Changes in consumer behavior (and expectations) along with new technologies are reshaping the retail landscape and companies are responding by deploying omnichannel strategies.
But from a payments perspective, what does that really mean? Payments technology firm Adyen commissioned Edgar, Dunn & Co. to study the issue, and in a just-released research paper on the topic, the company identified several case studies in the market as well as best practices that retailers can incorporate into their strategies.
The cases include the notion of an “endless aisle” where shoppers purchase out-of-stock goods — especially apparel — while in the store via a kiosk or tablet equipped with a credit-card-accepted mobile point-of-sale reader. Other cases, which were based on interviews with merchants, include one-click omnichannel payments, buy online and pick up in store, omnichannel returns and the adoption of “future pay” methods such as mobile wallets and payments through social media.
Regarding the “endless aisle” trend, the researchers examined retailer de Bijenkorf. The department store has in-store kiosks, which the goal of which are to streamline the shopping experience. In this case, shoppers are “guided” by a sales associate through the ordering and payment process, which includes authenticating the sale. Fulfillment can include next-day delivery to the shopper’s home or to a “network of collection points.”
The financial benefits include reducing the out-of-stock rate, which can result in a 4 percent decline in sales, the researchers said.
For its “buy online, pick up in store” case, the researchers looked at Zara. Here, the company created an e-commerce platform not as a “stand-alone channel” for the retailer, but as a “support channel,” the researchers noted. As such, the “click and collect” method is provided for free and items can be picked up from stores in about two days. In separate reports, analysts estimate between 50 and 60 percent of consumers participate in a “click and collect” transaction at least once a year.
Regarding best practices from a payment perspective, the researchers noted the importance of making the payment step “as frictionless as possible.” An example would be for retailers to offer “one-click” functionality. Doing so creates a more “seamless customer experience,” the report noted, adding that it would require preloaded and secure payment information.
Also important is to make sure that payment-acceptance policies match the channel preferences of consumers. “Merchant interviews have confirmed that consumers use different channels at different times for different purposes, and therefore it makes sense to think about what payment methods will be the most convenient in order to offer the best experience for customers in each situation,” the researchers stated.
Other best practices include training staff to better assist shoppers with new technologies, testing technologies before adopting them, considering centralizing payment functions in an organization and adjusting fraud prevention measures as needed, among others.