payments – NBK Retail

Knowing your customer is essential in the best of times. In a post-pandemic world, it will be the difference between survival and failure.

I had the pleasure to work with Klarna on their latest report Clicks and Cliques: Understanding Modern Shoppers where we identified five distinct shopper tribes for the post-COVID world. Based on a survey of 4,000+ consumers across Europe, the UK, USA and Australia, the report examines how shopping behaviour has evolved and how retailers can stay relevant in a fast-moving world.

Good value for money is naturally a top priority for shoppers this year, with more than two-thirds (67%) suggesting it has become more important since the start of the pandemic. It’s followed by promotions and deals (60%), a good reputation and trustworthiness (60%) and having a wide range of products available (58%) — perhaps fuelled, in part, by shortages on the shelves earlier in the year.

Over half of respondents said that an easy returns process (55%) and next or same day delivery options (51%) have become more important this year — naturally coinciding with 49% doing more of their shopping online and 44% doing most or all their shopping online now.

The ability to pay flexibly has also grown in importance, according to 45% of respondents — and this can be a real dealbreaker. Four in ten (42%) prefer to shop from brands or retailers that offer flexible payment options, while three in ten (32%) won’t shop from those that don’t.

Commenting on the research, Luke Griffiths, CCO at Klarna, said: “This year’s events have transformed the way we browse and buy, reinventing our relationships with brands and retailers and accelerating change at an unprecedented rate. Merchants must keep a finger on the pulse of their customers wants and needs and adapt their products and service offers accordingly to build a connection with shoppers to drive loyalty and, ultimately, sales.”

Natalie Berg, Retail Analyst and Founder of NBK Retail, added: “The retail industry is no stranger to disruption, yet nothing in our lifetime has jolted the industry like Covid. As retailers look to navigate the new normal, resilience and agility will be essential for survival. There will be no return to the status quo. The days of being everything to everyone are well and truly over: in order to find their tribe, retailers need to be bold about who they are and what they stand for. Opportunities have emerged, enabling retailers to reimagine both physical and digital commerce for the future.”

Download the full report here.

This week I’ve taken part in the Retail Week Tech Race. Using only chip and pin, I had to spend as little as possible on: a home assistant, Asos branded clothing, 500 penny sweets, original Nintendo Game Boy, personalised item, £5 scratch card and a build your own robot arm.

The aim of the race was to demonstrate the importance of payments as a frictionless part of the customer experience.

My opponents:

Team Cash – George MacDonald, Executive Editor, Retail Week
Team Contactless – Andrew Busby, Founder & CEO, Retail Reflections
Team Crypto – Peter McCormack, Cryptocurrency Trader, Miner, Blogger and Advisor, What Bitcoin Did
Team Mobile – Rachel Arthur, Chief Intelligence Officer at The Current Daily

Team Chip and Pin: Key takeaways

1) Shopping habits have evolved, payments not so much.

My initial reaction to being assigned chip and pin? NO. ONLINE. SHOPPING.

That alone was going to be a challenge for me. And that’s not because I don’t shop in stores, but when faced with a long list of disparate items – some of which are near impossible to find in a bricks & mortar shop – my first instinct is to get online.

Having to physically trek around individual stores (in 32 degree heat no less) in the hope of some very specific items being in stock was a stark reminder of just how spoiled for choice we are today. We have access to millions of products right at our fingertips – and they turn up on our doorsteps the same or next day!

Even if I attempted to use click & collect, I would have had to pay for the item online which ruled out using chip and pin. Argos was an exception here, so reserve and collect (ie. pay at the store) came in handy. I even resorted to calling a few stores to see if items were in stock – very 2003!

2) With low-value items, cash is still king.

Bearing in mind that the goal was not only to source all items on the list but to do it as cheaply as possible, I ran into some issues when trying to purchase low-value items like the £5 scratch card and personalised item. Retailers would charge an additional (50p) fee or simply wouldn’t accept card payment. It was a reminder that, in some instances, cash is still king.

3) Less choice on the high street further limited my options with chip and pin.

This year’s high-profile collapses of Maplin and Toys R Us made it more difficult to source some of the more peculiar items on the list – ie. build your own robot arm. The superstores I visited also, unsurprisingly, had a much-reduced electronics section as this category has largely shifted online.

In the end, I managed to purchase 5 out of 7 items on the list using chip and pin – all but the Asos-branded item of clothing and original Nintendo Game Boy. It was only at the very end that I had a lightbulb moment – I could have saved myself a ton of time and energy by using Amazon Top Up!

Main takeaway of the race? Consumers demand to be able to shop on their own terms and they expect that experience to be completely and utterly seamless. But when it comes to payments, there’s still a whole lot of friction.

You can hear all about the #RWTechRace in our session at the Retail Week Tech conference, 12-13 September, and for video updates of the race check out the NBK Retail YouTube channel.

https://www.youtube.com/watch?v=P1P4TLdtOcU