New York – FashionUnited interviews Lee Jones, director of Sales
and Business
Development at Ingenico Enterprise Retail on how advanced technology and
new payment methods are shaping the future of retail in an ever digitalised,
cash-less world.
Lee and his team focus on Northern Europe, helping organisations implement
solutions and technology that “deliver real value”. Currently, Lee is leading
Ingenico into new markets where cashless payments are just starting to
emerge.
What consumer-driven trends influenced both payments and the retail
industry in 2019?
More than anything, the consumer appetite for speed and convenience.
Whether it’s the fact that 50 percent of UK consumers are now shopping
online or how card payments are dominating retail spend, people want
simple, easy, fast shopping and payment experiences. I would even argue
that the last year demonstrated that. (Lee is citing recent retail research
by GlobalData and BRC’s latest Payment Survey.)
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In 2019, the industry realised that seamless, convenient shopping is the
key to winning over customers. Whether it’s through simplified checkout
processes or seamless omnichannel shopping experiences, consumers have
declared loudly that they want buying goods to be uncomplicated.
What are three key trends you see shaping this year’s retail?
I think we’ll see a big push towards Scan & Go on customer devices.
Consumers are leading increasingly busy lifestyles, so there’s growing
interest in being able to scan, pay, and go on their smartphone. It can
speed up the shopping experience significantly, so it’s appealing to
customers and will drive competitive edge for retailers that implement it
well. Some supermarkets are making use of these systems already, but I
believe we’ll see many more businesses try out Scan & Go in 2020.
Secondly, it’s been forecast by Gartner that 75
percent of organisations selling direct to consumers will offer
subscription services by 2023. I think that we’ll see some major players
offer these kinds of services in 2020. It’s a harder sell, but if retailers
can convince customers of the longer-term benefits and rewards, it could be
an industry gamechanger.
Finally, the environment will be a big preoccupation across all sectors
in 2020. Customers are more concerned now with the impact their purchases
are having on the natural world. According to recent research by Retail
Week and DWF, 29 percent of UK shoppers have started shopping with
retailers with more ethical or sustainable practices. This desire for
socially and environmentally responsible retail will drive a lot of
innovation in 2020, like our partnership with micro-donations charity
Pennies, which offers customers the option to donate their rounded-up
transactions. Other ethical programmes, like establishing more localised
hubs for immediate delivery, or striving for zero packaging, will tick a
lot of boxes for consumers.
Will cashless go mainstream in 2020?
Cashless has already gone mainstream! In the UK alone, cash only made up
28 percent of all payments in 2018 and will comprise less than one in ten
payments by 2028. Of course, adoption varies from region to region, but in
2020 we’re going to see an even greater shift towards a cashless society.
Contactless payments, in particular, are continuing to grow in
popularity, making checkout quicker and simpler. Merchants must stay up to
date with the increasing demand, including small businesses such as vendors
and kiosks, or they’ll be left behind. Similarly, mobile payments are on
the rise and in 2020 we will see an increase in retailers using P2P
payments via cards and mobile.
There’s an increasing appetite for ‘buy now, pay later’ schemes, but
what’s in it for retailers, and what are the hidden costs of these
schemes?
Buy Now, Pay Later is a very compelling proposition for a customer,
which means that retailers that offer this payment option could win
customers over. Spreading the cost of a purchase, especially potentially
high-value purchases, could entice conversion from customers sitting on the
fence.
In terms of the hidden costs to retailers, I’d actually say it’s well
understood how the cost of lending is built into the instalments the
customer pays – that’s the cut the payment service takes. And the messaging
is very clear that the retailer still gets paid in the event of a customer
defaulting.
I would argue that the true hidden cost could be reputational. There has
been a lot of media attention recently about whether Buy Now, Pay Later
schemes are harmful to customers and their credit scores. There could be a
fierce backlash against these schemes, and retailers won’t want to be seen
encouraging customers to spend money they don’t have. Now, I’m not saying
retailers shouldn’t offer these payment methods, far from it. But I believe
the customer safeguarding message is something retailers will need to
prioritise.
What tech will shape payments in retail this year?
This year, we will see further advancements in voice commerce technology
and it’ll have a huge impact on retail. Previously considered a “nice to
have” feature rather than a substantial revenue enhancer, voice is clearly
becoming an important new channel for merchants. OC&C Strategy Consultants
recently found that, in 2018, 2 billion dollars was spent on voice commerce
in the US market. By 2022, that number is expected to reach a phenomenal 40
billion dollars. As consumers increasingly crave quick and convenient
answers to everyday tasks, voice commerce’s instantaneity is becoming
hugely appealing to shoppers, particularly as the technology facilitating
it advances.
Crucial to this uptake, however, is ensuring that customers feel that
the payment systems are secure and not at risk when completing their
transactions. The security credentials of any voice commerce solution will
become a crucial differentiator for retailers employing them.
Image:Buy Now, Pay Later. Credit: Klarna official website