Buy now, pay later: how can it work for my business?
Insights from Trustpilot, the British Retail Consortium, data experts, and a ‘customer whisperer’. Plus, learnings direct from leading brands like Crew Clothing and Brompton Bicycles.
With COVID restrictions a thing of the past, in some ways, it feels like life is back in full swing. We’re back at our places of work, venturing out with friends and family and planning vacations. But we're also feeling the pinch. The cost of living crisis is now fully underway, and brands are faced with a whole new set of challenges, from faltering consumer spending, to rising interest rates, and staff shortages.
"Normal', it would seem, is out the window. So what is next for British commerce? Our 2021 podcast, Retail Reawakened, explored the impact of the pandemic on UK retail and hospitality, highlighting changing consumer expectations and emerging trends. One year on, many of these are still relevant. But, as our new series Beyond Retail uncovers, there’s been further developments which businesses need to keep in mind.
After speaking to the likes of Brompton Bicycle, TrustPilot, and Crew Clothing, along with industry experts, we’ve gathered key learnings to help you meet consumers' ever-changing demands. Learn more about the series here, or head straight to Spotify, Apple, Google, or wherever you get your podcasts, to listen.
In 2021 we found that 34% of UK consumers shopped online more than they did before the pandemic. This is no real surprise given that stores were forced to close and businesses were forced online. But the hard work of pivoting to ecommerce has paid off. Our latest research shows 53% of consumers feel retailers used technology well to make their products available during the pandemic.
Now of course, with things reopened, consumers have a choice. But, regardless where the purchase is completed, digital will likely play a role. Linda Ellett, KPMG’s UK Head of Consumer Markets, Leisure & Retail, explains in Episode 1 that many consumers are now begin their shopping journey by researching products online. This is why it's so important your digital and phyiscal experiences match, as Linda says: “You need to make sure you're consistent across the two. You can't have a low quality website or app. That's not a great customer interaction because you're simply not going to be able to support the brand image and the brand value that you're offering to consumers.”
"The customer expectation is that we can deliver a more tailored experience, both online and in person.”
Crew Clothing’s head of IT, Richard Surman, helped spearhead the brand's digital transformation, describing it as 'core' to the company’s overall business strategy, especially in connection to its physical stores and meeting consumer demand: “We need to make sure that we are delivering more knowledge to our store staff, such as what our customer behaviour is, etc. The customer expectation is that we can deliver a more tailored experience, both online and in person.”
Despite the growing enthusiasm for digital commerce, physical experiences still hold a special place in people’s hearts. But with the expectation of consistency across online and offline comes the need for venues to enhance their in-person experiences.
59% of UK consumers say physical stores are still an important touchpoint for them, while 51% believe they should be exciting places to visit. Adyen account manager and in-store expert Milou van der Lans explains in Episode 3: “Visiting a store is about the experience, the journey. It's supposed to deliver something more than you get online. It's about having a moment - you can make it a day out.”
Creating magical moments that bring people back into town centres is a top agenda for high streets across the country. Of course, retail will always benefit from an increase in footfall. But, according to Kate Hardcastle, ‘The Customer Whisperer’, the value of high streets today is social rather than commercial. And versatility and collaboration is more important than ever.
“There’s already examples of brilliance happening in the UK, where communities got together and delivered a lot more than perhaps their cards have been dealt,” Kate says. “A lot of that has come from passionate people working together. You've got to remember that a lot of the UK is made up of small businesses and those small business owners are passionate individuals. We've seen communities can take on the task of redeveloping their high streets, but investment will always be needed.”
“We've seen communities can take on the task of redeveloping their high streets, but investment will always be needed."
As well as the pandemic changing our lives drastically, the cost of living crisis has too made us reassess our priorities, including our loyalty to brands. With prices soaring, it’s important that money goes further and spending is more meaningful.
According to Hannah Mayer, Senior Marketing Manager at Trustpilot, people who are loyal are not necessarily frequent buyers; they're those that believe in a brand and what it stands for. Moreover, she believes that companies with a clear purpose and message will win more loyalty. “It's not just a product. It's not just a price," says Hannah." It's what you stand for as a company, your integrity. That's what's keeping people buying. Because loyalty is emotional.”
