Buy Now, Pay Later is the fastest-growing payment alternative in North America
Every year brings new changes for retail.
Technology is pushing the boundaries of how we shop. First, there was the internet, then mcommerce. Now there’s conversational commerce, smart speakers, and wearables. In fact, today, any connected device or social network is a potential sales channel.
On the other hand, the traditional retail environment is evolving too. The headlines are full of high-street closures and it’s clear that retailers that aren’t adapting are struggling. But others are thriving by making stores destinations in their own right; Apple serves coffee, Patagonia hosts yoga classes, and Nike lets you test-drive your trainers in an in-store basketball court.
So, in a world where anything can be a shop, and a shop can be anything, how do you accomodate shoppers who value experience above everything?
Clearly, overhauling all your systems at once isn’t practical. Instead, we recommend an iterative approach, starting small and evaluating results based on shopper data. And, since data and insights are so important, we partnered with 451 Research to survey over 5000 shoppers and 500 retailers across Europe to help you understand the latest retail trends.
Implementing new technology is expensive. But so is ignoring your shoppers’ pain-points.
It’s no secret shoppers hate queuing. But what’s interesting is the impact this has on your revenue.
Our analysis shows that long queues caused European retailers to lose €17.9 billion in potential sales to competitors over the last 12 months. And they cost the European industry as a whole €16.3 billion when exasperated shoppers abandoned their purchase completely.
The message is clear: Shoppers won’t stand for queues. And why should they? There are plenty of retailers offering alternative products, or they could simply order the item online from the comfort of their sofa.
Fortunately, technology can help. Mobile point of sale (mPOS) devices let shoppers pay from anywhere on the shop floor, so you can take payment quickly and not risk losing the shopper to a long line. European footwear retailer, Schuh, has found this strategy to be successful, with mPOS accounting for 80% of sales in one of their busiest London stores. This sets them apart; our survey revealed that only 28% of retailers are offering mPOS in stores. So implementing this technology will give you a head-start on your competitors.
Other queue-busting technology includes self-checkout, where customers can scan items and pay on their own (supported by 30% of retailers). And payment kiosks, which are separate from the traditional checkout area (supported by 29% of retailers).
Another expensive error is not providing shoppers with the right payment options.
We found that European retailers lost €1.3bn in potential sales over the past 12 months because customers couldn’t pay using their preferred payment method. But retailers don’t seem to think payment methods are a priority; little more than two in five state that ‘cutting edge’ payment options is a focus for them. This seems a shame. Shoppers increasingly expect to be able to use quick and convenient methods like Apple Pay and Google Pay. But only one in three say they are ‘very satisfied’ with the availability of these payment options.
Our research has uncovered a new category of shopper, which indicates the direction of consumer trends today.
‘Spendsetters’ are the tech-savvy early-adopters, accounting for 51% of overall respondents and 60% of 18-34 year olds. They’re a good indicator of shopper expectations both today and in the future and they reveal three crucial components to a great shopping experience: Convenience, Context, and Control.
Spendsetters see digital technologies as essential to their daily lives. As well as smartphones and tablets, they’re likely to own smart speakers and wearables. Not surprisingly, they have the highest demand for digital shopping experiences. 69% say they would shop more online if they could make purchases with a chatbot, half want to use a store-branded app to pay in store, and 57% said a ‘just walk out’ payment experience would encourage them to shop in store more.
H&M, whose shopper demographic fits neatly into the Spendsetter category, recently launched a voice assistant application. “The fashion industry is changing fast,” said H&M Group Business Development, Elin Frendberg. “Technology is more important than ever as an enabler in adapting to an ever-changing society.” And, always keen to experiment with new experiences, we've created a chatbot app for the Google Home smart speaker to guide you through our retail report.
Personalization is important; half of Spendsetters said they would like to receive personalized information based on their immediate location. Technology like chatbots and smart speakers not only make shopping easier, but they’ll increase your efficiency and provide you with a wealth of data to improve your services.
Spendsetters expect to be in the driving seat of their shopping experience. They don’t want a wasted journey to your store only to find an item is out-of-stock; 65% say the ability to check if an item is available online before going to the store would increase their loyalty. Understandably, they also want control over how their data is used, so security and transparency are paramount.
Shoppers today place a higher value on experience than price and products. Armed with more information, options and opportunities, they can dictate the terms of engagement. So, to emerge as a leader, you must deliver experiences that encompass convenience, context, and control. To achieve this you must be able to anticipate your customers’ needs and deliver a consistent, seamless journey across both physical and digital touchpoints.
This becomes difficult if your technology systems don’t talk to each other. But, if your payments feed into a single platform, you can track shopper purchases across channels and markets, and view everything in one place. This makes it easy to build a 360-degree view of your customer, no matter where they are or the device they’re using. So you can delight them with personalized experiences which help to build loyalty and ultimately grow your revenue.
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