How to Reach the One Customer Segment Most Retailers Are Missing
The rise of online and mobile commerce means that retailers can sell to consumers like never before. Consumers can shop from their laptop or mobile devices at any time. Retailers can understand the nuances of consumer behavior with advanced tracking and analytics. Online commerce is the wave of the future and the most important sales channel for retailers to consider. As long as companies continue to devote resources to reaching consumers online, revenue will climb ever upward and success is nearly guaranteed.
Or is it?
The rise of digital commerce has created an abundance of opportunity for companies and has made paying bills far more convenient for a significant portion of American consumers. With just a few keystrokes to enter their credit or debit card information, customers can purchase nearly anything and have it shipped straight to their doorstep. Using an online banking tool or credit card to automatically pay bills, rent and other necessities makes daily living far more convenient for many Americans.
Unfortunately, shopping and paying bills online is only possible for consumers who possess a credit or debit card or have a bank relationship. Twenty-seven percent of American households don't have credit cards, 24 percent don't have a credit card or debit card, and more than 25 percent lack any kind of banking relationship at all.
The customer segment left out of the digital commerce revolution isn't limited to underbanked consumers. Even consumers who do have a credit or debit card are less comfortable using them to make purchased online. Over half of consumers simply prefer to use cash, and 82 percent are uncomfortable providing personal financial information online. Most telling, 30 percent of consumers indicate they would spend more money online if they can pay with cash.
When retailers and service providers only allow customers to pay with a card or bank account, they miss out on selling to at least one-quarter of Americans — and leave untold sums of money on the table.
Offering Cash Payment Technology
Fortunately, new technology empowers consumers to pay for nearly anything with cash.
It's easy for both billers and payment partners to start offering cash payment technology at brick-and-mortar stores. E-commerce companies and billers need only to sign up for a simple API and write a few lines of code. Retailers have it even easier: they can simply enable cash payment technology along existing rails. In as little as a few weeks, billers can begin sending their customers to brick-and-mortar stores to pay their bills in cash.
Once the service is enabled, customers will receive a bill with a scannable barcode that they can bring to any one of a number of brick-and-mortar locations. Cashiers scan the barcode at the point of purchase like any other item and the customer pays their bill in cash. After the customer pays, the cash transaction is complete and automatic notification of payment and payment location is sent to the biller.
Billers like this technology because offering easy payment options increases the likelihood of on-time payment. Additionally, retailers can take advantage of an already established network of brick-and-mortar payment partners without having to take on the time-consuming burden of building relationships and integrating with retailers. Since cash-payment technology is offered as a HTML5 web solution, retailers don't need to worry about downloading software. Access is instant and setup is simple via universal product code without any technical integration or changes to point-of-sale software.
Brick-and-mortar retailers also stand to gain from this technology. For starters, billers who want to encourage on-time payment will promote retailers with cash-payment technology enabled right on the bills they send to customers. As consumers plan their errands for the week, promoted retailers remain top of mind. The result for retailers is an increase in foot traffic. In addition, by offering consumers an easy and convenient way to pay their bills in cash, retailers build a stronger, more loyal customer base.
A Complete and Polished Customer Experience
To create a strong customer experience, it's not enough to offer consumers an app and call it a day. Consumers are bombarded with new content all the time, mobile consumers especially. At the same time, retailers want to make sure that data and revenue are easily tracked and accessible at a moment's notice. Fortunately for both retailers and consumers, it's easy to consolidate apps in a retailer-branded account and digital locker.
A digital locker enables consumers to complete transactions in a single digital shopping cart, even while they're using multiple apps. Users need to enter their personal information only once and it becomes instantly available across all apps in the retailer's digital locker. Retailers can easily access customer data and purchasing history from one location. Consumers enjoy a customized experience and, as a result, grow more loyal to a particular retailer and more likely to give them repeat business.
Reach New Consumers, Existing Ones More Frequently
Underbanked and cash-based consumers have already been left out of the online and mobile commerce revolution for too long. Not only is paying bills like rent, utilities and mobile service providers a major inconvenience, but these consumers are also purchasing less online than their banked counterparts. Even more significantly, a large majority of the three-quarters of Americans who do shop online and pay bills with credit and debit cards would prefer to complete their transactions in cash.
By the same token, service providers who bill underbanked customers are frequently faced with the challenges of late payment. Online retailers leave money on the table that they didn't even know was there. Cash-payment technology not only helps underbanked consumers, but it also helps cash-based consumers participate in online commerce. Both bill providers and online merchants benefit from increased sales, and retailers benefit from increased foot traffic and increased customer loyalty. Plus, it's easy to deploy the technology.
Thomas Cornelius is the senior vice president at InComm, a marketer, distributor and technology innovator of stored-value gift and prepaid products.