When It Comes to Mobile, Users Like Smart Phones, Browsers—And Now, Virtual Reality

By John Stewart
@DTPaymentNews

While many observers have lamented the apparently slow growth in consumers’ adoption of mobile payments, that doesn’t mean more consumers aren’t using mobile devices each year to buy things. It also doesn’t mean users aren’t getting more comfortable buying bigger-ticket items via mobile channels.

Surveys by researchers like Phoenix Marketing International and Auriemma Consulting Group have documented disappointingly slow adoption growth. But slow growth isn’t no growth, and now there’s research indicating those using mobile payments are using the service more often and are more willing to use it to buy more-expensive items.

Online payments, for example, are increasingly flowing through mobile devices. Purchase volume will reach $161.3 billion this year, up 32% from 2015. and hit $318.8 billion by 2020, according to a report released this week by Javelin Strategy & Research, Pleasanton, Calif. As recently as 2012, total online sales via mobile devices were $23.9 billion. Even proximity payments, where consumers tap a phone or scan a barcode at the point of sale, are expected to grow 10-fold, to $91 billion, by 2020, according to Javelin’s research.

For online sales, consumers show a strong preference for smart phones over tablets and for browsers over apps. Of the $122.2 billion Javelin says consumers spent online via mobile last year, half was spent through smart-phone browsers. Just 19% was spent through apps on smart phones. Tablets accounted for the remainder.

Several factors account for the growth in online mobile payments, Javelin says, including the steady migration of consumers away from physical stores, streamlined authentication and checkout routines, and a developing willingness to shop on mobile devices for big-ticket goods like furniture and appliances.

While the proportion of consumers who use a mobile device to buy physical goods remained flat at 51% in 2014 and 2015, that number has shot up to 61% this year, according to Javelin. Digital products like games, apps, and videos have seen slower growth.

One reason for this growing comfort with buying expensive goods via mobile could be the introduction of technologies that allow users to visualize products in context, Javelin says.

“ Augmented and virtual reality have the potential to shift even more commerce to the mobile channel by allowing consumers to see products in their own homes, or virtually “try” products before committing to a purchase,” Javelin says in its report. “A growing list of large retailers, including Adidas, Nordstrom, and Sephora, are using augmented and virtual reality to create new retail experiences through the mobile channel exclusively. Ikea, for example, allows customers to see what furniture would look like in their homes, using the smart phone’s camera and screen.”