Businesses around the world are in the midst of an intense period of transformation. Not only are consumers taking charge of where, when and how they shop, but the rise of automation is having a profound impact on how businesses engage with their customers.
A recent study by Deloitte argues that “few times in history” have such rapid advancements in technology had the ability to disrupt retail business models in “such fast and all-encompassing ways”.
To avoid being overlooked in the race for relevance, businesses are under no illusion that they will need to refresh traditional business models to ensure they meet the needs of today’s empowered consumer.
The average consumer now has more choice than ever – according to industry experts, consumers have global access to more than one billion products. So what do today’s merchants need to focus on to better serve more demanding shoppers and succeed in a time of unprecedented change
1. Prioritise the experience
The rise of digital commerce means that merchants can now connect directly with consumers like never before. Today many businesses are global and multi-channel from the start. With an unlimited range of options at their fingertips, the consumer can be increasingly fickle.
They are quick to move on and hesitant to come back if their experience, on any channel, and from anywhere, is anything but fluent. Digital interactions and engagement underpin much of their daily lives, and consequently, consumers bring the same expectations to online shopping.
Slow load times, overly complicated navigation, and difficulty viewing or comparing items are all areas which can prevent purchases and erode customer loyalty. A seamless experience is no longer a ‘nice to have’, but an imperative. This is why many businesses have turned to new digital tools and technologies to keep pace with customer expectation.
Digital tools allow businesses to listen to their consumers, understand their motivations and align their buying experiences with consumer lifestyles. Whether it’s the ability to make in-app purchases, receive a transaction notification or arrange tickets and taxis to an upcoming event, merchants need to ensure they provide intuitive, flexible experiences that are relevant to their customers at the point of their need.
2. Contextual payments as standard
Better customer experience is essential in the current retail landscape. The shopping journey and pre-shopping journey is an inter-operable process with consumers constantly switching and changing between online and offline in the path to purchase. Merchants must be active and present across all channels, regardless of where the transaction takes place.
With customers showing up across multiple channels this means businesses can connect with their consumers at each point of their purchase journey, including the point of intent – whether that’s when browsing social media, messaging friends or completing an in-app transaction.
What’s important to understand is that contextual commerce is not something merchants can simply add onto their current strategies. Businesses need the right payment partner and infrastructure tools – including secure and shared vaulting capabilities and revocable payment method access – to make it easy for consumers to safely complete transactions without leaving the site or app.
Consider travel search engine Skyscanner: the site now offers consumers the option to book directly with participating airlines via the site, which integrates Braintree’s “Extend” technology. Participating airlines saw an increase of 20% in flight booking conversion and up to 100% increase in ancillary purchases.
3. Reduce friction
Cart abandonment is a recurring issue in the retail environment, particularly when browsing for goods online and on mobile. Successful conversion often hinges on speed and convenience, with recent studies suggesting that even just tenths of a second of delay in load time can hurt conversion rates by as much as 7%.
When it comes to e-commerce platforms, removing roadblocks to transactions is vital. Consumers need to be able to navigate easily between each channel to find their desired items and purchase them within seconds. PayPal One Touch, for example, makes it possible even for first-time customers to progress their transaction quickly and easily across an array of devices at the single tap of a button/screen.
In this way, businesses can remove for the need for repetitive tasks for their customers such as inputting personal details to pay each time. Commitment to a seamless check-out experience also leads to successful conversion rates with a recent study by comScore finding that PayPal checkout converts at 88.7%, which is 82% higher than a checkout without PayPal, and 60% higher than other digital wallets, further indicating the importance of removing obstacles from customer purchasing journeys.
4. Embrace data
According to Accenture research, 39% of UK consumers would be happy for companies to access their personal data via smart devices to create a better experience or financial reward tailored to them. The ability to turn customer data into intelligent and actionable insight presents merchants with a great opportunity, often leading to incremental new revenue streams.
For instance, take Bandsintown, a music artist- and performance-discovery platform that connects to various ticketing companies through payments powered by Braintree. Users can discover and select shows and purchase tickets end-to-end without having to leave the Bandsintown platform.
5. Communicate transparently
Consumer trust is the true currency in the retail landscape where price comparison is relatively easy. Those businesses who show inefficiencies in communicating areas such as pricing and shipping costs risk losing business from today’s discerning customer, and often score poorly on the customer experience scale.
Fees, taxes, shipping and customers’ duties must be visible from the outset if businesses want to reduce cart abandonment, with many customers likely to cancel a transaction due to unforeseen additional charges.
Looking to the future
Across the retail sector, traditional business models have given way to unprecedented change, with the ever-connected consumer more empowered than ever to drive innovation and new behaviours.
As businesses adapt to this era of dramatic change, only agile businesses, ready and willing to build new experiences that align with the needs and expectations of their customers, will succeed in the race to stay relevant.
David Nunn is the head of Braintree Europe. He is responsible for Braintree’s growth across Europe. Braintree, a PayPal company, is an industry leading online and mobile full service payments platform powering the best-in-class next-generation purchasing experiences globally.