Smartphones are changing shopping habits – Switzerland lagging far behind

More and more people in Switzerland are relying on their smartphone to shop, pay and transfer money: 74% use their phone to get product information at least occasionally, 59% make purchases directly on their smartphone, 40% use the smartphone to pay travel fares, and 27% to pay in shops. The Deloitte survey of 1,000 people further shows that 65% of the population use their smartphone for banking transactions at least occasionally. Young people tend to use the smartphone a lot more often than the 50+ generation. International comparisons indicate that people in Switzerland are still cautious. In order to capitalise on these trends, financial institutions and retailers must invest consciously.

The smartphone is becoming the tool we use to control our lives: in Switzerland, 92% of all adults have a smartphone and 97% of them use it every day, not least for shopping and banking. This was revealed by a survey of over 1,000 consumers in Switzerland and a total of 54,150 people from 34 other industrialised and emerging countries, for the Deloitte Global Mobile Consumer Survey.

Computers still have the edge over smartphones

However, there is still a lot of potential for growth in all age categories in Switzerland in terms of shopping using a smartphone. The laptop is the most popular option: 37% say that their portable computer is their preferred option for online shopping. This was followed by desktop computers at 24%, with smartphones trailing at 19%. Only 11% prefer to shop with their tablet, even though 62% of respondents own such a device.

There are also big differences in mobile phone usage between age categories. Whether ordering clothes online, buying cinema tickets, reserving a restaurant table or booking a city break, young people are particularly likely do all of these on their smartphone, even when on the move (35% of 18-24 year olds). This figure is even higher among 25 to 34-year-olds at 40%. In contrast, 9% of 45-54-year-olds, 7% of 55-64-year-olds and only 4% of 65-70-year-olds prefer to make online purchases with their smartphones. Laptops and desktops are much more popular among these older target groups.

Two gaps in the shopping process

The study reveals two gaps in the purchasing and payment process where users tend to turn away from mobile sales channels. The first gap is between information gathering and purchasing. People are more likely to gather information using their phone than to actually make a purchase. This is due to the fact that customers still like to shop in person after searching for information online - for example in order to examine the products or to get additional individual advice. However, the gap also indicates that providers have not yet made the best possible use of their mobile sales channels.

The second gap is between shopping with the smartphone and paying in the online shop. 71% of smartphone shoppers often produce their bank or credit card from their wallet and enter their data manually. 42% like to use online payment systems like Paypal or Twint, but only 8% identified Apple Pay, Google Pay or Samsung Pay as one of the payment methods normally used. For 26%, there is a time delay between shopping and paying: These shoppers do not pay for their purchases directly in the online store, instead preferring to pay either in advance or on receipt of the bill using their bank's mobile banking app.

Smartphones blur distinctions

"Smartphones blur the distinction between online and offline transactions. Whether we're at home, on the road or in the shop, we can always access information and price comparisons online. Retailers and manufacturers have to adjust to this, while at the same time trying to close the gaps in the purchasing and payment process. Seamless mobile shopping and payment must become more intuitive and attractive," says Konstantin von Radowitz, Head of Consumer & Industrial Products at Deloitte Switzerland.

The entire mobile shopping and payment process should also be flexible, so that consumers can join and leave the process where they find it most convenient. 10% already use the smartphone for their purchases on a daily or weekly basis, while 27% have already done this at least once. This is higher than in neighbouring France and Germany, but slightly below the global average of 34% and far behind China at 94%. The survey focused on the urban regions of China.

Are we witnessing the end of the wallet?

Direct in-store payment using the smartphone also faces stiff competition from card payments. In both cases, the customer has to retrieve something from his/her pocket or bag and hold it up to the reader and, also in both cases, the payments can be recorded and thus tracked and verified. Here, the card operators have eliminated a vulnerability in their service using apps, which are also used for authentication purposes. However the payment process is much more complex with apps that are unable to access the smartphone's Near Field Communication (NFC) interface of the smartphone, placing these at a disadvantage.

Will wallets soon become a thing of the past? This is certainly the direction things are taking: "More and more loyalty cards, membership cards and tickets are becoming available on the smartphone. The thinner the wallet becomes, the more the smartphone will establish itself as a method of payment," explains Konstantin von Radowitz.

Mobile banking is on the rise

For some time now computers have no longer been necessary for handling everyday banking transactions. Thus 65% of people are already willing to complete their financial transactions via smartphone at least occasionally. Switzerland is thus slightly behind the curve globally and well below the figure for urban China. Young people like to check their accounts using their phones. 45% of 18 to 24 year-olds prefer to use their smartphone, compared to 13% of 65 to 70 year-olds. Almost half (49%) at least occasionally pay their bills using their phones - the option of scanning in paper bills is a clear advantage.

Direct transfers are popular and convenient: 33% transfer money to another person in Switzerland at least occasionally, for example via Paypal or Twint. In these transactions, such apps have a clear advantage over traditional transfers as they are faster and more convenient. Here, too, a similar picture emerges in international comparisons: Switzerland is ahead of Germany and France, but well below the global average of 50% and well below the Chinese average of 94%.

Differentiation through innovation

"The survey confirms our observations: the smartphone is becoming increasingly important as an interface between customers and banks. For retail banks in particular, it will be of key importance to use this interface to provide financial information and to settle financial transactions. Newcomers to the market are already focusing on mobile banking as the interface with the customer. The well-thought-out and well-coordinated integration of the smartphone in a coherent multi-channel strategy is the key to the future competitiveness of banks," explains Adam Stanford, Head of Financial Services Industry at Deloitte Switzerland.

The potential of mobile financial services is far from exhausted. "However, innovations only make sense if they benefit the customer. For example, it should be possible to complete even more complex processes - including the recruitment of new customers - on the smartphone. Only transparent, easy-to-understand and uncomplicated mobile solutions will increase customer loyalty and satisfaction," says Adam Stanford in summary.