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In today’s fast-paced retail environment, optimising payment strategies has become crucial for merchants looking to drive revenue growth and enhance customer experiences.
A new report from Worldpay, Retail Payments Performance, has uncovered valuable insights into consumer preferences and emerging trends in retail payments, offering a blueprint for retailers to unlock their full potential.
The importance of convenience and choice
Convenience continues to reign supreme in shaping consumer behaviour. The report reveals that 51% of shoppers cite convenience as the primary driver for selecting their preferred shopping channel. This underscores the need for retailers to offer seamless, frictionless payment experiences across all touchpoints.
Providing a wide range of payment options is no longer optional – it’s essential.
“The report reveals that 51% of shoppers cite convenience as the primary driver for selecting their preferred shopping channel”
A staggering 94% of shoppers believe it is important to have multiple payment methods to choose from. Moreover, 57% of consumers report selecting a retailer specifically because of the payment methods they accept.
By offering a diverse range of payment options, including credit/debit cards, digital wallets and emerging methods like buy now, pay later (BNPL), retailers can attract new customers and reduce cart abandonment.
The rise of digital wallets and BNPL
Digital wallets have gained significant traction, with convenience (68%) and security (61%) cited as the top reasons for their use.
Meanwhile, BNPL continues to grow in popularity, especially among younger demographics. While only 21% of shoppers surveyed had used BNPL in the past year, 66% expressed openness to using it in the future.
Retailers should consider incorporating these payment methods to cater to evolving consumer preferences.
Optimising payment performance
Improving payment authorisation rates is a key area where retailers can unlock significant value. There are several strategies to enhance payment performance:
- Utilise sophisticated data and insights in decision-making models
- Allow consumers to pay in their local currency
- Optimise the payment method mix
- Partner with a market-leading payment provider
- Implement automatic updates for expired or invalid card details
By focusing on these areas, retailers can reduce transaction failures, improve operational efficiency and ultimately drive revenue growth.
Fraud prevention and security
As retail evolves, so do fraud tactics. There are four main types of retail fraud:
- First-party misuse (friendly fraud)
- Account takeover and phishing
- Credit card fraud and card testing
- Loyalty fraud and discount abuse
Implementing sophisticated AI and machine learning tools can help retailers stay ahead of emerging fraud challenges while maintaining high authorisation rates and minimising friction in the customer experience.
The importance of refunds and returns
Often overlooked, the process of returning money to customers plays a crucial role in shaping overall satisfaction and loyalty.
The report finds that 96% of shoppers consider easy refunds and returns important. Retailers should focus on optimising their payout processes to ensure quick and hassle-free refunds, which can lead to increased customer loyalty and reduced support volumes.
Embracing innovation and sustainability
To stand out in a crowded marketplace, retailers must innovate and align with consumer values. The report reveals high levels of consumer interest in new shopping experiences:
- 78% are open to using their own device to scan, pay and go in store
- 65% are willing to try augmented reality for virtual try-ons
- 55% are open to shopping via live-streaming
Additionally, sustainability and ethical considerations are increasingly important to consumers, with 85% expecting brand ethics to play a role in their future shopping decisions.
Explore ways to optimise your payment strategies
As the retail landscape continues to evolve, optimising payment strategies has become more critical than ever.
Download our latest report, Retail Payments Performance, to unlock more guidance on optimising your payment strategies for shoppers.
By focusing on convenience, choice and innovative technologies, retailers can enhance customer satisfaction, drive loyalty and ultimately boost their bottom line. The key lies in creating seamless, personalised experiences that resonate with modern consumers’ expectations and values.
