Globally, and locally in the UAE, the COVID-19 pandemic has accelerated changes in consumer behaviour and spending patterns. A survey by Adyen, the global payments platform which started operations in the country last year, found several significant consumer trends that will shape commerce in the near future.
“Rather than attempting to predict the future, our purpose as a tech-first payments company is to give merchants the tools to adapt and thrive, no matter the environment,” said Sander Maertens, Head of Middle East for Adyen.
“The already ongoing shift towards e-commerce, particularly in the UAE, accelerated during the pandemic. Consumers swiftly migrated online, causing retailers, in turn, to pivot to e-commerce to be where their customers are, bringing in innovations such as QR codes to enable contactless payments. Retailers need payments solution that helps them be agile and make the shift to unified commerce.”
Adyen pointed out three major trends…
Trend #1: Shoppers want cross-channel flexibilities
The pandemic forced businesses to transfer physical inventories to digital channels. A majority of shoppers (87%) want retailers to maintain cross-channel flexibilities on digital and physical offerings. E-commerce is unlikely to completely replace physical stores, as consumers are still deeply attached to the social experience of shopping.
Hence, retailers need to think of unified commerce – offering customers the best experience, no matter where they shop. Having online, in-store and in-app transactions in one platform allow them to deliver the cross-channel experiences customers want. Businesses that can combine their physical and digital worlds to create a fluid, channel-agnostic experience, which prioritises the customer are destined for success.
Retailers would also need to continually work on loyalty; improving how they reward shoppers for shopping with them. This is where unified commerce can pay dividends for retailers. It enables a seamless link between channels – opening up new shopping experiences that boost loyalty.
According to the Adyen report, two in five shoppers would be more loyal to a retailer that lets them shop in-store and finish shopping online, or vice versa. More than half (60%) of shoppers said they would be more loyal to retailers who would have an out-of-stock item delivered to their homes.
Shoppers also expect a unified brand experience, online or offline. A good example is the rise of personalised virtual shopping. From home, a shopper can join a video call with a sales representative to see available collections in the store and receive advice. When the shopper is ready to purchase, the representative sends them a secured payment link by message and the transaction can be settled in seconds.
Trend #2: A curated retail experience
Physical shopping is not going to change anytime soon in the UAE. However, the role of the store is changing. If consumers are going to journey to a retail or dining destination, it needs to offer something extra, without losing any of the convenience that they love about online.
Retailers are increasingly viewing their physical environments as showrooms; beautiful spaces where they can engage consumers in their brand and differentiate themselves through experience. Retail properties now need to bring offerings to life in a way that impresses people.
More than half (52%) of shoppers feel the ambience and layout of the store are important and should be curated like a gallery. The role of the store has evolved from being a showcase for inventory to a more experiential space.
Trend #3: The rise of cashless payments
According to a study of the UAE consumer payments landscape from Abu Dhabi-based fintech enterprise PayBy, the majority of consumers have pivoted to cashless payments as a more hygienic, safe, and secure option in the pandemic environment.
Awareness and familiarity with mobile wallets were high across different groups of respondents. More than half (55%) have used mobile wallets several times. Consumers cited the ease of access, convenience, and quick transfer as key reasons for using mobile wallets.
Adyen data showed more than half (54%) of shoppers are concerned about the cleanliness of payment terminals and prefer more hygienic payment methods, while nearly half (49%) want brands to use in-store technology to reduce contact. Merchants have responded to consumer demand by providing contactless terminals or QR code-based payment methods.
Tokenisation technology, which allows customers to store card details or use a digital wallet, has been popular. Consumers want a frictionless experience, without looking for their card when they can pay using a device in their hands.
As the pandemic evolves, businesses must equip themselves with tools that allow fast responses, and payments technology plays an important role. A unified commerce partner allows merchants to centralise payments across all channels and regions, with the flexibility to open new sales channels and roll out new customer journeys quickly and at scale.
