Does mobile payment really drive retailer sales?

"The customer experience is more important than products and prices"

"Shopping experiences that combine convenience, context and control will be decisive for the success of retailers in the future," says Alexa von Bismarck, Germany boss at the payment provider Adyen, in an interview. But even the smallest complications can put the customer off. So what to do

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Retailers observe that the shopping channels are merging more and more. Can this change be quantified?

Alexa von Bismarck: Retail is constantly evolving and is driven by technological competition and customers who want holistic and convenient shopping experiences. Retailers today need to have a thorough understanding of who their customers are and what they really want in order to increase their sales and strengthen customer loyalty. In conversations with retailers, we see that awareness of the merging of sales channels has risen sharply in recent years. There are already a few successful examples such as Rituals, Nike, Swarovski, etc.

Alexa von Bismarck is Country Manager Germany of the global payment service provider Adyen and has been with the company since 2013. Before that, she headed the account management team for four years. Before moving to Adyen, Alexa von Bismarck was largely responsible for product management and the existing and new customer business at various payment and finance companies. She completed her diploma in business administration at the Technical University of Berlin.

The trend is also confirmed in our annual retail survey together with the independent survey institute 451 with 2,500 retailers and 6,000 consumers: The global sales potential through unified commerce amounts to 2.9 trillion euros, in Germany to over 63 billion euros. Merchants in Germany lose 48 billion euros due to lost sales opportunities, e.g. due to a lack of product availability, complications in the checkout or a lack of necessary payment methods. The connection of sales channels in turn also opens up new sales opportunities, e.g. through cross-selling and personalized offers. The report puts the new sales potential at 15 billion euros for Germany.

Where is this “unified commerce” particularly noticeable?

Alexa von Bismarck: Basically, the standardization of shopping channels is of interest to all retailers who have several sales channels, for example an online shop, shops or an app. We see a lot of movement there, especially in retail, but so-called quick service restaurants and hospitality sectors are also catching up in this regard.

What does the customer expect?

Alexa von Bismarck: Connected customers place higher demands on retail than ever before. You expect shopping experiences that offer added value. Our survey shows: 84% of retailers see an increase in customer expectations, which essentially focus on the following three factors: convenience, context and control. Consumers want fast and uncomplicated shopping experiences. You want to discover offers that are relevant to you and shop as efficiently and safely as possible from anywhere.

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Today consumers want to determine the interactions with the retailer themselves. Media used in everyday life such as messaging apps and social networks also play a role. Shopping experiences that combine convenience, context and control will be critical to the success of retailers in the future. Unified commerce strategies are therefore aimed at fulfilling customer expectations, which in the age of user experiences is a prerequisite for gaining and strengthening customer loyalty.

Changes are always opportunities. Where does retail have to do its homework now?

Alexa von Bismarck:Retailers who opt for unified commerce have to deal with the digital transformation in order to exploit untapped sales potential. The development of networked, personalized shopping experiences requires commitment and the will to bring together technological systems and processes - and often also to modernize them.


Mobile payment - this is how it works at the bakery too

When shopping in brick-and-mortar stores, customers expect the convenience and quality that they are used to online. This also includes cashless payments. What has long been commonplace in other countries is slowly becoming more and more popular in Germany. Whether with a card or smartphone: Technological developments make paying easier, more convenient and faster. Read more

If a retailer's e-commerce platform cannot communicate with its POS software, for example, important insights into the cross-channel buying behavior of a shopper are overlooked and opportunities for interaction are wasted. Bringing the customer journey together is about more than just keeping up with the latest trends. Enabling consumers to switch effortlessly between sales channels creates numerous opportunities for relevant interactions and can increase customer loyalty.

What could a better shopping experience - online and offline - look like?

Alexa von Bismarck: The customer journey can encompass various potential sources of conflict online and offline, which not only result in dissatisfied customers and reduced loyalty to a retailer, but can also cause significant sales losses. The reason is often a gap between different sales channels with separate data reservoirs and processes. This separation prevents the personalized, smooth experiences that customers want.

"Bringing the customer journey together is about more than just keeping up with the latest trends."

A simple example: in our survey, 40% of consumers said that being able to order and pay for unavailable items in-store and then have them delivered to their home would motivate them to do more in-store purchases. 51% even say that being able to check product availability online before visiting would increase their loyalty to a retailer.

The use of cross-channel technologies that complement the in-store shopping experience takes into account the consumer's desire for immediate needs satisfaction. When shopping, consumers don't think in terms of categories like sales channels. At the moment, however, 74% of the retailers surveyed do not yet support the option of ordering unavailable items in the store, paying for them and having them delivered to your home, e.g. in the form of the so-called endless aisle.

Which approach do you think is particularly promising for the improve cross-channel shopping experience

Alexa von Bismarck:Unified Commerce is a paradigm shift in both strategy and technology. It requires the retailer to make a clear decision in favor of customer-oriented digital transformation at all levels. This also means that new competencies and new resources have to be created in order to merge internal data silos and change operational processes.


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How the check-out can boost the conversion rate

The customer is convinced of the product, price and delivery conditions, and the shopping cart in the webshop is full. Now it's time to check out - and the deal is busted. Happened far too often because retailers ignore customer requests when it comes to process systems, web design and payment mix. Read more

Implementation is not always easy, which is why we recommend retailers to analyze their current customer journey and identify potential points of conflict, which the report highlights in detail. Everything that stands in the way of a smooth transaction is ultimately a risk for the purchase to be abandoned. Even seemingly minor complications like unavailable payment methods or long queues can have a huge impact on sales and customer loyalty.

