Talking Retail Grocery and product news for independent retailers
For the retail sector, new shopping habits that were formed during the Covid-19 pandemic certainly look as though they are set to stay. Which is great news for convenience retailers, with research from Lumina Intelligence showing that last year 67% of consumers were visiting a convenience store every week.
But without a global pandemic forcing customers to shop and support local outlets, independent retailers still need to work hard to ensure their new-found customer base remains loyal.
Safer payments in every sense
We’ve all heard the phrase ‘dirty money’, but Covid-19 changed our perception of cash to literally that.
On a global scale, we have ditched banknotes and coins – primarily from a safety and hygiene point of view, but mainly due to the ease of paying by card.
With the Financial Conduct Authority recently raising the contactless payment limit to £100, even inputting a pin number into a card terminal is starting to be phased out.
Customers want more choice in the way that they pay, fuelling the demand for quicker and simplified payment options.
It’s clear that for independent retailers, the ‘convenience’ factor applies not only to the way their customers shop, but also to the way that they pay.
Digital payments for a better customer experience
For retailers looking to set themselves apart from their competition, it’s about delivering a seamless shopping experience – with faster check-out times and a quicker transaction process and choice of payment methods.
This is where digital payments come into their own. With ‘tap to pay’ technology reducing friction in the check-out process – whether it’s an in-app payment, via a digital wallet, or by scanning a QR code – it’s a simple and easy way to pay.
But why is reducing friction so important? Because by improving the whole customer journey, you will instill greater customer loyalty and encourage higher basket spend.
With customers already open to forming new shopping habits when it comes to where they shop and how they pay, now is the time to seriously consider offering new ways to pay.
So where do you start with your digital payment offering?
The first thing as a retailer you need to ask yourself is how you will accept digital payments.
Begin by checking whether your current POS system has the ability to integrate with an alternative payment provider.
For most modern POS systems, this should be easy to achieve at a minimal cost. In fact, training new staff to accept these new payments will likely prove the greater challenge.
If your current system does not accept alternative payments, then this may mean investing in a whole new till system, which for a single site with a standalone terminal could equate to a significant investment.
The second step is ensuring there is definitely a demand for alternative payment methods from your customer base. It needs to be high enough to warrant the investment, although there will always be a certain element of risk.
If your store is based in or close to a city, customers are potentially already using mobile technology to pay for public transport or to buy a coffee.
Therefore, it’s likely the adoption rate will be good.
In more rural areas where Wi-Fi connection may be poor and there are fewer mainstream shops and services, it’s likely the take-up rate may not be sufficient to make alternative payments a viable option.
In either case, implementation should be gradual rather than a big bang, to make sure whatever options you choose to go for meet the needs of your customers.
Digital payments deliver value for retailers, not just customers
It’s clear that for any kind of new digital payment method to work, retailers need to have a clear understanding of the wants and needs of their customers.
This is where mobile apps that combine data collection, loyalty and payment methods can really help retailers stand out from the crowd.
Not only do these offer retailers an insight into the way their customers shop, but it also allows them to personalise discounts and special offers based on their customers’ actual spending behaviour from data collected.
For retailers, one of the most significant benefits of implementing additional payment methods is how quickly they can receive funds.
For smaller businesses, there can be frustration waiting for transactions to show in their bank account – particularly given that for some merchants, it can take anything from three days upwards until funds are cleared.
In comparison, payment methods that work along the same lines as a bank transfer incur no wait time or chargeback liability – meaning funds enter the retailer’s account instantly.
This aids cash flow and helps with budgeting, taking the stress out of waiting for payments to clear.
The message is clear – if your research shows your customer base will benefit from and use alternative payment methods, then you need to start looking at how to implement them into your business model.
Broadening your acceptance of payment methods will help keep your customers happy by improving the customer experience, helping to ensure their long-term loyalty and custom.
