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Talking With: Amazon payments exec on connected experiences, Alexa and the IoT (Part 2)

In part two of a chat with Patrick Gauthier, Mobile Payments Today speaks with him about cart abandonment, Amazon's role in mobile commerce and how the way we pay is changing.

June 16, 2016 by Will Hernandez — Editor, NetWorld Media Group

In a two-part series from Mobile Payments Today (check outthe first part) editor Will Hernandez talks with Patrick Gauthier, vice president of Pay with Amazon. The interview took place at the Shoptalk conference in Las Vegas.

Gauthier discussed Amazon's decision to take the Pay with Amazon experience outside its four walls and enable other retailers to integrate the payment option on their website. He told Mobile Payments Today Amazon made the move in part to solve consumer "pain points," especially as it relates to online checkout.

"Everything Amazon does starts not from what we envision to be, it starts with a customer pain point we've identified and we're working backwards from it," Gauthier said. "And that leads to counterintuitive conclusions."

In the second part of our discussion with Gauthier, he discusses the company's view on mobile commerce and the role Alexa will play as connected devices enable consumers to shop from anywhere.

MPT: Cart abandonment is something that's often talked about with online shopping. What does Pay with Amazon bring to merchants that will help to solve that problem?

PG: First, there's the simplicity of the experience. We've measured the average checkout experience across a number of retailers at three-and-a-half minutes and cut it to about one-and-a half minutes. That does help to lower cart-abandonment rates. The average cart abandonment tends to be about 70 percent. The average cart conversion with Pay with Amazon tends to be about 70 percent, so we flip it around. If you still have a convoluted checkout process on your site, you might see worse [than 70 percent abandonment], but we're absolutely able to help retailers really transform the checkout and not lose sales there. The truth of the matter is, you don't win a sale at checkout, you lose it.

MPT: Where does Amazon see itself as it relates to mobile commerce?

PG: It's quite simple. Mobile is another connected device. The world right now on mobile, as I personally see it, is divided into two types of people. You have people who are solving for checkout, which frankly is last century's problem. And then you have people who are solving for connected experiences. Once upon a time, the world was divided into online and offline, and today it's about whether you're connected. I could be connected in the store, I could be connected in the car, in the home or in the street. Our implication in mobile is in connected experiences. I'm interested in spending time trying to reproduce an experience design in checkout which has solved a problem in the past, but which has seen its heyday. I'm interested in enabling unique experiences.

For example, our partnership with Moda Operandi, which is a high-end fashion retailer. Their experience with their customers starts online and continues face-to-face [in the store]. Once Amazon enters the picture, the customer can log into the site with their credentials and not have to create another account. When they eventually go to the store to meet with a stylist, the Amazon mobile app checks the customer in and sends an alert to Moda, which then sends an alert to the stylist to greet you. The stylist then has on her tablet the information of what you had preselected online and you can pick up the conversation from that point. We're creating continuity in the experience from home and then in the store. When it's time to pay, there's no need to go to the [physical checkout]. You can pay with your Amazon credentials right then and there. We've created something that is much more focused on the interaction between the consumer and stylist. That's a very personal experience of commerce.

MP: Is what you just described a way for Amazon to be “in-store” without being a payment option at the physical point of sale?

PG: You can think of it that way. The way I think about: it's a way for me to be where the customer is. The future is not made of browsers. The future is made of connected devices and those devices will often have native experiences. Mobile is in a bit of a transition because the majority of mobile commerce is still mobile web and not through mobile apps. However, on an Echo device, there isn't a browser. As the number of connected devices multiplies, what we're going to have is new commerce experiences that will be connected. For us, it's the same platform that enables the checkin and checkout and the capacity to do personalization.

MPT: You mentioned Echo, and that brings up what we're seeing with the Internet of Things. Where does Amazon see itself as it relates to the IoT?

PG: We're on the cusp of seeing a crop of new commerce experiences that will happen in living room, and by extension, the kitchen. The Dash Button is a good example when it comes to the kitchen.

Echo is just starting to scratch the surface in regards to commerce. You can ask Alexa for your Capital One account information. You can order a pizza from Domino's. You can order an Uber. We're going to start to see this kind of interaction with merchants, and of course, we'll be there. If you have an Echo, you're an Amazon customer. That correlation is going to be one-to-one and for a merchant, it's going to be important to be connected with Amazon. If there is an environment where you do not want to create friction, that would be with Echo.

MPT: The way we're buying is changing. Does something like Echo and its capabilities threaten the traditional retail model, or will we always have a brick-and-mortar location to visit?

PG: I think you said it well, the way we're buying is changing. It's changing in the home and it's also going to change in brick-and-mortar retail. I'm convinced that the two are going to continue to exist and I'm equally convinced that the two are going to evolve to include more personal experiences.

When I talk to retailers, I really see two kinds. There are ones that are fearful of the change and often it's because they have this legacy and change isn't always easy to manage. And then there are those retailers that see opportunity in the changes, and with those, we have a lot of opportunities to work together. When it comes to connected commerce, Amazon has one of the largest audiences and one of the most engaged audiences. If you shop online with any kind of regularity, you have an Amazon account. So, we have the opportunity to help retailers connect with those consumers. And again, we're doing it because consumers appreciate it, and it in the process, our engagement with them increases.

I think we're already an active participant of, and you can call it, retail 3.0. And it's not just with Pay with Amazon. If you look at what you're doing with Fulfillment by Amazon, and all of the logistics services we're deploying for merchants, and advertising services. We have tons of things to offer and those retailers are actually embracing the opportunities and changes. We see it and it's actually easy to work with them.

Photo courtesy of Amazon.

About Will Hernandez

Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

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