The Holiday Shopping Surge Looms; Firms That Moved to the Middle Are Ready

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Predictions vary about consumer spending this holiday season – some forecast tepid sales growth compared to last year, while others say it will be robust. But there is agreement about this – More of those holiday purchases than ever will be made using a mobile device:

  • The National Retail Federation says 21% of smartphone owners will use their device to buy holiday merchandise this year – the highest percentage since the federation began asking in 2011.
  • Abode projects that 29% of online sales on Thanksgiving Day will be from a mobile device, a 12% increase from last year.
  • eMarketer estimates that 22.6 million people in the U.S. will use a mobile device to pay for a transaction at the point-of-sale this holiday season, up 41.7% from last year.
  • Alibaba Group recorded $14.3 billion in sales on Singles Day, the Nov. 11 Chinese consumers’ holiday, and 69% of those sales were made on mobile devices, compared to 43% last year.

The projected uptick in mobile payment activity comes amid forecasts of particularly heavy shopping between Black Friday and Cyber Monday this year. A survey by Market Track, for instance, indicated 83% of shoppers said they planned to do most of their shopping on Cyber Monday or earlier.

Merchants faced with a crush of customers who are more apt to buy via smartphone must ensure these complex transactions are completed as easily as possible – whether customers are using retailer websites and mobile apps or in-store/in-person options like Apple Pay and Android Pay. At Equinix, we believe the key to doing that is to enhance interconnection with a “move to the middle.”

A new digital payments reality 

The increase in mobile payments isn’t just a trend for the holiday season. Forrester projects that the U.S. mobile payments market will hit $142 billion by 2019, up from $52 billion in 2014. But the need to make mobile commerce and payments happen smoothly is complicated by the number of parties involved in a single transaction. Multiple, distinct ecosystems (financial, mobile, retail, advertising, cloud) are involved. That’s not even considering the partners required to take advantage of the real value of the mobile transaction: the data collected about spending habits, consumer preferences, shopping locations, etc. Companies strategically positioned to successfully leverage this data will find unique consumer insights and revenue growth opportunities.

Equinix is one of the few companies that understands the interplay between these ecosystems and how they rely on each other. (Watch a presentation I gave in Melbourne, Australia, on this topic for more information.) We think the best way to access these various ecosystems is to “move to the middle” of where these complex mobile payment transactions are happening. 

Equinix data centers host active ecosystems for every component of the digital payments and financial services industry, including network and mobile carriers, clouds, banks, e-commerce providers and programmatic ad companies. Direct interconnection to these players helps delivers huge security, performance and efficiency advantages.

Plus, direct links to data storage and analytics firms and cloud-based services inside Equinix allow customers to take advantage of real-time processing and analysis of consumer data for faster customized targeting.

Mobile payments are poised for a major uptick this holiday season. Being with Equinix is helping prepare companies for successful Black Fridays and Cyber Mondays this year and beyond.

View this video to learn more about Equinix and mobile payments.

And check out our Enterprise of the Future report, which shows how interconnection is becoming critical to businesses everywhere.

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