by easily and inexpensively rolling out a modern, on-brand mPOS system
Destination XL Group, Inc. (NASDAQ: DXLG), the leading retailer of men’s XL apparel, announced the launch of its first mobile app, created in alliance with mobile commerce leader, PredictSpring.