Originally published at www.pymnts.com on September 16, 2019.
Sheep are not natural-born leaders.
If they were, they wouldn’t need border collies or sheepherders to make sure that they didn’t follow wolves blindly into harm’s way and that they ended up where they needed to be at the end of the day.
Recognizing this, in the late 13th century, sheepherders decided to make their lives (and that of their border collies) a little easier. They had an idea to hang bells around the necks of castrated male sheep, called wethers, and turn them into the de-facto leaders of the flock. The sheepherder would simply herd those lead sheep — the bellwethers — whose bells became the audible cue for the other sheep to follow behind.
And so a sheepherding innovation — and new vocabulary word — was born.
Ever since, people have been in search of the bellwether, the leader in a category that signals a powerful trend and paves the path for others to follow.
Pundits identify bellwether states to predict election outcomes. Analysts pinpoint certain companies as bellwethers for the performance of a sector. Retailers scour social media to find influencers and designer bellwethers to turn trends into sales.
In the payments ecosystem, we need look no further than the bridge millennial for how the connected purchasing experience will evolve over the next decade. The group’s connected commerce behaviors are well-documented in the annual PYMNTS/Visa How We Will Pay 2019 study released just today.
This study, the third in our annual series, identifies marked shifts in the attitudes, behaviors and expectations for the role devices, apps and purchasing channels play in how U.S. consumers shop and pay — today and in the future.
But it’s the bridge millennials — those 30- to 40-year-olds who are the first generation of connected consumers with spending power — who offer profound insights into the future of connected commerce, and the devices and apps that enable those experiences.
This group of 60 million U.S. consumers — those older millennials and younger Gen X-ers who grew up using connected devices like smartphones, tablets and wearables — now have money to spend, and lots of choices for how to do it. Their shopping and purchasing behaviors have been shaped over the last decade by their interactions with a variety of connected devices, as well as the apps and ecosystems those devices unlock.
These early adopters of devices and apps use a different and, we’re finding, much more critical lens to determine the value of money — and, most importantly, the value of time when using that technology to shop and pay.
Which, for them and for every consumer, will increasingly be done with our voices.
Connected Devices: Why Less Is More
How We Will Pay 2019 is an annual national study of more than 5,000 U.S. consumers who report their shopping, spending and payment activities over a seven-day period. It provides an exhaustive and statistically reliable portrait of the connected consumer in America. The survey gets information about device ownership, usage, apps, use cases and trusted enablers of those experiences to better understand the connected consumer’s expectations of connected purchasing experiences. It relies on a very large and representative sample to capture and reflect the views of the U.S. adult population.
After three years, we are now starting to see important shifts in behavior that we believe only sharpens the focus for the evolution of the connected commerce future — from the only point of view that matters: The consumer who buys, downloads and uses connected devices.
We identified five such shifts, and two strategic trends that are important bellwethers for how, when, where and why we will pay in the decade that will begin just a few short months from now.
First, consumers are on a device and app purge.
All consumers are shedding devices and apps that don’t add value or save them time or money as they go about their day-to-day activities.
Out are the devices that connect to the internet but only do one thing — fitness trackers that only track vital stats or eReaders that only download content, for example.
In are those that provide their intended functionality, but also connect to an ecosystem of apps that offers expanded access to more activities and commerce-enabled opportunities.
Less has become more — much more.
The bridge millennials, more so than any other connected commerce persona in our study, appear to be more selective about the devices they buy or don’t buy — and the apps they use or don’t use — as they navigate their own connected purchasing experiences.
Bridge millennials own slightly more devices than the average consumer in our study: six devices compared to the roughly five that most consumers own. But they own far fewer devices than those we identify as “super-connected,” those who own roughly eight.
Bridge millennials are also more likely to drop apps that don’t offer value beyond the initial pop of curiosity or incentive offered to download it the first time.
Some of the apps and use cases that were perhaps the poster children of connected commerce experiences in years one and two of our study have faded in popularity for all consumers, and bridge millennials in particular. We think those preferences serve as bellwethers for the apps and devices that hold the most promise for how we will pay moving forward.
Apps like the ones that auto-fit clothes for purchase, auto-pay at restaurants, auto-find parking spaces and use smart devices like fridges to order food are both less used and of less interest to bridge millennials — as well as to all consumers — this year compared to years past.
On the flip side, the auto application of promo codes at checkout and auto alerts of car problems increased in interest and usage this year. For bridge millennials in particular, apps that help track and manage spending and automatically order clothes are of more interest and are used more often than by the average U. S. consumer.
Yet owning and using fewer devices and deleting apps doesn’t mean bridge millennials have less of an appetite for a highly connected commerce experience.
In fact, it’s quite the opposite.
The average consumer in our study engages in roughly 12 activities during the course of her day, and makes a purchase while doing roughly four of them. In other words, that means about one-third of U.S. consumers’ daily activities involve connected purchasing experiences.
For the bridge millennials, that’s even more pronounced. These consumers engage in roughly 14 activities during the course of the day and make a purchase during roughly six of them — more than half the time.
Think about that for a minute.
Connected devices are making commerce a contextual part of every consumer’s everyday life. Apps and devices have moved beyond the idea of owning a cool gadget to play around with to owning one that can connect consumers’ worlds to commerce — and for bridge millennials, that spans more than half of their daily activities.
We tend to use words like “seamless” and “frictionless” to describe what that end state means to the consumer.
