Covid-19’s Impact on the Future of Payments and Retail Will Be Far Reaching
Since the start of the COVID-19 pandemic, retailers, business leaders and consumers have all had more questions than answers regarding what the “new normal” might look like. As we approach the holiday shopping season with an unprecedented level of uncertainty, one thing rings true for the changing scope of payments and fintech: business and consumers alike need to prepare for the continued, swift shift to mobile.
During Holiday 2020 and beyond, the brands that excel are those that actively look for ways to overcome new challenges by creating enjoyable, seamless experiences to engage customers across the channels they find most valuable. This includes prioritizing a truly frictionless experience and choices like in-store pickup, curbside delivery, and expedited shipping at no additional cost.
Digital Wallets Are Experiencing Their “Come Up”
According to a recent survey from Blackhawk Network, eighty-eight percent of shoppers surveyed across the eight countries use a digital wallet of some kind. In the U.S., before the pandemic hit, less than 38% of Americans surveyed said they were using digital wallets to make purchases more or as often as the year before. As the economy began to reopen, that number has jumped to 55%.
As Covid-19 reshapes our entire perception of digital payments, it won’t be enough for mobile wallets to merely store value. From cash to rewards and gift cards, mobile wallets must transition from simple to unlocked, truly useable resources across technology, retailers and buying experiences. Retailers and consumers alike are looking for more ways to utilize the value of their mobile wallets to spend across a variety of situations, and redeem points and gift cards seamlessly across the shopping experience.
But getting consumers to tap into mobile wallets is just the first step, and in a post-pandemic world, fintechs continuing to innovate will be key. We must move forward from simply unlocking the value stored in mobile wallets for customers, to moving sharply toward making that wallet the go-to payment source across all channels. As we continue to see, choice will ultimately win out in the long run. The biggest winners in the next phase of the payments race will be the ones that are able to offer several layers of the mobile experience, including layering in payments, rewards and impeccable user experiences.
Rewards Still Need to Feel Rewarding—Maybe Now More Than Ever
For industries such as airline and hotels, where rewards are a cornerstone of customer engagement, the pandemic has caused a major decline in reward usage—limiting a critical touchpoint with consumers. Now more than ever is the time for brands to make the shift towards truly tailored and customized reward programs in a way that benefits consumers far more than before.
Consumers increasingly want (and expect) their rewards to be their choice, and we’re seeing a large opportunity for brands to make a shift toward something that is meaningful to a consumer. After all, if they feel a motivation and connection to a brand, that signifies a level of attention and care that may have been missing during the height of the pandemic—and for some brands, even before. Those improvements to rewards, including making them easier to access and redeem digitally, are what will propel those stronger brand-to-consumer connections we’re working to grow in the next normal.
Gifting Will Still Have A Major Impact
Online and mobile shopping habits spread rapidly when social distancing was introduced, and digital gifting emerged as a multigenerational lifeline—evident by unprecedented growth in recent months. For instance, based on Blackhawk Network’s partners’ sales data, gift cards sold directly from a restaurant or merchant’s own website since mid-March are up 92 percent from 2019. And with U.S. e-commerce sales expected to climb by 18 percent this year, the rapid adoption of digital gift cards, or eGifts, is here to stay.
For brands looking to tap into this digital gifting trend for the holidays, a focus on several key factors will be the “make or break” moment for their success. Brands should ensure that they enhance the ‘discoverability’ of their gift card options, especially on mobile websites and mobile apps. Discoverability is the first step to encouraging a shopper to purchase your gift card. With mobile payments on the rise, it’s not just about consumers finding easy gift card options, it’s also about ensuring your brand is ready for those contactless payment opportunities, integrating gift card redemption and purchase into mobile wallets and online ordering in a seamless way.
At the start of the crisis, omnicommerce solutions were a new thing for millions of consumers and businesses (especially small businesses). The pandemic has rapidly shifted people’s mindsets, needs and adoption habits in a way that experts were once predicting would take years. With many consumers trying omnicommerce solutions for the first time, they still maintain their existing expectations of the highest levels of service and functionality.
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