By Dan Edelman, vice president and UK general manager, Merchant Services at American Express
The way we search for, and purchase products has evolved significantly over the last decade, thanks to the influence of social media, and the freedom and power that cards and technology have enabled. Whether you’re paying for a taxi ride via an app, or tapping your card to buy your weekly shop, quick and simple payments are an everyday normality.
Yet despite living in a digital first world, there is still a possibility that retailers can fall at the final hurdle if their payment experience isn’t as seamless as the rest of the journey, both on and offline. A clunky, multi-step payment process, or lack of choice when arriving at checkout can result in customer frustration, basket abandonment, and reduced loyalty to the retailer in question.
Paying the price of poor processes
A common pain point for retailers is basket abandonment. There are various reasons why this happens, from customer frustrations around discount codes not working, having to re-enter card details, or being forced to create an account. In some cases, the customer might be treating the cart as their ‘shopping list’ with a proportion of them returning to purchase at a later date.
However, our research from this year, which explored the current drivers of brand loyalty and how retailers can engage customers in the current economic climate, revealed an even bigger challenge for retailers, with customers blacklisting them all together following a poor payment experience. Just over two fifths (42%) of shoppers have taken their custom elsewhere after experiencing a slow checkout and payment process, and over a quarter (28%) wouldn’t return to a store due to a lack of payment options.
Seamless experience online and instore
The influence of the payment process on customer loyalty isn’t just applicable online either. Shoppers demand choice and speed when checking out in store, with our research revealing that a third of shoppers (32%) see having the option to use their preferred payment method as the most important factor in creating a positive payment experience instore, followed by a similar number (31%) who see being able to use self check-outs as the most important factor .
A competitive edge for independent stores
As we head into the busy festive season, customer experience has never been so important. The so called ‘golden quarter’ is a particularly critical time for smaller, independent retailers, with 86% citing the Christmas period as a vital revenue driver for their business.
Whilst independent retailers think about special discounts, experiences and collaborations, it’s important that they also consider their payment and checkout experience. With a fifth (21%) of shoppers saying they are less likely to shop locally if those stores have fewer payment options than larger competitors, it’s essential even smaller retailers have the right payment options in place to help them gain a competitive edge.
Payments as a loyalty driver
It’s evident that the importance of maintaining a ‘frictionless’ payment experience is a key factor in driving customer loyalty and avoiding customer dissatisfaction. The recognition from merchants that payment choice is important in attracting new customers has been a driver for significant growth within our merchant network in recent years.
Shop Small to back independent retailers
Alongside driving loyalty from current customers, offering a diverse range of ways to pay also gives merchants access to a new customer base. American Express’ Shop Small campaign, for example, drives footfall by incentivising our Cardmembers to shop with independent retailers by rewarding them with cashback on every purchase they make with participating businesses.
The Shop Small Offer launches on 1 December, on the eve of this year’s Small Business Saturday, which aims to showcase the valuable role small businesses play in communities across the country. American Express is founder and principal supporter of Small Business Saturday in the UK.
For more information on Shop Small please visit here.
