Voice of the Industry

The digital shopping experience: opportunities to innovate

Thursday 18 February 2021 07:42 CET | Editor: Simona Negru | Voice of the industry

The pandemic-driven shift to digital shopping channels shows no sign of reversing. Lee Tango, Director, Unified Commerce Solutions at Cybersource, discusses opportunities for merchants to advance their digital-first strategies as they prepare for what comes next.

A recent UK survey reveals that a gap is developing between the digital shopping experiences consumers are looking for, and what merchants are prioritising. That may sound surprising, given that both parties share a common goal: the consumer wants to buy something and the merchant wants to sell it. I'd argue that the divergence stems primarily from the fact that customers' purchase expectations have never been higher than they are today. 

Add in the competitive nature of online shopping, and it’s clear that one of the key ways for merchants to stand out is by elevating the digital customer experience. The pandemic has, of course, helped accelerate the adoption of digital experiences, such as restaurant pay-at-table apps that respond to health and safety concerns.

Another challenge for merchants is that customers may feel somewhat conflicted when buying online. For example, they may want the meal delivery app to recognise them and offer their favourite pizza — but may be reluctant to part with the data that enables the merchant to meet these expectations and get to know them better.

Customer accounts can be useful, but tend to be weighted in the merchant's favour. Persuading customers to set up an account and share their data could depend on what they get in return (beyond a frictionless checkout). The research I referred to earlier indicates that UK consumers consider rewards to be the most important digital feature, yet rewards don't make it into the merchants' top three features. 

It's all about the data

As well as being able to collect customer data, merchants need to understand how to use this insight to create those valuable and personalised shopping experiences that drive loyalty and sales. That depends partly on merchants’ ability to use what they know about a customer's in-store shopping habits for their digital channels. 

Take impulse purchases, for instance — a source of revenue that retailers may be missing out on right now, given the shift away from physical stores. If merchants can apply the data that they have about customers' pre-pandemic in-store shopping habits to click-and-collect purchasing, they have the opportunity to encourage more impulse buying. So, if my favourite sports shop knows that, pre-pandemic, I would buy an item of clothing from the sale rack every time I visited the store for golf balls. This means that it could promote sale items to me in the email it sends confirming my click-and-collect golf ball order. 

If done well, the customer will feel known and valued, whilst the merchant could make incremental sales. They’re also building for the future, since some shoppers may never revert back to the physical store. By linking a customer's online and in-store purchase history, the retailers can better identify their newly digital-native shoppers, and won't expend effort trying to regain 'lost' customers who've simply changed channels.

Digital-first innovation: your next steps

The move to digital seems here to stay and likely to increase. Retailers need to keep innovating in the digital space, but should be careful not to lose sight of who they are and what their brand represents. If enhancing click-and-collect is right for your business, then it's probably worth investing in. But if you operate 'destination' stores, alternative digital investments may serve you better over time.

I think mobile apps can be a great investment, but customers need a reason to download and use them: the ability to place orders may not be enough — retailers need to know their customers and respond to what motivates them. The best mobile app may not even be your own — you may achieve more by partnering with a relevant app provider to promote your goods and services, using data about the app's users to bolster your own sales and marketing. It boils down to the concept of shared value. 

The contactless (or touchless) experience in-store is another area that's ripe for innovation. If a contactless tap can be developed to transmit data in both directions, it's another opportunity to build more compelling customer experiences that drive loyalty. That may simply mean automatically applying a relevant discount to the total payment. Or it could extend to delivering on a store's price promise, with an automated lookup of an item's price at nearby stores that refunds the difference if cheaper elsewhere, or confirms to the customer they already have the best deal.

To learn more about customer and merchant digital-first imperatives, and how we can help, check out our digital-first resources here.

These materials and best practice recommendations are provided for informational purposes only and should not be relied upon for marketing, legal, regulatory or other advice. Recommended marketing materials should be independently evaluated in light of your specific business needs and any applicable laws and regulations. Visa is not responsible for your use of the marketing materials, best practice recommendations, or other information, including errors of any kind, contained in this document.

About Lee Tango

Lee is an experienced payments and fintech practitioner with an extensive knowledge, built up across 20 years in the industry. He works with global retailers, hospitality providers, and transit operators to help them understand how they can achieve and excel in their digital transformation aspirations. Lee has an intrinsic working knowledge of payments within enterprise organisations and the tough challenges merchants face when attempting to reinvent themselves.


About Cybersource

Cybersource helped kick start the ecommerce revolution in 1994 and haven’t looked back since. Through global reach, modern capabilities, and commerce insights, we create flexible, creative commerce solutions for everyday life – experiences that delight customers and spur growth globally. All through the ease and simplicity of one digital platform to manage all payment types, fraud strategies, and more. Knowing we are part of Visa and their security obsessed standards, you can trust that business is well taken care of – wherever it may go.


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Keywords: Lee Tango, Cybersource, merchants, online shopping, frictionless checkout, accounts, retailers, digital shopping, delivery app, data , click-and-collect, contactless
Categories: Payments & Commerce | Online Payments
Countries: World
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