Ecommerce is booming. But how can brick and mortar retailers stem the flow online or at least participate in it? Susanne Steidl, CPO at digital payments provider, Wirecard, thinks it’s a matter of keeping pace with Generation Z by integrating payments deeply with the customer experience.
Ecommerce is set to account for almost a quarter of all retail spend in the UK in 2020, and it’s well documented that the high-street is struggling to compete with online retailers. The British Retail Consortium (BRC) has even called 2019 the worst year on record for retailers. Bricks and mortar stores, therefore, need to differentiate themselves, add value and create a more human experience to entice customers back.
With the payment transaction playing such a big part of the in-store experience, some of the biggest changes and innovations are going to be seen in payment options within the next decade. Statista estimates that by 2023 there will be 1.31 billion proximity mobile payment transaction users worldwide (mobile payments where the device is physically present in-store), a significant increase from 950 million users in 2019. This shows a clear appetite for alternative payment methods.
The rise of mobile banking combined with the rapid pace of technological change in the past decade has resulted in a wide range of digital payment options. Ideas which once would have seemed farfetched have become reality. But we’ve only scratched the surface of what’s possible.
In the near future, payments will become a frictionless and even invisible part of the shopping experience.
So, what can retailers do to stay ahead of the curve and which technologies should they be adopting to ensure they’re prepared for the upcoming decade?
Payments and the customer experience
The keyword shaping payments in the next decade is “integrated.” Right now, that means keeping payments on-brand and consistent across channels. But in the near future, flexibility around payment along the customer experience will explode. For example, technology that lets customers pay in the changing room – or automatically, as they walk out of a store – will likely become an everyday reality.
Driving this trend is the fact that consumers increasingly expect unified commerce, the connection of customer data across all sales channels from online to in-store. For younger shoppers who grew up making mobile purchases and repaying friends with P2P apps, their expectations will be even higher in the next decade. To keep up, payments companies and retailers must enable a payment experience that is truly barrier-free.
That includes integrating the best of both worlds: e-commerce and physical retail spaces. In the near future, payments will become a frictionless and even invisible part of the shopping experience, which could free up retail workers to serve in more consultative roles and make them more focused on customer advisory. That means more customer engagement and less time spent on POS payments: a move toward reshaping brick-and-mortar retail for consumers that have plenty of options for when, where and how to shop.
Payments blended with customers’ everyday lives
Digital technology has made payments faster than ever, and the next decade should herald a rise of payments that blend seamlessly with customers’ everyday lives. New developments in biometrics and voice payments, as well as payment integration in entertainment and media, have already transformed the shopping experience.
Consider popular online or mobile games where players can make rapid in-game purchases to upgrade the gaming experience on the fly. That concept could soon be the norm in other areas of life – from grabbing a snack at a convenience store to making a purchase from a pop-up shop at a community event.
The rise of social commerce, which blends e-commerce and social media, has made payments even more customer-centric. Social media sites such as Pinterest and Instagram now enable users to buy clothing and other goods they see featured in posts. This shortens the path from inspiration to purchase, boosting the impact of every share. For retailers, that means more opportunities to increase brand engagement and sales.
The growth in social commerce is also reflected in the introduction of new features to social platforms such as ‘Shop the Look’ Pins on Pinterest, and shoppable stickers for Stories on Instagram. Since social platforms have begun launching checkout features to make transactions even simpler, the next few years should come with an uptick in on-the-spot payments. This calls for advances in security, as well as payment providers who understand the growing complexities of digitally enabled commerce.
Gen Z and the payment (R)evolution
These trends are especially important as Generation Z (defined as those born between 1996 and 2010) come of age. While millennials are the internet generation, Gen Z is the always-connected generation. These digital natives crave high speed and instant results and prefer digital wallets – 61% of Gen Z consumers worldwide use their phone to purchase products online. This will motivate traditional players to enhance their mobile offerings over the coming years.
Generation Z will be instrumental in shaping a world where paying comes with zero hassle or deliberation – whether that’s over a mobile app, via a digital assistant, on a social media site, or at brick-and-mortar locations.
Susanne Steidl, CPO, Wirecard