Spreedly and “Buy Buttons”

Posted on December 17, 2014 Justin Benson

For many years sellers on the Internet set up their website, hooked up a payment gateway and started selling, and buyers came from search engines, either via SEO or paid search. With the rise of social sites like Facebook, Twitter, and Pinterest merchants found a new avenue of traffic from social media. All these different channels employed advertising models to generate revenue while the merchant focused on e-commerce/payment/subscription models. Things were simple.

However, the rise of mobile at the expense of web has major impacts for “where” online commerce happens, with many online experiences moving from the web to device-based apps. In addition, Amazon has created a closed loop of mobile app, search, one click buy, deliver that is threatening Google’s dominance of search. This is creating enough of a threat that now Google might build a “buy now” button to try to protect themselves.

New startups, focused on social and search, have embraced optimizing the app experience – indeed some have ignored the need for a traditional website at all – so the rise of the mobile app is impacting the traditional flow of converting advertising to realizable commerce. Today, while end users are still being redirected to merchants to make the final purchase, often these experiences are starting on a mobile app with the end user being redirected to a more traditional web browser session to complete the process. Or perhaps they’re instead moving from an extremely good mobile app experience to a relatively poor one, which can be a jarring experience that impacts conversion rates. Either way, users – particularly social users – hate the disjointed experience and are frustrated by the inconsistent flow, often blaming both the merchant and the social platform. This has created demand for social platforms to optimize the e-commerce experience and ensure the checkout flow is as seamless as possible given they now have skin in the game.

More specific to search (vs. social), the rise of Amazon has become a real threat to Google. Again, this is mostly app vs web, with mobile users opening a well designed Amazon app and searching for a particular product. The ease and simplicity of one click payments and shipping makes for a completely closed loop. The natural response is for Google to be pulled into controlling e-commerce that originates across its search platform, yet it’s unlikely that merchants, even if they’re feeling the pinch from Amazon, are excited about moving more of their relationship to Google. While there will always be tension in this model over “who owns the customer,” the combined Amazon and Google threat creates a very viable opportunity for vertical search and social solutions to thrive. Google and Amazon will inevitably compete on price (the lower the merchant price the better), but optimized vertical search services on the other hand often bring in a different, less price sensitive buyer that merchants find desirable. A good example of this is Wanelo, who leverages it to achieve 10 – 15% in referral fees.

There are several core components to a “Buy Now” button:

  • The end user wants an Amazon or Uber like one click experience. They need their payment method stored securely and easily accessed for repeat purchases. In addition, support for newer payment methods like Apple Pay, Google Wallet and Paypal need to be seamless choices.
  • Ideally the end user stays within the originating mobile app but the commerce still happens with the merchant. By staying within the mobile app conversion can be optimized. By transacting against the merchant’s existing payment infrastructure the money flow is not interrupted. This is key in terms of customer support, refunds and returns etc. This also helps solve the dilemma around customer ownership, since it’s now explicitly shared.
  • Merchants have to allow third parties to freely access and present accurate inventory real-time.

Spreedly helps social and search services securely store and tokenize payment data, and this truly universal token can be used across multiple merchants over time giving complete independence. Then via our wide range of pre-existing integrations to gateways and third party API’s we help ensure the end user can stay in app while the transaction processing still happens via the merchant’s existing processing relationship. What we don’t solve today is supporting the entire product or inventory management component; we at least help by acting as a passthrough, but the development work falls on the social/search platform and merchants to get the integration up and running. That may be why areas like ticketing (SeatGeek) and hotel inventory (Top10) have been early Spreedly adopters: the concept of supporting affiliate sellers was already in place, so optimizing payments and checkout flow was the final piece of the puzzle for them.

The next wave of mobile apps, which startups like Wildcard are helping create, will only increase the desire from end users for a complete end to end search, share and buy within a singular experience. We look forward to helping solve the payments related challenges.

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