Focus on: payments

We will be regularly reviewing our past content in specific areas of retail that remains particularly relevant to the current environment. This week, we focus on the topic of payments; in particular, the key innovations and updates in this area that retailers should be aware of.

Shift to eCommerce spending

As with most aspects of retail, the current Covid-19 crisis is having a huge impact on consumer spending. This has primarily revolved around consumers shifting purchasing from the high street to eCommerce, enforced by lockdown restrictions that have been in place since 23 March. ONS figures demonstrated this, finding that online sales as a proportion of all retailing reached a record high of 22.3% in the UK in March. To some extent this even includes areas like fashion that have been hit especially hard by the crisis.

A Kantar study from early April suggests that this trend is set to remain in place, with their survey showing that consumer shopping habits will change permanently due to the current crisis. Amongst the findings of the report, six in 10 consumers said they intend to continue buying as much online once the pandemic has passed as they do now.

Growth of contactless payment

Unsurprisingly, due to fears of infection in essential physical stores, we’ve observed an increased appetite for using contactless payment methods amongst consumers. This has been demonstrated following the raising of the contactless payment limit from £30/€30 to £45/€50 in the UK and Ireland in some stores from 1 April, with Barclaycard finding that 43% of in-store transactions between £30 and £45 are already now contactless.

And last month, we reported that Spar and Eurospar convenience stores in Northern Ireland have introduced a ‘Scan, Pay, Go’ mobile app which allows consumers to check items are in stock before they leave their homes and then self-serve in the store, highlighting how retailers are responding to consumer demand for contactless shopping.

Pandora’s technological revolution

We also recently covered jewellery retailer Pandora’s technological revolution. Earlier this year, it announced plans to establish a ‘Digital Hub’ in Copenhagen, in order to boost the retailer’s digital presence, omnichannel expertise and use of data. Pandora’s 151 UK and Ireland stores have also undergone a technology-related refresh, with an electronic point-of-sale (EPoS) upgrade completed throughout. It will be fascinating to see the impact these bold changes will have in the coming months and years.

Increasing importance of customer loyalty

In a recent episode of the Retail Ramble podcast, Essential Retail’s Editor Caroline Baldwin chatted to former CEO of Eat, Andrew Walker. The pair discussed the ways in which customer loyalty is changing and why this is so vital during the current Covid-19 crisis.

Blockchain technology

The much discussed technology, blockchain, was the basis for another important recent story in the area of payments. Nike, Tommy Hilfiger parent company PVH Corp, Herman Kay, Kohl’s, and Macy’s have been participating in the Chain Integration Project to find a common digital language to use in the supply chain. The researchers, from Auburn University in Alabama, US have concluded its proof-of-concept phase, which used blockchain technology to enable data sharing between supply chain partners. The study could provide a basis for greater efficiency and collaboration between retailers in the supply chain going forward.

Increasing access through new payment methods

In another relevant podcast episode, we spoke to Roland Palmer, head of Europe at Alipay, to talk about leveraging technology and new payment methods to increase access to the Chinese visitor market. This issue has of course become even more critical in light of the current Covid-19 pandemic.

There have been plenty of changes in the area of payments recently, and this has been brought into sharper focus as a result of Covid-19, with a huge shift to eCommerce activity and a growth in the use of technologies such as contactless payments. It is an area we expect to see plenty more movement on throughout this year, as non-essential stores start re-opening as lockdown restrictions get gradually lifted by governments.