Today, loyalty is no longer restricted to a follow-up action once the sale has taken place. Nick Popovici, CEO and co-founder of technology provider Vita Mojo, explains: “New loyalty is about being embedded in the experience and tweaking and influencing behaviour live as customers are making decisions rather than: ‘Next time this could happen.’ That's what digital brings to the plate; the ability to do that within the experience.”
"New loyalty is about being embedded in the experience and influencing behaviour live."
Brompton Bicycle harnesses loyalty in a unique way. Knowing its customers are passionate cyclists, the brand creates an environment to cater to them, as Chris Matthews, Brompton’s Direct-to-consumer Director, says: “Loyalty is very much community groups for us. It’s people getting together with Brompton and riding Bromptons together. That's loyalty for us at its core. And how we want to build loyal customers is by having them get together with Brompton. That's how we want to grow loyalty.”
Every loyalty point we earn, social media page we interact with, and online purchase we make leaves a little clue about who we are and our interests. And through unified commerce (connecting journeys across digital and offline) this augmented data creates insights with real value. Because offering a personalised experience is no longer just about being local or catering to a niche audience; it’s about understanding individual customer needs. There's a growing appetite for this; 25% of consumers like personalised marketing or tailored suggestions. Just make sure you're transparent in how you collect and use your customers' data.
Payments data opens a gateway of opportunities, as Joe Dupre, Team Lead of Unified Commerce Enablement at Adyen, says: “It gives businesses more knowledge of who their customers are. Then they can adjust things, like the product they show in that particular store or in that particular location. Having that data really unlocks things like improved business operations.”
For Brompton, which thrives on moments centred around its prized product, data helps them enhance the customer journey, as Chris notes: “We’re pretty much in all the major markets you can think of. And they're all growing at different rates, they've all got different consumer behaviours. Ultimately, data needs to be at the heart of our understanding of how we grow in those markets. If they're more digital-led, we'll focus on ecommerce.; if they're more physical-focused, we need to think of bricks and mortar.”
An important factor that comes with gathering insights is ensuring they’re collected in the right way; following regulations while offering customers reassurance and security. It can take a lot of work and resources to ensure compliance with such laws as the General Data Protection Regulation (GDPR), but it’s critical for a positive customer experience. Luckily technology providers (like Adyen) will shoulder a bulk of the data compliance burden for you.
For data expert and author, Bernard Marr, data is all about trust, as he says in Episode 4: “It can suddenly become a big compliance exercise rather than something that delivers better services to consumers. For me, the best retailers will always have the consumers at the forefront of their mind saying: ‘How can I make my service better? How can I deliver more value to my consumers?’ I hope that in the future, we will have more of a contract between consumers and brands where they're building trust, where using data is actually helping them.”
Now more than ever, brands need to be looking for ways to exceed customer expectations. Thanks to online marketplaces, even the smallest businesses have the potential to reach buyers around the world. This gives consumers more choice and raises the bar for brands of all sizes.
“I think we can see that this is an incredible industry, and the growth and the potential for it is massive,” explains Gillian Crawford, Sunday Times commentator, ecommerce entrepreneur, and chair of the British Association of Women Entrepreneurs. “What we saw in the pandemic was that it was brilliant for disruptor brands who were quick on their feet and able to get in there fast. They did a very good job of grabbing a bit of market share from some of the big brands, especially if you were a big brand, and you weren't quite as nimble as some of the smaller brands.”
Software as a Service (SaaS) platforms are also playing an important role in the world of commerce at the moment. These platforms, on which retailers and hospitatlity businesses operate, are in a unique position to support their users' growth by offering embedded financial services.
This is something Nathan Gill, chief product officer at cloud-based software provider Epos Now, sees huge potential in, as he explains in Episode 5:“Embedded finance goes beyond just providing a payment solution, but really providing a full banking solution as well,” he says. “Our software is the operating system that these merchants use to run their business. We already know a lot about their businesses and can make much more informed credit decisions than a traditional financial institution can."
Digital transformation isn’t slowing down, it’s seeping even further into the physical space as new technologies become available. With each new arrival comes opportunities to make a bigger impact, explore new areas of growth, and strengthen your relationship with your customers.
To hear more about the areas we’ve covered, listen to our full podcast Beyond Retail, available on Spotify, Apple, Google, or wherever you get your podcasts. The series was underpinned by the findings from our latest research report which you can download below.