55% of consumers will abandon a purchase if they can’t pay how they want. Forget the fact you’ve created an amazing product, enticed shoppers to your store or website, and got them to the checkout page - if you offer a poor payment experience, over half will leave without buying.
On the flip side, great payment experiences can drive conversions, foster loyalty, and help build brand affinity. Customer experience is always high on the retail agenda. But today, the high cost of living and inflation are eating into both consumer spending power and business margins. As a result, business efficiency is also a hot topic in boardrooms around the world. This poses the question:
How can retailers balance amazing customer experience with operational efficiency?
To find out, we surveyed over 38,000 consumers and 13,000 businesses. Download the full report below or read on for a summary of the four ways payment technology can help you delight customers without spiraling costs.
Make buying easy
Insight: Payment trends move faster than retailers
QR codes, buy now pay later (BNPL), self-service, digital wallets, and social commerce are all important payment trends. For example, the average spend globally for BNPL is $294.72. For social commerce, it’s $197.03.
But, while these trends are gaining traction, retailers are struggling to keep pace. Only 28% accept digital wallets, 19% support one-click checkouts, and just 16% support BNPL.
Action: 3 steps to achieving the ‘wow-factor’ at checkout
The moment of payment perfectly illustrates the line retailers must walk between efficiency and customer experience. Before adding new features to your checkout, it’s important to get the basics right. Here are the three steps to achieving a next-level experience.
1. The basics
Before jumping on the TikTok Shop bandwagon, you want to ensure your native payment experience is all it can be. For example, do your payment methods match your shopper demographic? Is your checkout optimized for conversion? Are your in-store terminals embedded into your POS system?
2. Taking things up a notch
Once you’ve laid the foundation, you can start offering experience-enhancing elements that won’t just delight your shoppers, they’ll improve your efficiency as well. These include:
mobile point of sale (mPOS) - for taking payments anywhere
Tap to Pay - where your phone becomes a terminal
Network tokenization - for recognizing and improving authorization rates for return shoppers
Next-gen self-service - as demonstrated by Uniqlo (powered by Adyen)
3. Getting futuristic
Already, 13% of consumers want more purchases to be made possible in the metaverse; TikTok Shop is powering social commerce; and the Amazon-Go model is now dazzling football fans by letting them pour their own beers.
How we can help: Amazing payments at the flick of a switch
Adyen allows you to deliver frictionless payment experiences to your customers in an efficient way. Just one integration gives you end-to-end processing and global acquiring that deliver the highest possible authorization rates. New payment methods can be added with the flick of a switch and our unified commerce platform makes it simple to connect new channels as needed.
Get connected
Insight: Retailers that deliver unified commerce will shine
53% of shoppers want to buy things online and return in-store but 76% of retailers still don’t enable customers to shop across channels. This points to a huge opportunity for differentiation. In fact, of the retailers that embraced unified commerce in 2023, 47% reported increased sales and 44% increased customer loyalty.
Quick reminder: What’s unified commerce?
First, there was omnichannel, which uses different systems to connect various business components. Now there’s unified commerce, which uses a single, integrated platform to connect everything in one place. In the context of retail payments, that means all your payments, from all your channels and regions, feed into the same system.
Action: Get unified
To quote Alex Rhodes, our Global Head of Unified Commerce: “Retail is a complex space. It’s often multi-channel and multi-regional. Many systems need to work in harmony to deliver on customer experiences. And, as the rate of change accelerates, retailers are in a constant race to modernize their systems to stay ahead of consumer expectations.”
Connecting your systems to achieve unified commerce will improve your efficiency while keeping you agile and able to respond to new consumer demands. But unified commerce is a marathon. It involves the bringing together of departments, and connecting systems, not to mention extensive change management. A good place to start is payments. By connecting all your payments across all channels and regions into a single back office you’ll not only make things easier for your finance team, but you’ll unlock data insights that will help you know your customers better.
How we can help: Unlock unified commerce with Adyen
Our platform was designed to enable unified commerce. All payments, whether online, in-app, in-person, via social, or even in the metaverse, are connected in the same system. This not only improves your business efficiency, it enables more shopper journeys, giving your customers the freedom to choose how, where, and when they buy from you.
Make everyone a VIP
Insight: The retail data vortex
As our Unified Commerce Strategy Manager Philip Ladiges explains: “Retailers are investing significantly in their customer data infrastructure, including tooling and loyalty programs, as well as strategies to capture more data in-store. The ultimate goal is to better understand customer behavior so they can deliver personalization and improve customer lifetime value.”
Businesses that know the majority of their customers well enjoyed 12% higher revenue growth compared to the global average last year. But we still have some way to go. 25% of retailers lack customer data and the technology infrastructure to truly understand their customers.
When it comes to loyalty programs, retailers’ faith seems to be wavering, with 22% halting investing in loyalty over the past 12 months. Given that the 73% of retailers that use loyalty programs also report revenue growth, cutting investment on loyalty might be a false economy. On the other side, consumers are keen to see loyalty programs continue. But it has to be done well.
Action: Power up your payment data
“Payments are a source of high-quality first-party data, which can be used to fill the gaps within loyalty programs and better understand marketing attribution,” said Philip. Payment data can also power your loyalty program. Instead of furnishing customers with yet another physical loyalty card, or prompting them to download your app, rewards are linked to your customer’s payment method.
How we can help: Realize the potential of your payment data
Each transaction contains information such as the time, date, location, and value of the payment plus the chosen channel, payment method, and device used. This information helps you build a picture of your customers: where they shop, how much they spend, and how often. And, if the data is also linked to your inventory, you’ll see what they’re buying so you can trigger bespoke recommendations.
Create a safe space
Insight: Fraud - the specter at the feast
Fraud is the enemy of efficiency and customer experience, eating away at both profit margins and consumer confidence. In 2023, consumers were scammed out of 234% more money than the previous year. Not surprisingly, 25% feel more unsafe shopping today than they did 10 years ago.
From a business perspective, chargebacks are an ongoing pain, accounting for 25% of overall fraud. This is especially true for retailers who have opted for more lenient returns policies to boost online conversions. To combat this, 60% of businesses are considering working with a payments provider that offers a chargeback liability guarantee.
Action: Balance fraud defense with customer experience
Fraud defense is an important frontier between business efficiency and customer experience. Ramping up your risk settings might be an efficient way of blocking bad actors, but it also creates additional friction for your customers who, despite security concerns, still expect the buying process to be easy. To find the sweet spot between security and conversion, risk settings can be optimized using smart tools and fraud trend data. In this way, it’s possible to spot and stop fraud before it occurs, while known customers can shop uninterrupted.
How we can help: Block fraudsters, not shoppers
Adyen’s built-in risk management solution is a dynamic program that uses the platform's transaction data to inform its machine-learning models, responding to risks in real-time. Additionally, teams of risk specialists help ensure your settings are always optimized for the best possible results.
Final word
Customer experience and business efficiency are often seen as opposing forces. However, our research finds that combining the two can unlock exciting growth opportunities. In the context of payments, this translates into more choice and flexibility for the customer and improved loyalty, connected data, and streamlined systems for retailers.
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