Today’s retail environment is hyper-competitive; and retailers are under continuous pressure to stay relevant as consumer expectations evolve. Here, Luke Griffiths (pictured below), general manager, Klarna UK, explains why that means it’s crucial that retailers consider the shopping journey from browsing through to purchase, delivery, and returns. This journey needs to be smooth, simple, and uninterrupted, otherwise, consumers will simply turn to one of their many competitors at the click of a button.
At a time when consumers are empowered with choice, and market conditions are increasingly volatile, new technologies can help brands and retailers drive valuable business and improve the customer experience.
It’s no longer good enough for retailers to wait on the sidelines while others make the first move into innovation – something which was highlighted in a recent white paper Klarna produced in association with Internet Retailing. In it, we explored the main qualities needed to be successful in today’s ever-changing retail sector.
Here’s what we learned:
Innovation doesn’t have to be big
As technology and consumer behaviours have changed, so has the traditional retail model. Once favoured by consumers, in-store shopping has been steadily losing ground, driven by the advances in e-commerce and mobile shopping.
Retailers looking to keep pace with their customers’ constantly evolving needs must be ready to embrace innovation. That being said, however, they shouldn’t innovate for innovation’s sake. Any new technology has to solve a customer problem. Retailers need to understand the value of focusing first and foremost on the basics – such as UX and payments – before turning to more flashy technology such as smart mirrors or AR.
Take payments, for instance. Through small and steady updates, chip & PIN evolved into contactless cards – offering a quick and convenient alternative to cash for low-value transactions. This is a key example of technological innovation helping to make the in-store checkout process more efficient and convenient by eliminating hassles, like long checkout lines. In fact, contactless has been so widely embraced that, according to the UK Cards Association, there are now over 101 million contactless debit and credit cards in Britons’ wallets, with Barclaycard expecting contactless spending to soar 300% by 2021.
Going forward, the winning retailers will be those that are agile and able to quickly innovate in ways most beneficial to their customers.
Flexible payments are make-or-break
In retail, the payments process is intrinsically linked to the overall shopping experience and is increasingly the deciding factor in whether shoppers convert or not.
Retailers can’t afford to ignore more innovative payment options. This was highlighted by recent Klarna research, which found that 53% of shoppers are looking for new, easier ways to pay online; while 56% would buy more online if there was more variety in payment options available.
This shows that there is considerable demand for payment innovation from consumers, which represents a huge opportunity for retailers. By embracing flexible payments – such as ‘buy now, pay later’ and ‘pay in instalments’ – retailers can significantly reduce the complexity of the checkout process, boosting customer loyalty and conversion rates.
Change doesn’t happen in a vacuum
Whilst innovation is all well and good, it won’t stick if it isn’t embraced by the company as a whole. It’s vitally important that retail leaders bring the rest of the organisation on the journey. After all, true change depends on collaboration and sharing of ideas; and success will only happen if employees at all levels are engaged and involved.
Remember, ideas don’t always come from experts. Sometimes the greatest innovations come from novices. What forward-thinking and successful retail leaders have in common is the fact that they encourage employees across the business to participate in transformation meetings and brainstorms.
Employees are the people on the frontline of UX, product management, or customer service, so their experience and insights are invaluable. Building a supportive culture that empowers them to make decisions and take action is a key way to incentivise and inspire teams and foster innovation.
It’s becoming increasingly challenging to retain brand loyalty as today’s consumers prioritise ease of use and convenience from start to finish when they shop. Retailers must remember that being a first-mover holds significant business advantages – the most obvious of which is that there’s no competition in the market and presents a huge untapped customer base.
To compete with retail behemoths like Amazon, there is no silver bullet. Ultimately, fortune favours the bold, and success depends on anticipating and understanding the needs of customers. Retailers must be able to adapt quickly – keeping pace with, and embracing, new technologies both online and in-store and evolving along with their shopper’s needs – or risk being displaced.