Amazon Pay's Giulio Montemagno: "Our voice-user interface has huge strategic significance"
A year after it was deployed in France and several other European countries, online payments processing service Amazon Pay has won over a host of brands and chains, among them, in France, names like Kiabi, Lacoste, L’Occitane and Morgan. At E-commerce One-to-One 2018, the forum of e-commerce operators held in Monte Carlo on 20th-22nd March, the General Manager Europe of Amazon Pay, Giulio Montemagno, talked to FashionNetwork.com about the US giant's three strategic priorities, and about its plans in the field of conversational commerce.
FashionNetwork.com: What is your initial assessment of the deployment of Amazon Pay?
Giulio Montemagno: Our first objective was to provide a simple service, enabling consumers to make purchases outside our website securely, using their Amazon account. Out of Amazon's worldwide pool of 300 million active users, Amazon Pay has already been used by 38 million customers, compared to 33 million as of the end of 2016. In terms of the number of merchants at which the Amazon Pay option is available, we recorded a growth of 80% in 2017. Since 2015, the number of websites that feature [Amazon Pay] has nearly trebled. Geographically, the service has now been deployed in 200 countries. We are focusing especially on North America, Japan, France, Germany, Italy, Spain and a few other European countries.
FNW: All of these countries differ greatly in terms of payment attitudes and practices.
GM: Indeed, some of these countries are really advanced in terms of online shopping, like the UK, whose e-commerce market is worth 15% of the whole retail sector. France isn't there yet, but it remains an important market for us. It is worth $80 billion at retail value and it's growing between 15% and 20% depending on the sectors. What we are observing is that shoppers in France and other European countries are increasingly comfortable using their credit cards to pay for online purchases. Notably, 30% of purchases paid via Amazon Pay are made using mobile devices. Customers are gradually jettisoning more traditional payment methods, like cheques, and turning towards methods that are faster and more secure.
FNW: Are merchants the ones who need to be convinced then?
GM: After our launch in 2017, we enjoyed very strong growth. Notably in France, where we are very satisfied with the response we are having from brands, across different business categories. Apparel/footwear is one of the key sectors for our business. We are also very proud of the recently announced partnership with French apparel retailer Kiabi. Our goal is to win over an increasing number of merchants, to make them appreciate the advantages of the solution we have created, with access to Amazon's data base as a way of bolstering their business.
FNW: Amazon was in the news with its first checkout-free grocery store. Is this one of the tools that Amazon could be able to offer brands in the future?
GM: Our strategy is based on three main elements. The first is the creation of a unique e-commerce ID. The average user in France can have up to ten different login-password combinations. If you multiply this by three, to cover pc, mobile phone and tablet use, you are soon totally lost. This is why we want to work with brands to establish this single-ID concept, which would help increase customer loyalty and conversion rate. The second element are connected users. Together with brands, we want to create unique, innovative user experiences, whose precise nature we may not yet know, which will respond to new expectations and will help our partners be more competitive. The third element is trust.
FNW: Do online shoppers still need to be reassured?
GM: Trust is still the crucial factor in online payments. The way payments are settled is evolving, whether in-store, online, via mobile devices, and soon perhaps via conversational commerce. But trust remains the foundation. You cannot do without it, everything rests on it. Therefore, once we’ll be able to combine these three elements, a unique ID, connected users and trust, we'll manage to provide unique experiences. We are experimenting with several solutions, including some that go beyond the web.
FNW: You mentioned conversational commerce. Will the Alexa virtual assistant arrive in France soon?
GM: I cannot confirm the date when it will be deployed in France. For sure, our voice-user interface has huge strategic significance. There already is a huge volume of interesting data coming from voice-user interfaces over the web. The main fact I like to share is that, as of the end of 2015, voice-activated searches on the web were virtually unknown. At the end of 2017, 20% of online searches were voice-activated, for a total of 50 billion searches worldwide. If the trend continues, the figure will be 200 billion by the end of 2021. It's a new tool, and we will have to respond to consumer expectations about it. It means this will increasingly be part of how we interact with technology, at home or in-store.
FNW: Does this mean that, following this logic, Amazon could one day supply physical retailers with technical equipment, from voice-activated tools to checkout-free payments?
GM: We already produce hardware, from the Kindle to Amazon Echo. Our work is always driven by what customers need. If this means setting up partnerships to manufacture retailing equipment, we are absolutely willing to do it. If it responds to a customer need, it is consistent with our approach. We don't have a plan for the time being. But the core of the concept will be, as usual at Amazon, simplicity. The solution must be simple, for retail customers and also for the staff working in stores. Because this has been proven time and time again: if there's too much friction in the process, the adoption rate will not grow.
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