For a minute there in 2020 and 2021, it seemed like most retail stores might be turned into indoor playgrounds or just abandoned because in-store shopping was over — except it isn’t. Stores have come to embody the “whatever doesn’t kill you makes you stronger” ethos.
So strong is the attraction to in-store shopping that the digital infrastructure put in place during the past two years is now being re-tasked to make digital a part of the in-store experience. Through this, patterns are emerging across entire economies showing how the digital and physical complement each other.
Saying this shift was already in motion before the pandemic hit, Andre Machicao, senior vice president, merchant solutions at Cybersource, a Visa solution, told PYMNTS’ Karen Webster the omnichannel movement was “hugely catalyzed” by the global health crisis. Now, it’s part of everyday life.
COVID-19 appears to be in retreat, but the digital shift it forced isn’t going anywhere. What it has done is create a new set of experiential challenges for merchants.
“As consumers are returning to the in-store environment with that expanded set of [digital] experiences, use cases and digital community, we are seeing expectations of digital even more now in physical stores,” Machicao said. “It’s the convergence of experiences where I would start my transaction in one channel and complete it in another. We are seeing that expand and proliferate.”
Discussing key findings from “The 2022 Global Digital Shopping Playbook, U.S. Edition,” a PYMNTS and Cybersource collaboration, Machicao noted that only 28% of U.S. consumers are using smartphones to navigate brick-and-mortar experiences, calling it “relatively low compared to some of the other countries in the global study.” However, where it is happening is improving consumers’ satisfaction with the store shopping experience.
Get the study: The 2022 Global Digital Shopping Playbook, U.S. Edition
Unpacking that, however, he said the reasons mostly tie back to U.S. retailers having done a great job of melding channels during the pandemic to a more advanced state.
“With the more mature digital commerce market that the U.S. is, I think U.S. retailers in general were earlier to create those more integrated experiences,” he said. “They’ve done a good job with that in-store environment.”
BOPIS Makes the Case
How U.S. retailers have outpaced other nations in blending shopping experiences from early in the pandemic is a factor of the way mobile is being used to navigate and improve omnichannel.
Machicao believes there are more connections yet to create, and the infrastructure is in place.
He told Webster that because U.S. merchants did solid work bonding payments capability and infrastructure for more integrated omnichannel experiences, there’s an opportunity “to benefit from having the mobile experience more integrated in-store … not just to allow for comparison shopping, but really leveraging the full power of real-time connectivity.”
“This is an interesting one to watch,” he said. “The benefit of doing these [Global Shopping Index] studies on a repeat basis is we can see more of the trend line. I fully expect that [mobile] metric is going to continue to scale as we see the channels further integrate and blend in the forward look.”
Among the most telling reasons why retailers keep investing in facilitating omnichannel shopping is the power of the impulse add-on purchase — a superpower of physical stores.
“The 2022 Global Digital Shopping Playbook: U.S. Edition” also found that 47% of consumers who pick up in store also make a companion purchase during that trip. Machicao called it “one of the biggest takeaways and insights just in terms of the continued trend.”
Saying that “U.S. retailers have really leaned into creating those experiences that take advantage of the best of what remote and digital have to offer, and what in-store has to offer,” Machicao said it comes down to “commerce experience, not just fulfillment, which is helping to boost those metrics of getting additional purchases coming into the store and supplementing that.”
U.S. retailers are seeing ROI on pandemic infrastructure investments that help with a “360-degree view of the consumer, which has been challenged for many organizations for such a long time. It’s a big component driver of that enablement, and with that foundation, we’re going to continue to see more.”
See also: The Data Point: 28% of US Consumers Used a Mobile Phone During Last Store Trip
Finishing What We Started
With up to 10 years of digital commerce advancement packed into about 26 months, lots of kinks remain to be ironed out as retailers and payments partners optimize for the now.
As much as consumers are responding happily to omnichannel experiences — particularly buy online, pick up in store (BOPIS) — those experiences need constant refreshing and attention.
“Organizations that are really delivering on consumer expectations are looking at their assets, their capabilities and transforming that into how they can add the most value,” Machicao said.
He added that “just having that curbside pickup and click and collect, that is what the consumer wants. They want to be able to get in and get out, have that pre-order, and those organizations that are being successful are aligning to that.”
While that works well for grocery and its generally high in-stock status on merchandise, it slows in retail channels where certain items are not in stock and require ordering and waiting. This is the antithesis of what eCommerce has trained consumers to expect during the pandemic.
In these cases, he said, more U.S. retailers “not able to do the fulfillment in store in that short window of time [are] leaning more on some of that companion experience capability. That is what’s driving the value for the consumer to come in store.”
Another prime learning of the pandemic is how payments options drive conversions online, which can lead to companion purchases at pick up in a virtuous circle of selling. That’s good, but retailers still have work to do to close the loop on payments choice as part of the end-to-end shopping experience designed to satisfy.
“This is just a one example of where, in general, with this growth of choice, not just payment method but the channel of interaction and the mode of interaction, it’s driving a lot more complexity for merchants to be able to meet that in the context of payment method,” Machicao said.
Agility in technology gets critical here because, as he told Webster, it’s “fueling this trend to payment services on demand where organizations five, 10 years ago would’ve invested in having that infrastructure in-house are now seeking that in a provider who can just enable payments as a service. That allows them to focus on experience and not have to pick winners.”
“We’re seeing that as incredibly important and it is driving more insight, more intelligence, and the results are more conversions, which is great,” he said. But it doesn’t stop here.
Those that digitized and went head-first into omnichannel early are reaping the dividends. Others that were slower off the mark are playing catch-up, and the clock’s ticking.
Machicao said many retailers “have different infrastructures across different channels. Those different channels grew up in different eras, so they don’t talk with one another.”
“Creating that truly integrated experience where digital in the physical environment is fully integrated has been difficult,” he continued. “But it is the catalyst of driving to us more modern payments infrastructure and services on demand. That is the needed vehicle for creating new payments experiences where they’re able to bring the best of both worlds in one environment.”
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