Two Experiences That Technology Will Kill Off in 2019

January 3, 2019


There is a well-researched variety of reasons for which consumers cut their online experiences with brands short: complicated checkout, forced registration (when forced registration is removed from the checkout page, businesses can see a 45% increase in customer purchases), unexpected costs (56% of shoppers leave for this reason), lengthy registration forms, slowly loading pages, etc. In the financial services industry and e-commerce, abandonment is a particularly painful problem.

The abandonment rate estimates are generally along the same lines. Some estimates suggest that as many as 70% to 80% of customers abandon online shopping carts. SAP puts the number of uncompleted online purchases at 97%. Other professionals suggest that businesses operate in a harsh reality of converting only approximately 2 out of every 10 visitors into paying customers.

As for online banking applications, while some put abandonment rates somewhere at 97%, others report that one out of three consumers are abandoning the process of opening a new account because it is too difficult or takes too long.

There is also the device influence at play: desktop conversion rates are 2.7X higher than mobile. While 30% of carts result in orders from a desktop, only 19% of carts result in order from smartphones.

Regardless of the point of abandonment – cart, application, payment, registration, etc. – the bottom line is the lost revenue opportunity due to an unnecessary interruption of the experience individuals came for. Salesforce emphasizes that the ripple effect of a single bad experience or missed customer expectation goes beyond a lost sale: 57% of customers have stopped buying from a company because a competitor provided a better experience. What’s more, 62% of customers say they share bad experiences with others.

For abandonment and lost revenue opportunities to become a problem of the past, technology has to kill off certain elements in the chain of interactions between customers and businesses.

First of all, payments have to become non-intrusive and invisible. The moment of payment is a common thread connecting businesses and consumers in any type of interaction and industry. But a payment itself is not why individuals shop online or interact with any particular brand for that matter, which is why businesses have to stop making the payment a visible, high-touch element of the interaction.

There is much to learn from Oyster, for example, London’s payment system for public transportation. TfL introduced contactless payments in the underground in 2014. In four years, the adoption went to contactless cards or mobile devices being used to make 17 million journeys a week. Today, about half of all pay-as-you-go journeys made on London’s underground and rail services use contactless payments.

London has another interesting proposition: in May 2018, the city introduced a contactless payment scheme for buskers in what the organizers – Busk in London and iZettle (acquired by PayPal the same month) – the claim is a world-first. In addition to tossing loose change into a box, passers-by can use card readers to make contactless payments. The card readers, which plug into smartphones and other devices, allow tap-to-donate fixed payments.

The experience with Oyster (London, UK) and with ORCA (Greater Seattle Area, USA) is focused on smooth access and use of public transportation that removes the biggest pain point as it enables seamless use of different modes of public transportation to reach the desired destination.

It’s highly likely that the next step in transportation payment systems (in fact, ToneTag refers to examples of toll plazas and metro turnstiles speaking of allowing people to drive or walk across without stopping to pay for commute) is what Amazon is doing in the Greater Seattle Area with the Amazon Go store, omitting the payment experience altogether from the most payment-centric activity – offline shopping. Amazon Go’s Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When the customer is done shopping, s/he can just leave the store. Shortly after, Amazon charges a person’s Amazon account.

Barclays is a curious example from the banking industry. In May 2017, Barclaycard began trialing a new invisible payment concept – Grab+Go – which removes the need to visit a traditional POS. Implemented in some of its colleague restaurants in the UK and US, Grab+Go is designed to streamline the shopping experience for customers buying low-value goods. The app turns the customer’s phone into a mini checkout, so they can scan their goods as they go, complete their purchase with a single click, and then walk right out the door. The receipt for the goods is stored in the app too. Between May and November 2017, Grab+Go reduced the average transaction time for colleagues at 1 Churchill Place pilot from 5 minutes to just 27 seconds.

A similar proposition has been in the works at BBVA. In March 2018, BBVA shared that it is developing payment methods based on biometric technologies to make checkout at stores invisible. At the time, the solution was already being used in cafeterias and restaurants at Ciudad BBVA. More than 1,000 employees used an app to automate payments and testing has begun on a biometric facial recognition system based on technology from the startup Veridas, a joint venture between BBVA and Das-Nano in 2017.

The payment system was part of BBVA’s determination to lead the development of invisible or frictionless payments in order to transform customers’ purchase experience in stores. The app was designed along with Sodexo Iberia, the Group’s restaurant partner. The next step in developing the project will be the integration of biometric technologies.

With this system, users were able to save between 7 and 10 minutes, and restaurants have recorded increased billing and productivity, BBVA claims. To automate payments, the user just needs to register in the app and enter their credit card details.

