After three tumultuous years leading to a very uncertain 2023, retailers are innovating in key areas to improve customer journeys with advanced data approaches and real-time payments.
These are among the findings from the study “Retail Payments Innovation Year in Review: How Real-Time Payments Drive the In-Store Customer Journey,” a PYMNTS and ACI Worldwide collaboration, taken from a survey of 300 retailers in the U.S. or the U.K. with at least 50 store locations and annual revenues over $1 billion for U.S.-based companies, or 100 million pounds ($127 million USD) for those in the U.K.
Looking at how U.S. retailers are innovating in 11 primary areas, the ability to track customers’ purchase history across channels was one of the most common. New payment channels and secure payments were also common areas of innovation.
As the study states, “Large shares of U.S. and U.K. retailers are interested in leveraging payments innovation, such as those involving data tracking and analytics, to attract new customers (64% and 58%, respectively) and improve customer retention (62% and 64%, respectively).”
The difference is that firms are far more likely to plan to develop purchase history tracking capabilities in-house while outsourcing work on payments innovation.
In all, three-quarters of retailers cited better customer experience as a reason to implement digital in-store tools, while 31% said it was the most important reason. Another 63% cited convenience as a motivating factor, with 13% calling it the most important factor.
In customer data and analytics, 48% of retailers are already launching such innovations, with 25% more U.S. retailers expecting to continue this focus over the next 12 months. However, only 34% of U.S. retailers have thus far introduced advanced data analytics innovations.
In terms of payments, we found that 21% of U.S. retailers have implemented a scan-and-go experience, for example, and 33% are planning to add support for real-time payments. Per the study, “real-time payments and loyalty programs are intrinsically linked for many retailers, enabling them to further engage with returning customers at the point of sale.”
It’s all part of the broader trend towards faster, more accurate digitization of various components among retailers as they serve more demanding consumers.
“Retailers can better engage digitally savvy consumers with a wider variety of ways to pay in-store,” the study states, “but this requires going beyond enabling standard contactless payment options, such as gift cards, QR codes or mobile wallets, and providing other frictionless payment options, such as scan and go options via the retailer’s mobile app and real-time payments at the point of sale.”
Get the study: Retail Payments Innovation Year in Review: How Real-Time Payments Drive the In-Store Customer Journey
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