Deep Dive: Why Seamless Payments Are Key To Customer Engagement During The Pandemic

Keeping consumers invested and engaged is an eternal challenge for retailers.

Merchants must constantly reevaluate their customer-targeting efforts to suit the latest commerce developments, and many are pivoting from brick-and-mortar advertising to focus their outreach online or via social media channels.

The pandemic is accelerating this digital shift, sending merchants scrambling to meet consumers’ rapidly fluctuating shopping and payment behaviors. A MarTech Series report found that 60 percent of consumers have higher expectations of digital experiences since the health crisis began. Price and convenience remain top factors that can prompt consumers to try brands, but features like payment flexibility — allowing consumers to pay using their preferred methods — and speed are also becoming must-haves. Mobile wallets and contactless payments in particular are beginning to inspire loyalty and foster engagement, with 85 percent of consumers in an Inmar Intelligence study saying it was important for merchants to accept the methods at checkout.

Getting customer engagement right can also create key benefits for today’s merchants in terms of enhanced revenues and customer conversion. Eighty-six percent of consumers who reported loyalty to specific brands in one KPMG report said that they were likely to recommend these companies to family or friends. Sixty-six percent are more likely to write positive online reviews or social media posts about these firms, boosting their credibility among these users’ networks and driving engagement with new customers.

The following Deep Dive analyzes how and why consumers’ shopping behaviors and preferences are shifting and details how seamless payments can help merchants meet consumers’ needs and keep them engaged.

A Question Of Loyalty

The pandemic is increasing the financial pressure on consumers, prompting many to search for lower prices or more convenient shopping experiences. These trends are in turn ratcheting up the number of customers who are moving to new brands. PYMNTS data revealed that 47.7 percent of Generation Z consumers have tried out new retail brands since the onset of the health crisis, while 27 percent of baby boomers and seniors said the same.

Appealing to these customers requires comprehending what they seek from their retail relationships and what they feel brands must do to earn repeat business. Price and convenience are familiar considerations, with 66 percent of consumers saying in the KPMG report that value for the money they spent on their purchases was a top factor that could inspire loyalty and 55 percent saying the same about easy shopping experiences.

Generating loyalty also depends highly on consumers’ first experiences with brands, and one factor that can significantly affect them is the checkout or payments process. Seventy-nine percent of consumers in a separate study agreed that having a less-than-positive checkout experience would make them less likely to shop again with specific merchants, for example, and 70 percent agreed that the checkout aspect is the most important factor influencing how they view brands or retailers.

Consumers are also asking for more payment choice and speed when they consider making purchases, meaning the methods retailers support — or fail to support — can significantly affect loyalty. The Inmar Intelligence report found that 36 percent of consumers’ loyalty to their everyday stores changed due to online payments and options, such as being able to shop for brands via Instacart. Contactless payments in general appear to be having the most notable overall impact on consumer engagement.

Contactless Payments And Consumer Engagement

Contactless payments’ growth has been well-documented since the pandemic began, but contextualizing it within the scope of greater customer engagement may prove critical to helping retailers compete in today’s commerce space. Contactless payments — from QR codes to tap-and-pay plastic cards to mobile wallets — have experienced spikes in usage since the health crisis began. Mobile wallet adoption has risen by 11 percent since July, for example, according to the MarTech report. This trend also appears to be sticking, as 28 percent of consumers say that they would choose different retailers if theirs did not offer contactless options, according to the Inmar Intelligence study. General awareness of contactless methods has jumped 25 percent from 2019, and three-quarters of U.S. consumers are now familiar with them.

Contactless payments of all types are becoming familiar to consumers, but these payments often come with brand loyalty of their own. Eighty-seven percent of Apple Pay users are loyal specifically to the brand, according to a the MarTech report. The Inmar study found that 25 percent of consumers who are not using mobile wallets or contactless payments are only failing to do so because retailers do not support them.

These trends have intriguing implications for retailers. Consumers could become more loyal to specific payment methods rather than brands in the future, putting the merchants that do not support these methods at a distinct disadvantage. Retailers must therefore monitor consumers’ changing habits and determine what they really seek from their shopping and payment experiences.