Capital Gain

Citcon: Payments Can Be Retail’s ‘Digital Guide’

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Chuck Huang, founder and CEO of Citcon, explores how the pandemic has prompted retailers to capitalize on the surge in demand for contactless, digital payments. “As the payment digital glue increases in criticality, driving penetration of digital payments for retailers will become more essential, Huang says in “A Look Forward: What Executives Wish for America and the World in 2021.”

2020 will be remembered by most as a year of trial. But we at Citcon believe it will also be marked as the year that prompted stunning innovation across industries. Merchants that had focused on getting customers to increase time in stores switched to efforts to decrease time in stores, with digital payments playing a key role. At the same time, familiarity with digital created by these merchant efforts drove eCommerce penetration. Some measures suggest we saw three to five years’ worth of eCommerce growth in seven months. This positions global consumer marketplaces for a dramatic shift.

Demographics that avoided eCommerce channels are there now and will continue to be so. Omnichannel is no longer a buzz term but a survival requirement for the industry. Even small companies with little to no previous digital connection with their customers have suddenly become digitally dependent, with COVID having thrust them into the world of QR-based menus. We believe these changes are lasting.

While some small companies will use omnichannel facilitators, like the DoorDashes of the world, to connect to their customers online, costs and lower profitability will drive many of them to look to create a digital glue between the customer in the store and their life outside it. That digital glue is payments. Progressive retailers have paved the way for this with email collection at registers, enabling them to connect their customers’ behavior in-store with them online. This helps decrease the cost to market to customers, improving profitability and giving brick-and-mortar shops an asset online.

But this is not just a marketing strategy, it’s also an insight engine when used well. A customer in a store can be sampled upon payment by surveys in email receipts, providing continuous feedback that drives loyalty. As the payment digital glue increases in criticality, driving penetration of digital payments for retailers will become more essential.

Missing out on young people who don’t have credit cards doesn’t just mean having to bear the handling cost of cash transactions. It also means losing a potent lifelong connection with the young person online. Retailers who offer payments that these young people are familiar with won’t just win their loyalty in-store, but online as well. All of this is on top of the enhanced safety driven by contactless payment.

While COVID may have been a once-in-a-lifetime event, the thought that it may come again will leave biological antifragility an enterprise concern for years to come. The antifragility will be facilitated by payments across the full enterprise in multiple ways, making consumers and businesses less likely to see a COVID-like economic devastation ever again. And that is something every executive should look forward to.

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NEW PYMNTS DATA: RETAIL BANKING SERVICES’ PARADIGM SHIFT STUDY – JANUARY 2021 

About: The January 2021, Retail Banking Services’ Paradigm Shift Report, PYMNTS examines how consumers choose to engage with their FIs when accessing information about various products and services, especially since the pandemic’s onset.





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