The contemporary commerce experience has become an end-to-end, digitally seamless and frictionless experience.
Merchant payment capabilities need to keep up with, and even help push forward, this fast-evolving new normal.
Beauty and wellness businesses were among those to “shift rapidly to digital-first solutions” due to the pandemic, American Express Vice President of U.S. Merchant Marketing Tessa R. Dooley told PYMNTS, and their speed to integration offers clues for other sectors looking to provide customers with a modern, best-in-class experience.
“The resilience and innovation from merchants in this space is inspiring,” Dooley said, explaining that the beauty and wellness sector was hit particularly hard by the disruptions of the pandemic.
“Digital payment solutions helped them get through [the challenges of the past few years],” she added, emphasizing that not only are merchants within the industry well positioned for a full recovery, but they also have now laid the necessary future-fit foundation for long-term growth.
PYMNTS research in the May report “The Digital Transformation of Beauty and Wellness Services,” show that Dooley — and the beauty and wellness sector — is right on the money.
U.S. sales in the beauty services industry are already back up to around 70% of pre-pandemic levels. Considering that 26% of consumers plan to spend more money on their appearance this year than the last, those sales numbers are likely to continue to grow.
“The industry as a whole is on track for a full recovery, and if you look long term, a lot of this shift is being driven by a permanent shift in consumer behaviors towards digital channels,” Dooley said.
This ongoing shift is “creating new growth opportunities” across the industry, she said, as businesses increasingly look to take advantage of the diversified streams of revenue and customer acquisition opportunities digital channels can provide.
See also: Convergence of Beauty Services and Products Puts Spotlight on Partnerships
“The shifting consumer expectations are also having an impact in the B2B space,” Dooley said, noting that offering automated payment solutions gives many benefits to merchants — not the least of which is that nearly half of U.S. businesses that automated their payments during the pandemic are seeing improvements in terms of cash flow management and speed to payout.
“In the end, these automation tools are about allowing businesses to focus on doing what they do best while letting technology handle tasks like receiving payment for services or appointment scheduling and rescheduling,” said Dooley.
That’s because, while consumers are trending more toward digital experiences, the beauty services sector is built on in-person visits to nail and hair salons, and the physical occasion remains central to the industry’s value proposition.
“The frictionless experience is ultimately about making sure that the luxury of the service customers are receiving at the business extends not just to the service itself, but across all aspects of the experience end-to-end,” said Dooley, emphasizing that this full-spectrum journey requires a seamless checkout and payment occasion to truly bring it home in a way that drives loyalty and inspires repeat purchases.
“Merchants can realize a lot of untapped potential by continuing to uplevel their payments processes in line with the luxury and quality of the services they’re delivering to customers,” she explained.
Dooley said “paper-based payments and processes” will continue to fall out of favor as businesses modernize their operational systems to meet their clients where they are. Within its suite of solutions, American Express can tailor services for its customers, considering what industry a business is in, its size and what its needs are.
“Digital solutions have proven themselves and their value to customers,” Dooley said, adding that as more innovations go to market, the customer experience will only become more seamless and personalized, empowering merchants to acquire and retain customers more effectively.
One of the key benefits of digitization is the wealth of data it provides for businesses to mine for insights and inform their growth roadmaps.
“[Businesses] need to harness this wealth of data and analytics and feedback that’s newly available to them in order to find ways they can make better business decisions that help reach new segments and drive loyalty,” Dooley said.
Emergent tools like generative artificial intelligence (AI) and newly mature solutions like digital wallets can “enhance the customer relationship and close the feedback loop,” she said, as businesses increasingly migrate to a faster and more secure, as well as more cost-efficient, payment environment.
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