Connect with us

Shopping

Holiday Shopping Trends and Payments Innovations: Experience as Competitive Advantage – Retail TouchPoints

Published

4 hours ago

on

Holiday Shopping Trends and Payments Innovations: Experience as Competitive Advantage – Retail TouchPoints

As the holiday shopping season approaches, retailers face increased pressure to facilitate a seamless and secure shopping experience. This is an opportunity to not only capture share of wallet but also build lasting customer loyalty and trust.

Payments technology is central to the shopping experience. Innovations like biometrics and tap-to-pay have transformed how, when and where consumers shop. During the holiday rush the security and ease of the payments experience can be as crucial as product price or availability.

How can retailers update their payments systems to meet rapidly changing consumer behavior during peak demand? We’ve compiled a list of payments innovations that align with holiday shopping trends, highlighting why this is a critical time for retailers aiming to win consumer loyalty.  

Trending Expectations Among Holiday Shoppers

Memorable experiences: Creating a seamless journey from online browsing to in-store shopping, or a combination of both, creates positive experiences for consumers. Features like confirming local stock availability or “single tap” purchases via a phone differentiate agile retailers. Payment systems that allow for contactless transactions, curbside pickups and buy online, pick up-in-store (BOPIS) are becoming essential.

The online surge: While holiday shopping had been shifting from storefront to online for years, the COVID-19 pandemic fast-tracked this transformation. Black Friday and Cyber Monday are no longer confined to physical spaces or one-day events; they may span multiple platforms and run for days or weeks. Ecommerce offers convenience, variety and competitive deals. Integrating secure and fast payment gateways is vital to handle spikes in traffic and transactions.

Mobile-first consumers: With 91% of shoppers using a smartphone to make purchases, mobile commerce sales are expected to account for 62% of all retail sales by 2027. Mobile wallets provide the convenience shoppers have come to expect. Younger generations, especially millennials, increasingly rely on their digital wallet alone, with 28% (up from 25% in 2022 and 22% in 2021) planning to pay for gift purchases in 2024 using digital wallets. Retailers must optimize their platforms to capture this demographic.

Shopping season creep: Holiday shopping kicks off a little earlier every year. In 2023, over one-third of adults in the U.S. started their online holiday shopping in October. These customers are motivated by price, timing and the logistics of the holidays. Shrewd retailers launch deals weeks in advance to capture the early birds. Businesses that make payments more accessible, flexible and secure have a clear advantage. This also prepares them for the second and third waves of holiday shoppers.

Five Payments Innovations to Enhance Holiday Shopping Experiences

As consumer expectations evolve, payments innovations create key differentiators for retailers and exceptional shopping experiences for their customers.

  1. Omnichannel payment solutions allow customers to move effortlessly between mobile apps, websites and physical stores without duplicating data entry of accounts or personal information. Reducing friction provides convenience, increases conversion and lowers cart abandonment rates. Retailers that invest in integrating these systems benefit from happier, more loyal customers who shop more efficiently.
  2. Mobile wallets and contactless payments offer a faster and more streamlined checkout experience. These payment methods simplify transactions by allowing consumers to store multiple cards or bank accounts in a single digital wallet, reducing the need for manual entry. Contactless payments have recently surged in popularity based on two post-pandemic influences: speed and hygiene. By enabling quick, tap-to-pay transactions, retailers can accommodate busy shoppers during the holiday rush, minimizing wait times and ensuring a healthier shopping experience.
  3. Expanding access with Buy Now, Pay Later (BNPL) models that give consumers more control may help boost sales during the holidays when budgets can feel tighter. Empowering the ability to split the cost of a purchase into smaller, manageable payments over time makes larger purchases more accessible.

BNPL solutions appeal to a wide range of customers, but especially Gen Z and millennials, who carry less credit card debt and use BNPL at rates above 50%. But it is also popular among consumers who use debit more than credit. Offering BNPL options at checkout can increase basket sizes, reduce cart abandonment and help shoppers feel more confident.

  1. Personalization is a crucial driver of consumer loyalty. By leveraging data analytics, AI and machine learning, retailers can tailor offerings based on consumer behavior and preferences. Payment solutions that enable personalized discounts and flexible payment options create a more engaging shopping experience. During the competitive holiday season, personalized recommendations can significantly enhance customer satisfaction and encourage repeat business.
  1. Enhanced security and fraud prevention for customers. Dark web search records reveal cybercriminals begin preparing for Black Friday scams as early as January. As fraud ramps up to sync with holiday spending, innovations like tokenization, biometric authentication and encryption help safeguard sensitive data. According to McKinsey, digital trust principles are nearly as important as price and delivery speed, with over 50% of consumers choosing to buy online only from companies known for safeguarding customer data.

Payments Innovation is the Bottom Line

Deloitte Consulting forecasts 2024 holiday retail sales to increase between 2.3% and 3.3%, to nearly $1.59 trillion between November 2024 and January 2025. Retailers adopting the right payments strategy — from omnichannel solutions to BNPL options and advanced security measures — can capture more revenue, exceed consumer expectations and set the stage for long-term success for future holiday seasons.

Jean-Marc Thienpont is the Head of Omnichannel and Biometric Solutions at J.P. Morgan. He leads a team working to transform the in-store and ecommerce payment journeys into more seamless experiences for consumers and greater revenue for merchants. Thienpont will be responsible for ensuring J.P. Morgan clients can seamlessly, securely and efficiently accept payments in ways that redefine the path to purchase and create uniquely rewarding customer experiences. Prior to J.P. Morgan, Thienpont was Managing Director of Omnichannel Solutions at Adyen, where he built a worldwide omnichannel solution from the ground up. Before that he was EVP Strategy and M&A of Ingenico.

Related Topics:
Continue Reading