All too often, when it comes to gaining new customers and retaining existing ones, brands and retailers tend to focus on fine-tuning their marketing and advertising messaging but miss assessing and acting on one critical component: how customers pay for their purchases.
But over the past year, businesses across the board have realized that if they want to retain and maintain any kind of loyalty, not only is offering up more ways to pay far more critical but building experiences around their payments process is just as imperative. And that is something that has further grown in importance as consumers have embraced digital-first shopping and payment habits.
From buy now, pay later (BNPL) options to contactless payments, innovative payment offerings have exploded over the past year. And those who have failed to meet their customers’ payment expectations have lost their customers’ loyalties to other players in the space. “The customer really wants more control and more transparency,” said Andrew Rostami, president of the buy now, pay later (BNPL) solution, Citizens Pay.
“And COVID-19 has accelerated this mindset of being really prudent.”
According to eCommerce payment provider PPRO, 42 percent of U.S. shoppers will forgo their purchase if their preferred payment method is not available, whereas 18 percent of U.S. consumers will confidently use alternative payment methods like Klarna or Afterpay if they were referred to them by family and friends.
Merchants that have succeeded in keeping up with their customers’ payment preferences have thus stumbled upon a new loyal customer base. For example, those who implemented buy now, pay later options found that customers are likelier to add more items to their cart and less likely to make returns, which ultimately results in an increase in average order value (AOV).
Furthermore, flexible payment options allow purchases to be paid for overtime and remain at the top of mind for the customer, usually leading them to use the product or service more and build a more positive association with the merchant.
Mobile wallets 2.0
Businesses that have succeeded in delivering contactless payment experiences through mobile wallets have also succeeded in gaining more traction in-store, especially as consumers have looked to engage with brands and retailers while still keeping socially distant.
Merchants that have succeeded in utilizing mobile wallets to the fullest are those that have layered in experiences that go beyond payments. These businesses have been well-positioned to obtain and retain new customers during this time. Take it from the nation’s leading bridal and special occasion retailer David’s Bridal. The company launched a loyalty solution powered by Popwallet to not only allow brides but everyone involved on the big day to engage with its loyalty and rewards program while racking up potentially thousands of dollars in expenses.
Consumer-packed-goods (CPG) brand Hot Pockets similarly got crafty in its approach to utilizing mobile wallets during COVID-19 and chose to award Twitch Bits, a new type of digital currency, to customers who purchased Hot Pockets in physical stores.
The campaign, powered by Popwallet, proved to be beneficial not only to the CPG brand but also to any retailer who kept the product in stock. Here’s why.
To participate in the program, consumers were first asked to signup by providing their mobile phone number to add the Hot Pockets For Bits mobile wallet card to their wallet. From there, the participant had to purchase Hot Pockets in-store and obtain a physical receipt to redeem Twitch Bits. The strategy not only led to more consumption of Hot Pockets but also created brand awareness while generating foot traffic to all the stores that carried the brand. So as participants looked to purchase their Hot Pockets they also potentially purchased and checked off other items on their grocery list.
After obtaining a receipt, Hot Pockets For Bits participants could turn to the mobile wallet card they originally added to scan their receipt to redeem their Twitch Bits. From there, consumers could use the mobile wallet card to redeem their Bits and cheer on their favorite streamers found on Twitch.
The campaign proved to be a knockout and is now up for a Shorty Award.
Then, there are other mobile wallet experiences that consumers are increasingly favoring, such as digital gift cards. In an effort to bridge the gap between the convenience of in-store shopping and purchasing digital gift cards (eGifts), something normally sold online, convenience store chain Oxxo is enabling shoppers to buy a broad selection of digital gift cards to in-store shoppers.
In essence, merchants looking to provide contactless offerings through mobile wallet answer a need and demand, while also simultaneously creating an effective communications channel. Through mobile wallets, merchants now have countless opportunities to personalize their customers’ experiences right on their mobile phones.
As millennials and Gen Z consumers continue to gain spending power, delivering a personalized experience to them in a place where they spend most of their time will continue to be critical. Furthermore, creating and elaborating on experiences around the payments process will continue to proven fruitful to brands and retailers looking to increase customer loyalty.