Retail

Changing consumer behavior and payment habits - how can retailers keep up?

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Phoebe Lown
Phoebe Lown

Content Writer

No doubt, the last year has been a trying time for us all. With the closing of doors, empty streets, and wearing masks - a lot has changed. The industry that's bearing the brunt of the impact is retail. It's estimated that 2020 saw over a decade of change when it comes to the way we shop.

We sat down with Martine Berden, Head of Marketing and Communications at Payvision to discuss how consumer behavior is changing, the future of retail payments, and what retailers and merchants can do to keep their finger on the pulse of this rapidly evolving landscape.

What caught your interest in Payments and marketing?

Financial services, in essence, is an enabler for people to grow their business and by extension – you can see fintech in action every day. When you look at the developments in fintech, technology and innovation tend to move faster than consumer needs, which in turn influences consumer behavior. Personally, helping businesses keep their finger on the pulse between these two areas is an exciting area to sit in.

How would you say the payments world is changing?

The elephant in the room is that COVID-19 is drastically changing the way we pay, and we won’t be seeing a return to the ‘old normal’. Technology such as contactless payments were already becoming popular, but the pandemic is forcing it on people who were not naturally adopting this payment method by themselves. We can see this trend replicating across the board, with consumers trying new payment methods more than ever before.

If we look at Millennials and Gen Z, who now have more buying power, they’re more open to new models such as buying physical products on subscriptions because it creates an ease way to get things done. When consumers have a great experience at one retailer, they then expect others to keep up, such as offering one-click payments, stock levels, next-day delivery. Technology makes it possible, and consumers now expect it everywhere. Which can create problems for a lot of retailers to remain competitive.

With behavior and habits changing so dramatically over a short period, how merchants keep up with customer behavior evolving at such a fast pace?

Make sure that you regularly speak with your customers and understand why they shop with you. Ask a what they like from other stores that they shop with and take a close look at your competitors to see who is doing what well. Don't become complacent with what you're doing but keep investing and moving forward to. Prepare for the future by continuously taking steps, even if they’re small. By having a goal to add something new to digitalize your store ever year and adding easier ways to pay.

Do you have any advice for SME’s in particular?

Don’t sit and keep everything as it is based on your past success. SME’s have an advantage when it comes to branding and experience, there’s a reason why you have people coming to shop with you. So, ask them what they like from other retailers and try to replicate it based on what fits your brand.

I’d also advise to research what technology is out there, pick one and do it well. This could be anything from rethinking your payment models and offering subscriptions on your products. Or, always striving to have a richer experience on the shop floor and checkout like enabling frictionless payments, mobile scanning, digital price tags and automated pricing.

In the recent study where you examine consumer buying behavior during COVID-19 were there any surprises in the data?

What’s surprising is that 44% of consumers are unlikely to change their buying habits after the pandemic. We assumed that there would be a rush to get back to the stores, but it will take 3 to 4 more years for pre-pandemic footfall to return. From the survey we ran, the main driver for consumers to return will be for retailers to create digital experiences instore and blur the lines between online and offline experiences.

What payment trends should we be keeping an eye on soon?

Right now, the focus should be on offering frictionless payment experiences – this could even be as simple as scanning a QR code or allowing consumers to pay via mobile wallets. We all want to spend as little time a possible in the payment stage and this is apparent both on and offline. By reducing the time to purchase retailers will see their conversions rise and customers will be happy to come back for more!

And last but not least, where do you think the future of retail payments are headed?

Offering personal and convenient experiences are the pillars that retailers of all sizes will need to focus on in the long term. We like to see products with our own eyes and have the purchasing experience right there and then. However, merchants need to accept that we’ll never fully return to the ‘old normal’. In fact, now that consumers are more versed in digital experiences, which means consumers will have the freedom to explicitly choose which part of their shopping journey they want to perform online and for what part they want to go to a physical store.

The lines between online and offline will be continuously blurred and merchants will need to take a digital first approach in-store.

If you’re building this experience for your customers, it’s only logical that all your operations, reporting, logistics, and more are also connected – which can be done through an omnichannel solution. That way, you can keep your shelves stocked, let customers buy and return anywhere faster and enhance security with features like tokenization. It takes time and step-by-step improvements to integrate this into your business model, but as soon as you do, you'll be futureproofing your brand in the years to come.

About Martine Berden

Martine has been Head of Marketing and Communications at Payvision for two years. A Business Administration graduate from the University of Tilburg, Martine formally has spent 14 years in Marketing at ING. With an extensive background that joins marketing and fintech, Martine has expertise in developing marketing strategies by combining customer needs, market trends and aligning them with a company's products and services.

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With the right payment methods, reporting, and expertise on your side, you can keep up with evolving consumer behavior. Our experts are on hand to help find a solution that works for you.

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Martine Berden,
Head of Marketing
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