Observing this consumer behavior, according to our study, suggests something very different. How we will pay, moving forward, comes with the expectation that it will become an integrated part of the consumer’s everyday journey.
No longer will it be “good enough” to have devices and apps that enable purchasing experiences anywhere and anytime. How we will pay means having connected devices that make purchasing experiences possible while a consumer is doing anything — eating, cooking, taking care of the kids, cleaning, commuting, watching TV … you get the point.
Consumers have shifted their focus from thinking about shopping and buying as something they have to “go do” to something they can get done when using those devices and apps — no matter what they’re doing or where they happen to be doing it at the time.
Bridge millennials help us see the apps and use cases that can unlock the true potential of a connected purchasing experience.
One that will increasingly be powered by the sound of our voices.
When Connected Commerce Is Only a Voice Command Away
Then there’s voice.
In the 2018 edition of How We Will Pay, we observed something that we thought was remarkable at the time: The percentage of U.S. consumers who reported owning a voice-activated device grew from 14 percent to 27 percent year over year. And of the 26 percent of consumers who owned such devices according to last year’s report, 28 percent used them to make a voice-activated purchase.
We thought that was a remarkable penetration for a device — a voice-activated cylinder sitting at home in the kitchen — that was still new, and whose use cases were quite nascent from a commerce perspective.
This year, in 2019, we were blown away.
Our study reports that this year, 31 percent of consumers report owning a voice-activated device, up from 26 percent in 2018 — and up from 14 percent when we began the study in 2017.
More than twice the number of U.S. consumers own voice-activated devices today than three years ago.
Even more dramatic: This year, nearly one-third (31 percent) of voice-activated device owners used them to make a purchase.
That means today, across all U.S. consumers, one in 10 have made a purchase using a voice-activated device, up 8 percent from this time last year.
Voice is connected commerce’s killer app.
Consumers are using their voices and those devices to order food — both groceries via shopping lists and take-out delivered at home. To a lesser extent, they are using their voices to buy clothes.
Sure, that’s still just a sliver of all commerce, but it is growing rapidly as more skills expand the number of things that can be ordered using voice, and as the virtual assistants that are the intermediaries of those purchases get smarter in managing those requests.
Don’t forget, it wasn’t too long ago that everyone thought online commerce was a sliver of commerce, too.
Even more interesting, perhaps, is the “omnichanneling” of voice as an enabler to commerce, which we observed this year. Voice is not only the most ubiquitous payment enabler on the planet, it is also the most portable.
Those consumers who use voice to enable purchasing do so using voice-activated devices in their homes, as well as apps on their phones, while out and about, including in their cars. Of the 31 percent of voice-enabled device owners who use voice to make a purchase, 45 percent do so across multiple voice-enabled environments.
The most avid users of voice commerce are the bridge millennials, 37 percent of whom own both voice-activated speakers and smartphones, and 32 percent of those using them to make a purchase. Those stats are even more compelling when compared to the “super-connected” consumers, more of whom own voice-activated devices but use them less often to make a purchase.
Bridge millennials, more so than any other consumer persona, will both shape and accelerate the voice commerce future.
So, too, will be the ability to have a multi-modal voice commerce experience.
Having links sent to a screen for a consumer to confirm a purchase or validate a piece of information — either in an app on a smartphone or via a voice-activated device — helps create a more seamless voice-enabled experience for the consumer while increasing the certainty of a sale for the merchant.
If voice commerce is connected commerce’s killer app, voice plus visual is the connected commerce gamechanger.
Why Perspective Matters
There are a number of other important findings in How We Will Pay 2019, a study that will serve as a strategic framework for the connected commerce future that each of you reading this aims to power, shape, develop or disrupt.
For instance, the home is becoming the command center of a connected commerce experience. And consumers increasingly view the brands they know, see and interact with — the card networks like Visa and Mastercard, FinTechs like PayPal and Big Tech players like Apple, Amazon and Google — as trusted enablers of the experience. Merchants and Facebook fare far worse, hovering at or near the bottom.
This year, we also observed fewer consumers identifying data security issues as the major inhibitor to engaging in a connected purchasing experience. Data privacy and security remain top concerns, of course, but fewer consumers identified them as their key concern compared to last year. Years of using connected devices and apps to engage in commerce, powered by trusted brands, seems to be increasing consumers’ level of confidence in making connected commerce a secure and integrated part of both how they pay and how they live their lives.
That experience has also given consumers a much better way to assess the value of the devices and apps that they trust to power those experiences.
Ecosystems generally make it easier for relevant parties to get together and do business. Connected commerce ecosystems make it easier, too, for consumers and ecosystem stakeholders to get together and do business, too. Consumers’ winnowing of devices that don’t provide that access can be seen as an interesting bellwether for how that connected purchasing landscape will play out in the years to come.
What we don’t yet know, but will see evolve, is how the consumer will make those ecosystem choices, as well as the role that devices, apps and enablers like voice will have in influencing those decisions.
Consumers in our study told us they trust the payments credentials and enablers that they know and use today — more so than the ecosystems and devices they interact with — to power those experiences.
Including the bridge millennials, the bellwethers for shaping how we will all pay in the decade to come.
And who will shape how the ecosystems that enable those experiences must evolve to make commerce a contextual part of our daily lives.
In part, because they’ve already shaped how we pay today.
It’s time to watch, learn and follow their lead.
No border collies or sheepherders required.