The start of the year saw the demise of Toysrus and Maplin and the weekly retail news about profit warnings and store closures is where many retailers find themselves. When you look at Toysrus they didn’t react to the new environment they found themselves in. This didn’t happen overnight and the information that surrounded them they chose to ignore. Below is a snapshot of how customers were choosing to pay for goods and services in 2016. The one thing that is evident, is that customers were paying less in cash, in fact by the end of 2016 cash had been overtaken by Debit Cards. Also with so many options to access product fewer customers feel compelled to go shopping. Getting customers into shops isn’t easy so when they are there it is important that they have a great experience. As you plan for systems growth the importance of integration and connectivity become more important, if you are to maximise the full benefit of change. How many ways can your customer pay?
Top 10 Paying Trends of 2016
In the fast-moving world of payments the top 10 trends seen in 2016.
- E-commerce… rapidly evolving thanks to advances in online payment processing technology. The vast majority of merchants accept credit cards online. Whilst e-commerce’s portion of the total share of the UK retail market is still slim, nearly all the growth in the retail sector now happens in online sales.
- Contactless Wearable’s…are the way forward, with over 86 million contactless cards in the UK. Half of Disney World wristbands are payment-capable Magic bands, Starbucks offers gift cards in the form of a wristband payment device linked to the Starbucks app and Topshop offers contactless jackets, key chains and jewellery as ways to pay.
- Mobile Shopping…50% of UK online retail sales in this year were from a mobile phone and 146 million consumers now use m-commerce, with purchases through in-app functionality.
- Reward systems…are replacing traditional high street reward cards. Businesses like Starbucks are integrating rewards into their mobile apps and pioneering programmes that let customers order and pay for goods in advance, to avoid queuing.
- Paying invisibly…is a quick and hassle-free experience. Apps like Uber and Deliveroo have credit card details pre-loaded into the apps, without waiting for card payments to be processed.
- Social Media Payments…have turned their attention to payment processing. Facebook has a payment feature for Android and iOS. Twitter offers to tweet and paying via Pingit.
- Generation Y…will be the savviest shoppers thanks to apps like Go Henry. They teach the value of money to children by allocating allowances and topping up balances by completing chores. Parents are in control whilst teaching their children how to be financially independent.
- Bitcoin… had a notoriously volatile value and yet it was the best performing currency and asset of 2016. With record-low bond yields, uncertainty following Brexit and slow GDP growth, investors have been looking elsewhere for safe-haven assets and bitcoin’s value has surged.
- Pokemon Go…was the biggest gaming phenomenon of 2016. This augmented reality mobile app has more users than Twitter and initially added £6 billion to Nintendo’s stock value. It is free to play but has purchase options up to £79.99 for its in-game currency Poke Coins, which save time hunting for characters and unlock special features.
- Artifical Intelligence…has made the payment experience easier. In-app messenger bots are on the rise in retailers automating customer service and ordering processes. Shoppers regularly scan barcodes to add products to their shopping lists and speak to virtual assistants through voice recognition.
Having many ways to pay is one area that can limit a retailers ability to trade because the customer has been conditioned by the environment that cards and contactless are universally accepted.