Why retailers need to get real: Gen Z prefers in-store experiences
If 2019 was the year of customer experience online and in-store, then 2020 and beyond would be the time we focus on the retail experience as a whole. As the payment partner for some of the leading brands in Asia Pacific and around the world, we often talk about our unified commerce offering and approach to business.
While some brands associate themselves with either an online or offline space, it’s vital to consider things from a unified view. Here’s why:
Retailers probably heard this so many times throughout the last few years: shoppers don’t differentiate between channels. Even if business teams are organized by channels like digital, online, and mobile – we need to remember that ultimately, the shopper’s journey and the shopper’s experience will determine the retail strategy.
Think of how the online storefront and the physical store can work together in a seamless shopper journey. Simply put, be where your shoppers are to give them the best shopping experience.
Online retailers need not be confined to a website. We have seen several successful online brands launch pop-up stores or expand to permanent physical stores to create a complete brand experience for their shoppers. One example is Adyen merchant and Singaporean retailer Love, Bonito. The company has grown from a pure play online retailer to an omnichannel brand not just in Singapore but also in Malaysia, Indonesia, Cambodia and Hong Kong. Thanks to its customer-centric approach to business, shoppers are also enjoying its click-and-collect services, loyalty programs and store credits whether they shop online or in-store.
Likewise, the store isn’t just a place to buy goods either; it has become a space in the physical world for consumers to interact with and experience the brand. Retailers need to think of weaving payments into the space for purchases to happen seamlessly in stores.
Personalizing the store experience, providing the option to pay anywhere in the store via mobile point-of-sale (mPOS) or even simply letting customers tap and pay using contactless payment methods are some ways to do this.
Here’s where having a unified commerce environment would make a world of difference. With a unified view of the customer whether online, in-store or on mobile, retailers are always ready to convert shoppers into customers. Ultimately, to drive revenue, retailers must enable quick and frictionless sales conversions at any point in a shopper’s journey.
As we begin Q1 in 2020, it’s perhaps a good time to plan for the quarters ahead. Q4 is typically the golden quarter for retailers with shopping events like Golden Week, Singles' Day, Black Friday, the Cyber Weekend and the year-end holiday season. Singles' Day is among the latest addition to the Q4 retail events but it’s not going to be the last.
Introduced by ecommerce giant Alibaba in 2009, Singles’ Day has become an institution in itself. This year, Alibaba received over 1.3 billion orders on its shopping sites, and a total of US$38 billion in sales in just 24 hours.
The rising popularity of Singles' Day and shopping festivals can mean higher sales volume and new payment needs
What’s also noteworthy is that it’s influenced other retailers to not only jump on the Singles’ Day bandwagon, but also create shopping events inspired by the 11/11 shopping date. Some examples are 12/12, 10/10, 9/9, and that’s just across some of the retailers we see in Asia. In Australia and in the US, following the growing popularity of “buy now, pay later” payment, Afterpay has also added 14 and 15 August as Afterpay Day.
With the amount of marketing dollars spent on promoting these events, retailers can expect a higher than usual transaction volume not just from their regular customers but also new ones too. These events can span the online, offline and often involve cross-border commerce.
Payments are definitely an important consideration during these events, given the great opportunity cost. It makes sense for retailers to find a global payment partner that can deliver on performance, speed and reliability as these shopping events become more common across the globe – and the shopping season could start even before Q4.
Again, this is driven by retailers’ and ecommerce platforms to enable seamless digital payments and customer loyalty. The growth of contactless payments via cards and mobile wallets is a phenomenon that we see globally, especially in Asia Pacific where mobile penetration rates are high. Needless to say, to target mobile-first Chinese shoppers, retailers will need to provide Chinese payment methods including wallets like Ailpay and WeChat Pay.
Interestingly, wallets are also a good alternative payment method for many countries in Southeast Asia, such as Indonesia, Vietnam and the Philippines, that have a large unbanked population. Wallets help provide secure transactions in place of cash, and bridge online and offline payments. For example, in Vietnam, wallet payments may be used for digital subscription and streaming services. In Singapore, where most of the population have at least one bank account, wallets are a great option for loyalty programs. GrabPay and Fave Pay are some good examples.
With the growth of mobile wallets, many are speculating what the next big wallet could be. To stay ahead in this vibrant environment, I urge retailers to consider Adyen’s payment platform to offer the key local payment methods including the up-and-coming wallets.
The ecommerce landscape in Asia Pacific is competitive and retailers have to keep innovating. Some online retailers let shoppers “try before you buy” to bring the physical shopping experience online. For example, a shopper may order three items from a retailer. She keeps the item she wants and pays for it – then returns the other two items. Adyen helps to offer this via an Open Invoice.
“Buy now, pay later” is also becoming very popular especially among the younger audience. Installment payments offer shoppers greater flexibility, and this is not just for big-ticket items like electronics or furniture.
With contextual commerce picking up pace, there are more ways to buy and pay too. Several brands are enabling this via chatbots, programmatic ads, smart speakers, or pay-by-link. The latter is a unique link that a shopper can click on to pay for goods or services; it’s a seamless continuation of the shopper’s journey so the buying process can proceed from any device and without drop-off.
With so many developments in retail and retail payments, 2020 is looking to be an exciting year to bring your business to the next level of growth. Start planning early, and speak with our team to explore the best retail payment solution for your brand today.
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