Retailers shouldn't fear payments innovation, but they can't ignore it
The transition from cash and checks to cards to PayPal, Venmo and Apple Pay to mobile and IoT has impacted a number of industries—but particularly retail. Not only have retailers had to implement a digital strategy to accept payment via the internet, but they’ve also had to adapt their brick-and-mortar stores to meet customer demands for mobile payment options. With this trend expected to continue, how can retailers adjust further to maintain a positive customer experience?
Today, 5 billion people around the globe have a mobile connection, and that connectivity is affecting every industry. In retail specifically, mobile has influenced buying habits, customer service tactics and now payment options. Mobile payments are predicted to reach $282 billion by 2021. While customers may still load a cart and perhaps stand in line, the increasing use of mobile platforms like Apple Pay, Android Pay, PayPal and Google Wallet will continue to take the actual purchase experience from analog to digital.
Will this shift prove positive for retailers? As usual, the answer comes down to preparation. With consumers trending toward mobile pay, retailers who take proper measures to ensure things like a secure mobile payment experience will enjoy a competitive advantage—and likely greater revenue. Mobile payment users typically spend twice as much as those who use traditional payment options, and are 89 percent more likely to recommend a brand after a positive mobile experience. If you’re a retailer interested in taking advantage of this trend, time is of the essence.
What’s one thing that everyone wants out of their shopping experience? Convenience. Scan-and-go takes the convenience of mobile payment to the next level by eliminating long waits in line. Using scan-and-go, customers can track their spending and add up selected items while shopping, so when they reach checkout they’re done with a click or a swipe. Retailers such as Walmart have begun beta testing scan-and-go to improve the customer experience—a key factor in purchase decisions. And it’s been so far, so good for Walmart-owned Sam’s Club, whose scan-and-go user base doubled in the last year.
Imagine walking into a grocery store, putting items in your bag, and then just walking out. Shoplifting? Petty theft? Typically, yes. But at an Amazon Go store, this is completely acceptable. Six in 10 consumers find the current retail shopping experience full of friction and anxiety. Sensing the need, Amazon created their Amazon Go stores to eliminate this common pain point.
How does it work? When shoppers enter the store, they scan their Amazon Go app containing their credit card information. Throughout the store, cameras monitor customers, track when items are placed in their bag, and then charge the customer's Amazon account upon departure.
This type of payment is still in the early stages, and there are some questions retailers should consider before implementing a similar platform. In Amazon’s case, only Amazon members can shop at Amazon Go stores. By introducing this type of user experience, would you risk alienating potential shoppers? While this may be where the future is headed, the logistics and potential pitfalls of this type of service may require a longer look.
The future of payment is already drastically affecting the retail industry. While retailers will need to adapt their digital strategy yet again, this shift in consumer trends presents yet another opportunity for success.