Three Strategies To Tap Into A $1.5 Trillion Opportunity

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By Jennifer Goforth Gregory

Is the customer at the checkout making their first-ever purchase? Or are they a loyal patron who’s already spent thousands of dollars online? Having this knowledge can make the difference between a retailer crafting a customized experience that leads to future spending and providing an interaction so underwhelming that the consumer never returns.

Adyen’s Retail Report 2023 found that inflation-squeezed consumers expect more than ever. They’re increasingly deliberate in their buying habits, and prioritize value, affordability and convenience. Many retailers find it challenging to respond because they have incomplete customer profiles scattered across disparate systems. These range from in-store point-of-sale tools to records of online and in-app purchases.

Financial technology platform Adyen addresses this issue for retailers by centralizing customer, product and payment data. It’s called unified commerce, and it provides retailers with industry-leading insights into their customers, while streamlining and securing transactions.

According to Adyen’s survey of 12,000 retailers across the world, detailed customer data can significantly boost the bottom line. Retailers that embraced unified commerce tools in 2022 experienced an 8% growth in their revenue. Adyen estimates this represents a $1.5 trillion growth opportunity for the global retail sector.

Here are three strategies to unlock new levels of opportunity and agility using Adyen’s tools.

1. Personalize Rewards: Exceed Customer Expectations To Foster Loyalty

In its report, Adyen collected answers from 36,000 consumers worldwide and found that more than two-thirds (68%) want a shopping experience where rewards are personalized to them, and almost half (48%) want retailers to remember their preferences and purchase history for more customized browsing.

The solution isn’t another loyalty card for a customer to keep track of. Instead, one solution is card-linked loyalty, which allows businesses to see a full 360-degree view of a customer’s purchasing history–in-store, in-app and online–with the tap of a credit or debit card.

“The more you understand the customer, the more you can personalize the experience so they can have more loyalty and increase purchases in the long run,” says Brian Dammeir, Adyen’s Global Head of Unified Commerce.

It used to be a bonus when a brand recognized these cross-channel purchases, but Dammeir says doing so is going from being a “nice” to a “must”. He says we are moving toward a future where the difference between in-person and digital transactions disappears—customers will simply transact. Retailers that move now can capture the immediate revenue gains while being prepared for the future.

Economic uncertainty is even more of a reason to invest in unified commerce tools. “In times of hardship, people come back to the retailers giving them the best experience, to whom they feel most personally loyal,” Dammeir said.

Rewards don’t have to be high-value to make a big impact; while a loyal customer at a luxury boutique will expect champagne and a private room, a repeat customer at a fast food restaurant may feel acknowledged with a free ice cream.

This technology also unlocks other sought-after customer perks, such as in-store web returns, or making in-store selections and finishing the purchase online.

2. Expand Into New Markets: Seamlessly Capture Untapped Opportunities

One of the best ways to find new customers is by analyzing your current ones. With Adyen’s tools, retailers can leverage their detailed current customer profiles to find other countries and regions with a high concentration of similar consumers.

Expanding into these foreign markets used to be difficult, with businesses having to take into account local payment methods, currency conversion, taxation and banking requirements. Adyen’s global footprint provides a fintech ecosystem that’s smooth and unfragmented, meaning expanding businesses don’t have to worry about sourcing new third-party acquirers or payments providers.

Payment methods, for example, are largely driven by cultural norms. A unified commerce solution lets businesses quickly add expected payment options for the region, seamlessly entering the market without purchasing new systems or technology.

“If you come from the U.S., you think that the world uses credit cards and [digital wallets],” says Dammeir. “If you go to the Netherlands, very few people use credit cards. QR code payments are huge in China and Brazil. It’s a different dynamic everywhere.”

Sixty-eight percent of retailers plan to expand into new markets this year. Dammeir says that to reduce expenses, many of them start by looking for new markets in other English-speaking countries, such as the U.K., Australia and Singapore.

But even here in the U.S., there are overlooked payment types that can bring in new customers. Many under-banked customers use mobile payment apps for example. By seamlessly adding these options to point-of-sale devices, retailers can reach an entire customer base that’s often untapped and underserved through no fault of their own.

3. Fight Fraud: Protect Customers And Your Bottom Line With Powerful Security Tools

Retailers use trained and vetted security guards to help protect against in-store theft, but how rigorous are their online anti-fraud tools?

It’s an area of uncertainty that unsettles U.S. consumers, with 61% of them saying that fraudsters are making online shopping less attractive, and 30% say they won’t shop on an outdated website.

Fraud is a growing concern for U.S. retailers. Nearly half (49%) said fraud attempts had increased in the past year, compared to 39% globally. They are fighting back by investing in fraud and risk management systems, and embracing AI to stop illicit transactions.

Adyen provides network-wide insights and uses machine learning technology to take online security to new heights. This unified approach gives retailers an anti-fraud Swiss army knife, with tools including:

  • ​​Advanced machine learning that adapts to changing fraud patterns
  • Deep analysis of shopper behavior to spot telltale signs of fraud
  • Manual reviews of high-value transactions and attempts made from high-risk countries
  • A/B testing of risk profiles that balance risk and revenue

These tools don’t only help detect criminals; they can also avoid alienating valued customers. “A lot of people think it’s about having data on who the fraudsters are, but more often than not, it’s about having data on who your good customers are,” Dammeir said. “Because the cardinal sin is to decline a transaction for someone who is loyal to you.”

To gain a better understanding of why a connected industry is a disruptive one, read Adyen’s full 2023 Retail Report here.

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