How customers liked to shop 20 years ago differs wildly from today. With rapid tech innovation, comes rapid change. To best serve these modern shoppers, retailers have been quick to adopt novel retail innovation, like virtual reality, personalization, and elaborate product displays in an attempt to create superior customer experiences and retain these customers. However, this type of innovation alone won’t cut it in the long run. This is because customers haven’t just had changing preferences in how they shop, but also in checkout, and payment preferences.
What are the driving forces behind these evolving payment preferences? Based on a recent study, where we surveyed more than 1,000 U.S consumers and their attitudes and preferences around retail credit and checkout, here’s what retailers should consider.
Cater to the Largest Buyer Demographic
With over $77 million in buying power, the millennial generation is the largest buyer demographic today. They’re tech savvy, experience driven, and just starting to get a reign on their finances. The average millennial has a 672 credit score.
Millennials also have extremely high expectations when it comes to their checkout experience. Quick in-store checkout and online functionality carry significant weight in how they view a retailer. They are more likely to trust retailers with optimal customer experiences like Amazon, just as much as traditional banks, to provide them with the best payment options. Retailers have a large opportunity to optimize their checkout and financing process to empower this generation of buyers.
Make Omnichannel Your Only Channel
It should come as no surprise that today’s customer isn’t just shopping on one channel. They want to browse online and then go in-store to make a purchase, and vice-versa. Retailers need to realize that mastering omnichannel extends beyond browsing. Customers want this same versatility reflected at checkout.
75% of customers have never applied for credit online. Having just in-store credit options won’t appease customers today. More and more customers look for online experiences to match that of in-store. If they can pay one-way in-store they’ll expect to pay that same way online. If a promotional discount functionality is available online it should apply in-store as well. Retailers must have all their channel bases covered in-store, online, and mobile to keep up with their customers.
Refresh Your Approach to Brand Loyalty
Today’s customers aren’t as a brand loyal as they were years ago. It doesn’t take much for a customer to write off a retailer based on a less than favorable shopping experience. However, that doesn’t mean that tackling customer loyalty is out of the question for retailers.
In fact, 60% of in-store shoppers care most about a rewards offer or incentive when applying for credit at checkout. Offering things like promotional credit offers at checkout are not only a way to give customers the promotions they look for but also to provide them with a payment option that they can use at your store time and time again. Brand loyalty isn’t dead. It’s just up to retailers to refresh their perspective and approach to it instead.
Empower Payment Flexibility
While customers have been quick to explore innovations like mobile pay at checkout, they yearn for more payment flexibility beyond this new technology and the traditional methods. Only 1 in 4 customers have ever applied for credit. What’s stopping them? 27% of customers don’t want to provide financial information to a store associate, while 15% don’t apply for credit because of the long application process. Summed up, customers think the process of applying for an alternative payment method is outdated.
Customers are looking for payment flexibility beyond the traditional credit application process. Payment options like lease-to-own and monthly payment plans are appealing to customers as it empowers them with choice. 1 in 4 customers think it’s valuable to be offered more than one credit option.
Moving forward, retailers need to evaluate their current checkout process and make the necessary upgrades to better satisfy customer payment demands and checkout expectations. Conquering the checkout can be the secret sauce in creating great customer experiences and ultimately happy customers.