The online shopping mystery: why don't we use our smartphones to buy stuff?
Anyone who solves this riddle 'will be a very wealthy person'
The get-up makes you look like a cross between a gamer trying to overclock their brain and a cyborg.
It involves wearing a pair of spectacles, similar to Google Glass, except these have a total of five cameras. One on the front just above the rim of the nose that tracks head movement and two on the inside of each lens pointed back at the eyes. These measure pupil dilation, gaze pattern, and dwell time, all of which can be used to determine someone's interest level.
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Then there's the EEG on the head, with a series of electrodes affixed to the scalp that measure electricity flow and help determine cognitive load or how much the brain has to work to understand something.
There's also a device about the size of a small point-and-shoot camera held onto the back of the skull with a headband. This helps measure heart rate and arousal, or emotional intensity.
All of this gear is being used to get an unbiased, scientific answer to an enduring question: why does someone decide to buy something?
"We know that when we go shopping we make a decision within a fraction of a second. Our brain tells us what to choose without us really having to think too hard about it." says Diana Lucaci, founder and CEO of True Impact, a neuromarketing research and strategy firm.
"That's what we're seeking to measure," she says.
These days firms are asking Lucaci to use her brain-reading gear to help them solve a multi-billion-dollar riddle.
Why don't more people buy stuff using their smartphones?
"If I could solve that I'd be a very wealthy person," says Scot Wingo, executive chairman and co-founder of ChannelAdvisor Corporation.
ChannelAdvisor is a software company that helps companies sell products online on eBay, Amazon, comparison shopping engines, and search engines like Google, Bing, and Yahoo.
E-tailing, as it's known, is a hugely profitable sector.
According to Internet Retailer, in the U.S. and Canada, excluding groceries and vehicles, people spent more than $337 billion US online in 2015.
Sales through mobile devices accounted for less than a third of that figure. Yet mobile accounts for more than half of all internet traffic.
"So there's this disconnect because you would think that with traffic of over half that sales would follow and be over half, but they are really lagging, which is an interesting challenge we face as an industry," says Wingo.
Shopping but not buying
Wingo says retailers need to find a way to make the online shopping experience on mobile much less onerous.
Unless a consumer has downloaded a store's app — which is rare for people who like to shop around — shoppers first search for an item using the phone's browser, which brings up several different options at several different retailers.
At this point, surveys have found, consumers feel it's too hard to view the product image and product information clearly on the phone's small screen.
Then, after trying to compare different colours, or sizing charts, or price per unit, then adding an item to a cart, shoppers come to the checkout.
Chances are the retailer doesn't have the consumer's credit card or shipping information on file. Or if they do have an account, it's used so infrequently that they've forgotten the log-in information.
Which means the consumer then has to input a whole bunch of personal information such as credit card and shipping info.
"We've taken the desktop ... and we've put it on our phone. It's inconvenient," says Wingo.
That's born out by the conversion rate, or the percentage of people shopping online who actually follow through with a purchase.
On desktop, the conversion rate is about 3 per cent. On tablets it's about 2.5 per cent. On phones it's 0.8 per cent.
"They're shopping with the phone but not buying," says Wingo.
There is one exception.
Amazon — way ahead of the pack?
Amazon's conversion rate on mobile is 11 per cent.
"They've clearly solved this problem. What I think happens is, there are so many people on Amazon, they have your payment information already, their app has things like bar code scanners so you can do what's called show rooming, so if you're in a retail situation you can scan and compare prices. They've just made it so easy if you're already an Amazon user to use that app," says Wingo.
"So I think they're taking share, which is part of the challenge for other non-Amazon retailers. But I think they're also a great example."
But even 11 per cent on mobile seems absurdly low.
Consider the average conversion rate for most bricks and mortar retailers is estimated at between 20 and 40 per cent.
Which is why another school of thought suggests people naturally and inherently prefer to use their phones to browse rather than to buy.
But that doesn't jibe with the results of Diana Lucaci's brain readings.
She says the stripped-down mobile sites are actually easier for us to navigate.
Less cognitive effort on phones
"The amount of cognitive effort that someone has to put in to make sense of what they're seeing, basically, is higher on a laptop than it is on a smartphone."
Not only that, she says they don't see differences between age groups.
"Which was interesting. Someone from Generation Y who's familiar with smartphones may perform just as well as someone who's a boomer who's not very skilled at using a smartphone."
So retailers really have no excuses when it comes to encouraging more people to make purchases with their smartphones.