BBVA was also implementing a customer loyalty solution within the app, which accesses offers and promotions. In one month of use, the application has been downloaded by more than 1,000 employees, around 15% of all those who work at BBVA’s headquarters in Madrid. In addition, 10% of the orders made on Expresso, one of Ciudad BBVA’s most frequented coffee shops, were made via the app. As for the establishment, the use of this system has increased the average total expense by 50%.

Using beacons with BLE technology, companies like Dash, Reserve, and Tab allow diners to pay quickly and easily by just saying their name to the waiter or barman. The app automatically bills the cost to the user’s card, which is stored in the cloud. These services turn payments into an automatic process that takes place in the background.

With the payment being one of the most abrasive pain points of any purchase-involving experience, the most successful brands will have it removed from the customer’s sight completely.

The same goes for authentication – another major pain point in accessing services, completing transactions, etc. Passwords are on their way out of our daily experience but that doesn’t make things any better. The vast majority of authentication methods today are focused on building gateways by either layering factors in attempts to figure out the best combination, or using one particular access-blocking method – XFA has been around for a long time and is firmly rooted across industries. Regardless, all those solutions share one hallmark – an interrupted experience with a personal device or service.

While some focus on the security aspect of authentication, others focus on authentication as another pain point in business-customer interaction that needs to be removed. Just like a payment, authentication as a standalone, visible element of interaction is on its way out of our daily lives.

Consumer’s expectations are increasingly aligned with companies that provide immediate, alternative solutions to everyday life tasks. People expect things to be instant – whether you’re talking about a package delivered from Amazon Prime or a ride appearing at a swipe of their fingertips via Uber. – Joshua Dziabiak, Co-founder and COO of The Zebra

Customers expect things to happen in nothing less than an instant. For experiences to be sticky and conversions successful, technology has to remove as many obstacles as possible. The whole class of solutions tailored solely for fortifying personal devices and personal accounts from access by improper parties is on a fast track to obsolescence. Invisible continuous profiling of the user can allow companies to accumulate enough data to truly understand who is using the service based on past usage patterns. No-barrier use of any service undoubtedly smoothens the experience and allows businesses to gather insight on a user’s in-app or online behavior, thus improving the quality of the invisible authentication methods used.\ \ Modern devices are equipped with all sorts of sensors and most applications are able to track user activity in and even out of the app by getting broader access to the phone’s nooks. Therefore, modern technology and software are ready for the generation of authentication solutions that ensure the person is who he is supposed to be without the need to ask that person to authenticate himself. Behavior-based profiling allows users to freely operate in their personal devices, use services in apps and browsers – all while security solutions are closely monitoring and evaluating whether the behavioral pattern matches the owners’ every time.\ \ There is a narrow circle of companies working to enable uninterrupted experiences. Transmit Security, for example, automatically learns each and every one of the client’s users: this includes the devices each customer uses, login times, login locations, navigation patterns, in-app activity, and more. Based on the customer’s behavioral profile, the system makes decisions to minimize friction – it monitors customer activity inside applications and disables the need for interactive authentication as long as the customer remains within safe boundaries. Once the customer steps out of these boundaries, primary or secondary authentication processes are triggered.\ \ Back in 2014, a company called Toopher (acquired by Salesforce in 2015) developed and deployed a two-factor invisible authentication solution for the faculty and staff of the University of Texas. At that time, the solution was focusing on location-based invisible authentication, which can be considered an earlier version of advanced invisible authentication solutions monitoring an array of behavioral patterns. Toopher used the geolocation feature of the mobile device, learning where a user typically logged in to various sites. If a login came from a location that is not typical, a request was sent to the mobile to further authenticate prior to allowing the transaction. The system could also be used to authorize only specific transactions from a provider’s suite of services or to authenticate the identity.\ \ BehavioSec – one of the pioneers in the use of behaviometrics – is another interesting company that we have covered on numerous occasions. By continuously comparing different aspects of the current input stream with a previously stored user profile, behaviometrics can detect anomalies in the user’s behavior within seconds and stop intrusions while they are happening. If the behavior matches, the users get to enjoy an uninterrupted experience with their devices and personal accounts. The number of elements characterizing behavioral patterns that devices can capture has expanded considerably along with the precision of behavioral profiling.

The core idea behind all those solutions remains the same – to ensure stronger security for any experience without having to interrupt the experience itself.

One of the keys to killing off certain experiences in 2019 and beyond is the hyperconnectivity of a modern consumer. Sensory technology and IoT are playing a critical role in enabling smooth experiences with services that can be accessed from our personal devices, including vehicles, homes, laptops, wearables, etc. Moreover, the need for carrying a particular device will be eliminated as any tech carried by a person will be able to carry out the same function. Equipped POS terminals should be able to interact with any personal devices with payment functionality to perform a transaction without the need for a person to interfere at all.

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