3 Omnichannel Commerce Trends Shaping How Retailers Engage Customers
The global pandemic dramatically altered the retail landscape. As consumers adapted to working from home and learned to socially distance themselves, retailers quickly pivoted to creating engaging omnichannel experiences via new digital payment options. Retailers implemented new strategies that simplified the purchase process, which helped create more engaging customer experiences. Whether it's utilizing new digital forms of payment or leveraging customer data to personalize offers, retailers are constantly learning how to build engaging omnichannel shopping experiences.
To support this learning, Fiserv analyzed over $3 trillion in merchant payments data, combined with a consumer survey of 2,200 U.S. adults to understand how digital payment preferences are changing the retail experience. By compiling this information, we’ve identified three commerce trends that are shaping how retailers engage with customers.
Payment Methods That Blend Digital and Physical Experiences Are Here to Stay
Since the start of the pandemic, retail omnichannel spend has grown by 39 percent. Other business verticals like restaurant and grocery have seen omnichannel spend grow north of 70 percent, pointing to a broader consumer shift to new consumer interactions across segments.
As consumers continually look for avenues to shop digitally while still visiting physical stores, businesses are focusing on simplifying capabilities that blend digital and physical purchasing interactions. This can include buy online, pick up in-store (BOPIS) — which 48 percent of retail customers have already used. Other strategies for blending the digital and physical can include streamlining online returns in physical stores or using geo-location to bring local customers who are browsing online into a brick-and-mortar location to complete their purchase.
Younger, Digital-First Consumers Are Driving the Growth of Debit
One of the most significant behavioral changes throughout the pandemic has been a consumer shift from paying with credit to paying with debit. In fact, according to our most recent Carat Insights data, debit is now the No. 1 online payment method. Who is driving this trend? It’s millennials and Gen Zs who prefer to shop online:
- Online debit sales volume has grown by 75 percent since the start of the pandemic; online credit has only increased 25 percent.
- Forty-eight percent of consumers say they prefer debit when purchasing online, compared to 36 percent who prefer credit.
- Digital wallet usage has increased 658 percent since the start of the pandemic, driven by younger generations. Of those digital wallet users, 51 percent say they're paying digitally with debit, 28 percent are paying with credit, and 17 percent with stored value.
Innovative Payment Solutions Help Increase Purchase Size
Modern technologies and payment options can differentiate a merchant’s offering, increase basket size, and deepen customer experiences by going beyond the buy button. Examples of these differentiated payment options include buy now, pay later (BNPL), which enables customers to finance their purchases in regular short-term installments. BNPL sees highest adoption among consumers who are high earners and have higher education.
The pandemic also brought QR codes to the forefront by enabling consumers to access a touchless experience such as downloading a menu or paying digitally. In fact, 26 percent of consumers say they've already paid by scanning a QR code. Eventually, QR codes may help reshape customer experiences by tackling multiple tasks to streamline the entire customer journey, such as providing product information, prompting a menu or ordering function, streamlining returns, and integrating loyalty and customer engagement programs.
The ongoing shift to digital-first purchasing is creating a unified customer experience across the entire customer journey. Retailers that build omnichannel strategies that combine digital and physical engagements, while also accounting for how consumer behavior is evolving, will be the businesses best positioned to keep customers engaged with their brand.
Chris Abele is vice president of Carat and digital commerce strategy at Fiserv, a leading global provider of payments and financial services technology solutions.
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