The 2010s was a decade of disruption in retail that led some analysts to talk about a ”retail apocalypse”. And while many legacy players have undoubtedly struggled, we also see that there’s still great potential for in-store retailers who are willing to change with the times. Here are four of the most important trends that we think will shape in-store retail in the year 2020.
1. Payments have to be frictionless and flexible
Today’s customers expect their payments to be quick and easy. This is one reason why the world’s biggest card networks, Visa and Mastercard, have put such a big emphasis on promoting contactless cards. From 1 January this year, Visa and Mastercard have even mandated that all card terminals that accept their cards have to be enabled for contactless transactions, and merchant’s who aren’t compliant risk heavy fines.
But contactless is only part of the equation. Over the past few years have seen a big increase in alternative payment methods that satisfy customers’ appetite for flexibility in how and when they pay. As an example, more and more brick-and-mortar stores now offer invoice payments as an option when checking out. This is, in large part, thanks to new invoice services that take seconds rather than minutes to complete a transaction.
In the Nordic countries, fast and easy-to-use P2P mobile payment solutions, like Swish, MobilePay and Vipps, are also becoming increasingly popular for in-store purchases (53 % of Nordic consumers had used mobile payments in-store at least once in 2018). Offering customers these quick and flexible payment alternatives will be one key for retailers to improve their overall shopping experience and staying relevant in 2020.
2. Open Banking impacts the payment world
In 2020, we also expect the concept of Open Banking to start having an impact on European payments. The EU’s new payment service directive, PSD2, includes a provision that means banks no longer have a monopoly on their client’s bank accounts. They now have to give other companies access to bank accounts through APIs if their clients request it.
This will allow for completely new services that can make direct payments from your bank account, through what are called Payment Initiation Service Providers (PISPs). While PSD2 has been in effect since 2018, we have yet to see these PISPs become a viable payment option. 2020 might just be the year that this changes and we start to see PISPs making their way into retail payments.
3. Experience is everything
The fact that you need to offer customers a great experience is hardly news, but with increased competition from e-commerce, and decreased loyalty from consumers, the in-store shopping experience is becoming more important than ever.
In a recent PWC survey, a third of consumers said that they would stop interacting with a brand they loved based on just one bad experience. At the same time, the survey showed that the companies who invest in and deliver ”superior experiences” are able to charge up to a 16% premium for their products and services.
As a result, improving the customer experience will be a big focus for industry leaders in 2020. According to a 2019 survey by Gartner, 80 percent of the marketing experts polled said that they expect to compete mainly based on their customer experience going forward.
4. Retail becomes even more mobile
It’s not just within e-commerce that phones are becoming more important, in-store retail is also becoming more mobile. According to a study from 2019, 48% of US consumers who own smartphones actually use them while shopping in stores, either to look up product information, compare prices or look for discounts.
To deal with these new, mobile consumers many in-store retailers are also utilizing the power of the smartphone to great results. The international bed retailer Hästens is one such example. Together with Kaching, Deloitte and Salesforce they have implemented a new in-store app that has helped reduce the time it takes to order a bed in-store by over 90%.
That type of improvement is great news for today’s mobile consumers, who are both restless and hungry for information when they shop. There are also plenty of other examples of how mobile tools can increase in-store sales. As an example, a US study carried out just last year showed that some retailers saw a 25% increase in sales per transaction when using mobile tools like mPOS. With that in mind we expect many more retailers to start utilizing mobile technology in their stores during 2020.
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