As the president of North America for Adyen, Brian Dammeir is focused on bringing the company’s global payments solution to major retail, tech, platform, and hospitality companies — including McDonald’s, Uber, Spotify, Postmates and Gap. He oversees all North American operations including sales, account management, marketing and product development. Brian previously led product strategy as Adyen’s head of product and has extensive experience working across APAC, Europe and the Americas.
Dammeir honed his product mind-set with earlier stints at Airbnb and Google before joining Adyen in 2015. Here, Dammeir shares insights into consumer preferences born out of the COVID-19 pandemic, and what trends will likely remain over the next five years.
WWD: How has COVID-19 changed consumer preferences? What are they looking for in regard to the overall shopping experience?
Brian Dammeir: COVID-19 has shown that consumers strive to continue buying from their preferred brands even when they cannot visit stores. Importantly, and perhaps for the first time at any significant scale, this includes groups of people who previously only shopped in-store. This has had four primary effects:
1. A group of previously reluctant online shoppers have embraced the convenience and flexibility of e-commerce and alternative channels like curbside pickup. While many of these shoppers will revert to their previous behaviors after the pandemic, we expect many of them to maintain at least a portion of their online shopping.
2. Due to this, pure e-commerce players, ranging from marketplaces to direct-to-consumer brands, are seeing a substantial increase in transaction volume, as consumers move their shopping behavior online while traditional storefronts are restricted.
3. Traditional retailers are not standing idly by. Retailers with an in-store footprint who built up e-commerce capabilities over the last several years are seeing less impact than brands that did not, while retailers who were previously behind in digital transformation are catching up as we go into 2021. Consumers are still showing preference toward brands they trust, so the more retailers are embracing digital channels the less impact they are seeing from COVID-19.
4. Delivery and curbside pickup solutions, particularly around food and groceries but increasingly in retail, are showing more engagement outside of these channels’ traditional Millennial, urban demographics. This will have a long-term impact on the retail landscape, as many consumers will stick with these ways of shopping, having grown used to their convenience.
WWD: And what do they demand in regard to payment options?
B.D.: The biggest trend to come out of COVID-19 is toward making the shopping experience as “touch-free” or as “contactless” as possible. From ordering to interactions between customers and associates, as well as payments, the focus is on bringing social distancing to as much of the customer journey to meet this demand. Some more prevalent methods are touch-free payment options, including:
1. NFC contactless technology, which is primarily driven by contactless chip-enabled credit and debit cards. During the pandemic, interest in these methods has increased substantially. Prior to COVID-19, contactless enablement in the U.S., in particular, was behind that of other countries. Now the banks, consumers and merchants are keen on “tap and go” payments.
2. Mobile wallets such as Apple Pay and Google Pay, which leverage many of the same technologies as NFC card-based payments and offer a no-contact “tap to pay” experience, are seeing huge adoption as well.
3. Order-ahead with curbside pickup has become a must. Merchants with seamless in-app ordering experiences, in particular, are seeing huge consumer adoption.
4. QR codes, both as a payment method and as a check-out flow that lets consumers check out on their phone even though they are in a store or restaurant.
It has become clear that consumers still want to interact with their favorite brands, even during the pandemic. Merchants who have been able to provide alternative channels and ways of paying are finding that a substantial portion of their lost revenue is being recouped by these previously minority channels.
We expect this period to have catapulted already existing trends toward digital by five years or more. This is truly an inflection moment in terms of how consumers expect to be able to buy, and pay, with brands.
WWD: How does Adyen meet these demands?
B.D.: Adyen has been channel-agnostic from its inception and has been at the forefront of digital enablement for merchants, but also of technologies like NFC contactless, mobile wallets and QR codes. Importantly, Adyen maintains a single platform globally for all its merchants, so at the height of the pandemic we were able to simply “turn on” features that merchants needed to meet their customers’ demands. This is a stark contrast to legacy payment providers in which merchants had to ramp up monthslong projects to enable features like contactless or enable e-commerce channels.
Like our merchants, we had to work quickly to adapt, however. For example, we found that retailers had a need to present totally touch-free payment flows in their stores. Not all consumers have contactless-enabled cards or digital wallets, so we developed a QR-code solution for our merchants to present a payment to consumers that they could then complete on their phone. Once developed, this was available instantly to all merchants on our platform.
Lastly, Adyen tends to be central to the digital transformation that merchants are enacting in their own infrastructure. This embracing of “Unified Commerce” is about offering a consistent platform and experiences to customers regardless of channel. One thing COVID-19 did was challenge merchants to adapt to consumers rapidly adopting new, largely digital, channels overnight. Our focus now is on helping our merchants through this transformation, not only to adapt to COVID-19 and what it means now, but to also future proof for future consumer changes that will inevitably come.
WWD: What are your expectations for retail this year? What will change? What will stay the same?
B.D.: Last year was a year of change — consumers and companies had to adapt to keep themselves safe, and the payments industry was included in that. Based on what I saw in 2020, I would predict three main retail trends for 2021.
1. Digital channels will grow at unprecedented rates: While e-commerce and digital payments, in general, have been seeing growth for the last decade, 2020 forced huge swaths of consumers who were previously reluctant to interact with digital channels to do so. While many consumers will go back to their previous behaviors from before the pandemic, COVID-19 will have catapulted large groups of people to use digital services as their primary channels.
2. Contactless, “tap to pay” payments will gain traction in the U.S. The U.S. has been behind other countries in their adoption of two important technologies: EMV chips, which protect your card details, and NFC contactless-enabled cards, which enabled consumers to “tap to pay” with cards and digital wallets. With the pandemic and sanitation concerns, large numbers of consumers are being educated on how to use “tap to pay” cards, which is not only safer, but results in much quicker transactions than dipping a card. Consumers are liking what they are seeing and will demand “tap to pay” going forward.
3. QR codes will become mainstream in the West: QR codes have been the main way consumers pay in countries like China for years. The pandemic has seen a huge increase in the use of QR codes across the board, because they enable consumers to use their own phone. Everything from restaurant menus to paying are being done with QR codes. We even see the beginning of payment methods in the U.S., such as PayPal and Venmo, choosing QR codes as the way to initiate payments, much like in China today.