Explore the latest retail analytics and tech trends in this three-part series and deep dive into the growing integration between online and offline in global retail.
There are extraordinary benefits for retailers bold enough to take the leap with some of the latest retail tech. Here are the notable retail payment technology trends to watch in 2023.
Get the complete update on 2023 Retail tech and analytics trends. In part one: retail interactivity and how to boost operational efficiency by leveraging customer flow trends. Or, get practical tips for incorporating e-billing, robots, and the Metaverse in your in-store experience in part two.
Retail payment technology trends in 2023: Worth taking notice?
McKinsey’s outlook for global payment revenues tops US$3 trillion by 2026. Retailers with a future-forward outlook will no doubt monitor the inter-related trends which are intricately linked to, and shaped by, consumer behavior:
Alternative payment methods move from margins to the mainstream
The growing participation of Gen Z and Millennials in the economy is a key driving force behind shifts in the payment technology landscape, as these digitally native consumers are intuitively more comfortable with digital innovation. Retailers who match this digital-first, innovation-friendly attitude and are willing to embrace alternative payment options such as peer-to-peer (P2P) payments and digital wallets will bolster their brand image as pioneers. For example, the latter no longer raises eyebrows, and bold innovation in this area is poised to only intensify.
By Now Pay Later, short-term financing empowers budget-conscious customers
Cash-strapped consumers are embracing retailers offering flexible payment plans, allowing them to pay off purchases over time but get their goods immediately. These typically interest-free, short-term, and single-purchase credit options are helping to drive sales in tough conditions. It also allows for alternative revenue opportunities for retailers in partnership with financial institutions — with an estimated 2028 market size of more than €20 billion, according to Klarna’s Lucie Gimon. [FN(1]
Contactless payments are being incidentally stress tested
Contactless payments have witnessed a significant surge in recent years, driven by the convenience and speed they offer Consumers are actively exploring their contactless payment options, whether it’s scanning a QR code (a market valued at US$11.67 billion in 2023), using Google- or Apple Pay, or tapping an RFID wristband at checkout. While they offer both convenience and hygiene advantages to consumers, retailers could leverage these in emerging markets, where smartphone usage is prevalent, but card infrastructure remains unreliable or absent.
- First, they offer a faster and more streamlined checkout experience, reducing transaction times and minimizing queues — enhancing overall customer experience.
- Second, contactless payments enable retailers to tap into valuable customer data and insights.
Unified commerce becomes indispensable to driving competitive advantage
Unified commerce gives retailers a single, interconnected system of records that cover every channel. By integrating the back-ends, retailers can provide consumers with a seamless experience akin to omnichannel while gaining comprehensive insights into their preferences, behaviors, and purchases.
Whether a path to purchase involves a visit to a brick-and-mortar store, surfing an e-commerce platform, using a mobile app, crawling social media, or any combination in-between, retailers can now gather an uninterrupted view of their consumers, including tracking their purchases. By breaking down barriers between physical and digital realms, centralizing systems, and enhancing data insights, unified commerce improves customer satisfaction, enables personalized experiences, and streamlines operations — ultimately driving business growth. Let’s dig deeper into how it enables retailers to leverage purchase data.
How connecting payment information to transactional data amplifies insights in a unified commerce setup
Unified commerce offers retailers a single/consolidated platform(s) to provide customers with diverse payment options across multiple touchpoints while gathering transactional payment and purchase data in one place for enhanced shopper insights. There’s been a +23% jump in retailers planning to invest in building access to payments data in 2023, and here’s why — it offers:
- Financial transparency: Integrating payment transaction data with invoicing and POS data provides a comprehensive view of financial transactions. This allows businesses to gain better visibility into revenue streams and identify payment trends.
- Demand Supply Management: By tracking sales and payment data together, businesses can gain real-time visibility into product demand which helps you to manage inventory levels better.
- Cross-channel customer visibility: If a consumer permits a retailer to connect banking transactions it gives that retailer visibility into previously unknown purchases that may have been made across other channels. This could allow retailers to tailor offers, and suggest products or payment options accordingly.
- Personalization: The integration of payment data with POS data enables businesses to gain deeper customer insights. Analyzing payment behavior and purchase history can provide valuable information about customer-preferred purchase channels, buying patterns, and loyalty.
The key promise of unified commerce is its potential to help retailers turn mechanical transactions into personalized relationships with aggregated, organized, and meta-tagged data.
The unified commerce approach gives more depth to how a consumer shops i.e., when and where they get it, and how they pay for it. Whether that’s a tailored loyalty program, personalized sales bundles, or dynamic pricing, this approach delivers the data needed to craft something irresistible.
Before you rush to update your retail payment tech…
While everything from the normalization of alternative payment methods to the new viability of unified commerce signals a positive shift towards tech that enables seamless transacting as part of a truly consumer-centric service, it’s not a one-size fits all.
Limitations of circumstance or within the technology itself may shape both the time and choice of tech for even the most future-forward retailer. Using unified commerce as the example, key considerations include:
- Gathering connected data across sales channels is limited to digital transactions,
- Platform providers must build privacy-first — only tracking shoppers who give consent — to ensure you don’t fall foul of GDPR/similar regulations,
- The requirement for shoppers to agree to tracking through the platform’s Terms and conditions may discourage some from finalizing their purchases,
- Whether you own your channels and can fully customize them as part of a personalized, omnichannel shopping experience,
- Securing the substantial investment required to implement a unified commerce system may not be immediately possible.
Start every successful business change with an expert plan
Elevate your growth trajectory with ready access to the data-led, expert insights you need to make discerning choices about your retail payment technology plans. Connect with the GfK Retail team via the form on this page and get a personalized look at how payment tech and unified commerce could benefit your business.
