Digital Wallets and Your Business — Understanding The Potential During The Holidays
Every year, the holiday season brings about huge amounts of spending. We see consistent year-over-year increases in shopping between Black Friday and the end of December.
Tapping into the influx of money into the economy this time of year is an opportunity not to be missed by merchants nationwide. When doing so, it’s important to take note of what consumers are looking for.
Shoppers are looking for a frictionless shopping experience where they can:
- Find the products they want,
- Navigate the in-person or online experience quickly and easily,
- Be confident in the expected delivery date of the product,
- Pay using their preferred payment method.
At Pockyt, our team of experts focuses on in-store and online payment processing systems and a merchant’s ability to accept a consumer’s preferred method of payment. The number of payment options shoppers have available to them is numerous and growing every day. By keeping up with trends and integrating a solution that can accommodate the wide variety of payment methods — especially during this busy holiday season — merchants can set themselves up for long-term success and even tap into new holidays such as Singles Day in China. Source: https://www.businessinsider.com/singles-day-worlds-biggest-shopping-festival-starts-thursday-china-2021-11#singles-day-sales-far-surpass-us-purchases-on-black-friday-and-cyber-monday-4
Holiday Shopping in the U.S.
Gallup predicts holiday spending this year to increase with the average US shopper expected to spend $837 — an increase of about $30 from 2020. While the pandemic has disrupted the economy and holiday spending as a result, shoppers are expected to spend $1.3 trillion this gifting season and over $200 billion on e-commerce alone.
In addition to the expected spending increases, buying habits are shifting as well. Cyber Week, the week beginning the Monday after Thanksgiving when e-commerce brands focus on online sales, has transformed into a month-long event. And cyber week is only the beginning. Shopping behaviors have been trending this way for years, only to be amplified by the ongoing health pandemic.
Now, more than ever, consumers want to have options when shopping, even if they are shopping with one merchant. McKinsey reported an emerging trend among US consumers in the 2021 holiday season: shoppers are expecting omnichannel shopping experiences. Retailers are faced with the notion that having just a brick-and-mortar or virtual storefront is no longer enough. Shoppers are looking for interactive and integrated experiences they can access on multiple touchpoints that include not only your physical and digital store but also social media, gaming platforms, Amazon storefronts, and more.
By leveraging an omnichannel retail strategy, merchants can reach customers wherever they are. This makes it easier and more enticing for customers to shop with your brand and ultimately leads to increased sales and customer loyalty.
As part of your omnichannel strategy, it’s important to consider how customers are paying for your goods and services. Though the motivations for using a certain form of tender online may differ from in-store, it’s essential to offer a similar experience no matter how your customers are reaching your business.
Credit Card Fraud During the Holidays
The holiday season is a peak season for credit card fraud. People may have longer credit card statements than usual and are not as alert regarding suspicious activity or virtual fishing communications that come their way.
While credit cards provide a good insurance policy for cardholders against fraudsters because of their zero liability protection, this becomes a burden on merchants. If a credit card is compromised and used to make unauthorized purchases, a dispute will be filed by the cardholder. The credit card issuers will then withhold funds from the merchant until the dispute is resolved.
The best way to avoid chargebacks? Encourage customers to use the chip feature on their credit card or, even better, their digital wallet. Paying with a QR code generated by a digital wallet essentially eliminates the risk the information will be compromised because each transaction uses a unique token. The token can only be used for that single transaction making it nearly impossible for fraudsters to steal.
Payment Processing & The Shopping Experience
While free shipping and discounts are two of the biggest factors influencing buyers’ decisions during Black Friday and throughout the rest of the holiday season, the shopping experience in-store and on a retailer’s website or app heavily influences the buying decision as well.
The smartphone not only provides consumers a gateway to a business’s online shopping experience or native app, but it can also be essential to the in-person shopping experience. Although many consumers are primarily using their smartphones to find your store location or browse products available for in-store pickup, their smartphones can also serve as an important piece in the checkout process.
While many US consumers’ preferred method of payment is credit or debit cards, Apple Pay, Google Pay, PayPal and even Venmo are all becoming increasingly popular forms of tender. These alternative payment methods are not only easier ways to pay — you don’t even need your wallet — as mentioned previously, they also provide a faster, more secure checkout process. Faster checkout means less time in-store or online, a better customer experience, and fewer interactions during the process — which is advantageous to both the customer and the retailer.
These forms of tender are all considered types of digital wallets. Although they differ dramatically from their Asian super app counterparts — AlipPay, WeChat Pay, Kakao Pay, among others — the western world is gradually adopting these alternative payment methods.
Improve Your Shopping Experience
By ensuring your in-store and online shopping experiences are streamlined and seamless, you are taking an important first step to decreasing friction in the experience your customers have with your business. Collecting payment information is often viewed as one of the biggest sources of friction in the customer journey — but it doesn’t have to be. Merchants may be wary of implementing new ways to process payments because of the heavy uplift required on the backend — but that’s no longer the case.
Pockyt integrates directly with retailers existing in-store or online POS, meaning that the heavy lifting will not fall on merchants. We’ve done the work, so you can enjoy the benefits. Broaden your customer base and strengthen your security this holiday season by expanding your payment processing system with our retail solutions.
To learn more about integrating a frictionless shopping experience with your business and accepting digital wallets, contact our team of experts today.