One of the pain points is still the check-out, the cash register. Maybe even more in the store than in the web shop. What does it take for a consistently smart check-out?

Alexa von Bismarck: A typical point of conflict in the store is long queues. 70% of consumers left a store and didn't buy anything due to long waiting times. Such canceled purchases result in a potential loss of 322 billion euros worldwide each year. Generation Z (18-24 year olds) is the group of consumers who are most likely not to make any purchases at all when faced with lengthy waiting times.

Efficient sales processes, for example through self-checkout systems in the store or sales staff equipped with mobile payment terminals, are also noticeable in customer satisfaction: Almost a third of the consumers surveyed stated that they would be more willing to shop in the store if they were automatically at the Leaving the store could pay instead of at a traditional checkout counter. 41% say that fast, no-queuing transactions would motivate them to buy from a particular retailer rather than another.

What else would have to happen in order to offer an optimal customer experience in the (online) payment process?

Alexa von Bismarck: In our survey, we found that 70% of customers abandoned an online purchase due to complications in the last six months, resulting in 292 billion euros in lost sales potential worldwide. This is mainly due to two core problems: lack of support for mobile devices (keyword: mobile-optimized websites) and payment forms without the autofill function. Returning customers find it annoying to re-enter their details.

"Almost a third of the consumers surveyed said they would be more willing to shop in-store if they could pay automatically when they leave the store rather than at a traditional checkout."

One solution to this problem would be, for example, the option of allowing customers to pay securely online or in-app with 1-Click using tokenization, which is currently only offered by 32% of retailers. We also found online that over half of the respondents abandoned at least one online purchase in the past six months because their preferred payment method was not offered. The lack of preferred payment methods is a problem, especially for international customers, and our report shows that over half of all consumers surveyed made purchases online from a retailer from another country, which underlines the global nature of e-commerce.

The changeover is usually associated with costs. Is it worth the investment?

Alexa von Bismarck: With a sales potential of over 63 billion euros in Germany, the relevance of a unified commerce strategy is beyond question. Nowadays, the customer experience is the decisive success factor in competition, even more important than the actual products and prices of a retailer.

Does this mean that payment is also a competitive factor?

Alexa von Bismarck:Absolut.Payment is an important factor in creating a positive shopping experience, but this area in particular often leads to complications and points of friction. Fast and flexible payment options can not only increase the conversion rate, they also strengthen customer relationships. Our study shows that merchants who prioritize the support of various payment options (for example, who consider it very important to support innovative and all payment methods requested by the customer) are also ahead of their competitors in other areas for which the topic of payment is currently not a strategic one Has priority. Payment is therefore not a means to an end; it should be part of the corporate strategy. In addition, a central insight into the area of ​​payment helps merchants to minimize costs and complexity, to recognize patterns in the shopping behavior of their customers and to combat attempted fraud more effectively.

And the future belongs to contactless payment methods?

Alexa von Bismarck: In the past six months, 46% of customers were unable to use their preferred payment method in the store, whereupon they completely abandoned their purchase. In Germany alone, an annual sales potential of 4.6 billion euros is given away. Younger consumers in particular (Generation Y and Z) are more willing to use digital payment methods.
The surveyed consumers of all age groups stated that card payments are 47% their preferred means of payment for everyday purchases in the following weighting: debit card 23%, credit card 17%, contactless cards 7%. Cash is the second most popular payment method with 40%, followed by contactless wallets like Google Pay and Apple Pay with 6%.


What can the data do to better understand the cross-channel shopping customer?

Alexa von Bismarck: Using data to plan business strategy is not really a new approach. Payment data provides retailers with valuable information about their customers and their purchases in real time - for example, to recognize and understand how certain customer segments are shopping or how high the average purchase value is online or in store, for example, and which initiatives have a positive effect on customer loyalty impact.

Stationary retailers can use payment data to analyze the performance of an individual branch and recognize how many new or returning customers the business is attracting and which returns or refunds can be expected. In addition, branches can be grouped according to a number of performance drivers: Shops with similar performance profiles are suitable for A / B tests on interior design, offers or innovative facilities, such as self-service terminals. Branches with different profiles can mutually benefit from insights, such as how to increase sales with fewer visits or create exciting experiences for particularly well-visited locations.

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The future of mobile payment is already part of everyday life in China

The mobile payments market is a growth market. Globally, McKinsey estimates it will rise from $ 1.9 trillion in 2017 to $ 3 trillion in 2023. Smartphones and technological developments, which are making payment easier and more convenient, are among the driving forces. If you want to see the future of mobile payment, you have to go to China, where mobile payment is more popular than anywhere else in the world. Read more

With payment data, retailers are also able to easily determine the ideal distance between shops and thus better decide where to expand their presence. The shipping addresses stored in the online shop show retailers where their customer base lives. This helps in deciding where further branches or distribution warehouses should be opened; for example, a test can be started with pop-up stores. This ensures that the right inventory and the right payment methods are available.

Payment diversity is best managed using a uniform platform. What advantages does it bring beyond the customer journey? (KeywordFraud management, etc) 

Alexa von Bismarck: In every market traders operate in, they face many decisions: Who should handle risk and fraud issues? Which partner do you want to use as an acquirer or payment gateway? Many parties involved in payment processing add complexity. Unified solutions, on the other hand, ensure consistency and simplify the operational and technical setup enormously.

For merchants who are active in international markets, payment costs can add up quickly, for example FX fees, scheme fees or other items for card terminals and other hardware. Maintaining an overview also costs time, which retailers can better invest in their core business. A uniform payment platform brings that along.

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