Increasing numbers of UK consumers value the experience they have in-store as much as the product they end up buying. A big part of this comes down to payments, with many shoppers today preferring quicker and easier ways to pay than cash [i].
Small business owners should be primed to take advantage of changing payment trends, where possible. Digital disruption is reshaping the UK retail sector, and has the potential to transform your business too.
Modern consumers are increasingly drawn to experience-led purchases[i]. This is especially true when we look at the spending habits of younger shoppers, many of whom regard travel as a priority purchase[ii]. As a result, spending growth in sectors linked to experience purchases, such as travel (7.3%) and leisure (6.2%), has grown more strongly than traditional sectors like retail (3.9%) in recent years [ii].
This has, in turn, driven retailers to find innovative new digital ways to connect with their consumers. A huge range of exciting new start-ups [iii] are offering everything from digital foot traffic measurement to holographic advertising and even 3D body scanning for perfect-fit clothes. How consumers pay is an important part of the in-store experience, so the trend has been to offer greater choice in transaction methods, with an emphasis on speed, security and mobility. By improving the experience, it is hoped more consumers will return – and spend more each time.
Card acceptance is a key element in the drive to improve payment experience. This is helping to create a change in payment trends. Cards overtook cash as the most popular payment method in the UK at the end of 2017, according to UK Finance [iv]. Consumers made 13.2 billion debit card payments, versus 13.1 billion cash payments – and the gap is set to widen in the coming years, it said.
In 2018, Worldpay recorded another tipping point, when contactless overtook chip and PIN for the first time in storesv. At the same time, we recorded a 114% increase in payments via mobile wallet systems such as Apple Pay, Samsung Pay and Google Pay [vi].
Good for them, good for you
The perception among many small business owners is that their business is too small to accept card payments, and that card payments are expensive to support [vii]. In fact, digital payments can offer a range of benefits:
Faster at the till, meaning fewer queues and possible drop-outs [viii]
More secure, because you reduce the opportunity for staff theft and robbery
Good for cashflow: the money is often transferred more quickly than you might deposit cash at the bank
Good for you, as you can use the time spent handling cash on growing the business instead [ix]
Simplifies accounting, saving you more time
Shows you care about creating positive customer experiences
Allows you to gain new insight into customers using tools such as My Business Dashboard [x], which help analyse payments data
Digital payments are also essential in creating the engaging experiences that consumers are demanding. Apple popularised the use of mobile point-of-sale (mPOS) systems in its stores, for example, and these tools have become an increasingly common sight on the high street. They offer the ability for shop staff armed with tablets to help consumers find stock, look at items and even pay via linked card machines. The last point is important, because shoppers are increasingly demanding faster payments. In fact, the majority (63%) claim that doing away with check-outs altogether would make their store visit more engaging [xi].
If more of your customers want to pay by card, or even using their mobile phones, it makes business sense to allow them to do so. According to RFi Group research, 22% of UK consumers have not been able to pay in store by their preferred method. Of these, 15% decided to take their purchase elsewhere [xii].
Getting set for success
So how can you get started? The first step should be to contact your payments service provider. Look for card terminals that support all major credit and debit cards, including contactless and mobile payments. You may be surprised at the sheer range of reasonably priced options available to you.
Think about how you’re going to use the device. The Worldpay Reader, for example, links to a smartphone or tablet so you can take payments wherever the customer is – on your premises, or out and about. This empowers store staff to engage with customers on a more personal one-to-one basis, as well as cutting queuing and payment times.
Some providers will also offer packages including online tools that you can use to analyse sales, enabling you to get closer to your customers.
That’s the beauty of digital payments. When the data is in front of you, it’s not only easier to speed through time-consuming jobs such a bookkeeping and reconciliation, you can also start to find new ways to grow the business and improve the customer experience.
To find out more, visit www.fsbcardprocessing.co.uk