By: Kaushalya Somasundaram, Head of Payment Partnerships and Industry Relations, Square UK
Over the last 18 months, we’ve seen retailers of all sizes pivot to meet the changing demands in consumer behaviour: the sudden shift to digital has had a massive impact on the way many companies operate. By accelerating digital transformation initiatives, businesses have had the opportunity to unlock new revenue streams – with the potential for further digitally-driven growth.
Although the road to recovery is still a long one for many, the future is finally starting to look a little brighter for the world of retail. For one, the reopening of stores nationwide last quarter saw many consumers waiting in line, once again, to experience the pleasure of shopping in person. This shift to in-store shopping is clear from the latest official figures: according to the ONS Retail Sales Report for June, the total proportion of sales online decreased to 26.7% in June 2021, down from 28.4% in May 2021 for most retail sectors.
At the same time, there are still those shoppers who have become used to the convenience and ease of online shopping that are continuing to choose to shop online. To reach both, retailers are working hard to be more flexible and agile, whilst listening to their customer needs and demands at the same time. Here is how they’re doing it.
Offering shoppers more payment options
A significant change brought on by the pandemic was an accelerated shift in consumer payment preferences. Our own research – Cash and the Pandemic 2.0 report – found that in the UK, the share of Square businesses that went cashless has risen by more than 4x in response to this shift.
Although the move to cashless during the pandemic was magnified by health and safety concerns, our supplementary research found that a large proportion (over half) of Britons are still eager for cash payments to be an option in stores in the future for convenience’s sake. This is an important aspect to bear in mind from a retail perspective, especially as the majority of consumers surveyed in the same research said that having a variety of payment options would increase the likelihood of their return to that brand.
By expanding the range of payment options offered to customers, such as online, contactless, invoice or mobile, retailers will have the ability to sell in more ways, giving consumers the option to pay in a way that best suits their ever-evolving needs and expectations. The good news is that we’re already seeing this within the UK business landscape. Half of the UK public reported that their local businesses were offering a range of different payment options for them to choose from, leading to more revenue streams for the businesses and a larger, more loyal customer base.
Reaching customers on a local and national scale
Despite the undeniable negative impact that the pandemic has had on the retail sector, there was one silver lining. With over two-fifths of Britons using local independent stores more since the start of the pandemic, and with half planning to continue shopping with these businesses now lockdown measures are eased, the pandemic provided a unique opportunity for independent retailers to keep local customers engaged. In pre-pandemic times, with commuters flocking to big cities and towns, many local, independent stores often struggled to compete. But with more people working remotely during the multiple lockdowns – and with this expected to be an ongoing trend – has helped to reinvigorate local communities.
Not only has the pandemic helped retailers engage customers locally, it has also prompted them to experiment with new ways to reach customers on a national scale. For example, the owner of Mrs Macs Sweet Treats, Emma Beattie, who runs a bespoke cake shop in Milton Keynes, had never sold online prior to the pandemic. But within three minutes of offering deliveries, her business sold 300 boxes of its treats — adopting digital payments helped her business to double its turnover by reaching a wider set of customers than ever before.
A brighter year ahead
The Covid-19 pandemic has been an unprecedented challenge for retailers across the UK. But whilst it forced many to make dramatic changes to the way they operate, it also provided an opportunity for them to explore new avenues, reach a wider audience and experiment with new digital tools and technologies. At the heart of this has been payments. By leveraging an omnichannel approach, those in the retail industry have the opportunity to better optimise their businesses in order to reach both current and new customers.