Easier payments and smarter customer data use will anchor the retail industry’s experiential modernization efforts.
This, as new PYMNTS research involving major retailers shows a reprioritization of resources toward more seamless omnichannel experiences, especially the largest players.
According to “Navigating Big Retail’s Digital Shift: The New Payments Strategy Evolution,” a PYMNTS and ACI Worldwide collaboration, the “retail 3.0” movement is in full swing as merchants mine consumer shopping and spending data to reshape retail experience.
“More than 66% of retailers are shifting resources toward more convenient payment options and a broader range of payment choices,” the report found, while also revealing that 30% of U.S. retailers and 37% in the U.K. were also seeking “the right mix of digital tools to meet their customers’ experience requirements.”
The report looks at both “needs” — such as frictionless checkout and the most popular payment methods — and “wants” as expressed in an analysis of retail shopping data, including more strategic use of QR codes, mobile apps, and increasingly, real-time payments.
Per the study, 70% of executives surveyed believe that “preferences for specific conveniences may lead consumers to favor one merchant over another,” a reality that many industry executives surveyed saw as an indication that consumer loyalty, going forward, will be “highly dependent on these key features in-store.”
Consumers are expressing greater interest in features including mobile shopping apps (81%) and alternative payment methods like buy now, pay later (BNPL), at 76%. Retailers are scrutinizing payment patterns, eCommerce cart and checkout behaviors, and related metrics to key in on the features most likely to cement loyalty and increase average order volumes (AOV).
Get your copy: Navigating Big Retail’s Digital Shift: The New Payments Strategy Evolution
Third Parties Help Speed Modernization Efforts
The report advises retailers to imbue modernization roadmaps with specific payment types that are proven to better shopper experience, noting, “Most retailers are developing new ways to access omnichannel customer data. While retailers can use this data to gain insights into customer product and service preferences, it is also essential for retailers seeking to identify areas where they might remove payments friction.”
What merchants are finding as they perform these audits is that purpose-built third-party tools and platforms offer a more fully developed alternative than in-house attempts at DIY modernization.
Specifically, it states, “Retailers with legacy technologies may lack the ability to accept and manage new payment types, which is critical to developing new tools. In this case, it may be helpful for retailers to consider a third-party solution.”
That process involves evaluating the performance of digital and in-store experiences for the level of frictionless offered at checkout, payments option presentment difference between in-store and online channels, and whether current data security is interfering with these efforts.
As to divining which payment methods see growing demand and which are waning, the report finds that BNPL, QR codes and gift card acceptance are three areas needing improvement, although real-time payments and digital wallets — specifically Apple Pay — are vital to the mix.
See it now: Navigating Big Retail’s Digital Shift: The New Payments Strategy Evolution
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