Singapore carrier Singtel is taking carrier billing into the physical goods world with a pilot test of a service that lets customers order Angry Birds plush toys for delivery to their home address and charge the cost to their phone bill. In the first week, “we’re already seeing five times lower shopping cart abandonment than previously with credit-card billing based checkout,” supplier Fortumo says.
“For digital goods, mobile operator billing often converts up to ten times better than credit cards,” Fortumo says. “Attempts have been made to see if mobile operator billing’s success translates from the world of apps, games and digital goods to intangibles like parking, movie and bus tickets.
“But what about real physical goods? Everyone who has tried buying something online from a mobile phone knows that the experience sucks. The first time purchase, using your credit card, from a mobile website, very often has more than seven steps.”
“We asked ‘if we can sell physical merchandise directly from the app with [a] modern app store-like shopping experience, mobile operator billing and pre-filled delivery address, would we see the similar conversion uplift that we’ve seen in digital goods?’
“We’ve set out to test this in partnership with Rovio and SingTel in [the] just-launched Angry Birds Plush Toys eShop in Singapore.”
“Branded plush toys make good candidates to be sold via mobile operator billing because they are not very high-ticket items — costing between $5-$50 — have relatively high margins and are usually impulse purchases,” Fortumo adds.
“This is relevant, because with impulse purchases, the decision whether to buy or not hinges on the simplicity of the purchase process. If the checkout flow is too complicated, people abandon the shopping cart.”
To make a purchase, the first step is to enter the customer’s phone number. For customers on a 3G connection, the operator can detect this and pre-fill the information. Otherwise, the phone number needs to be entered manually and payments needs to be confirmed via a PIN sent in a text message.
The delivery address then needs to be entered. In the future, Fortumo says, this could also be pre-filled by the operator if they have the customer’s mailing address on file and permission is given for it to be shared.
“While it’s very early to draw any firm conclusions,” Fortumo says, “early results are very promising” and the company is now looking for additional merchants to conduct similar pilots.