Business
How retailers can remain agile in 2023
Global Banking and Finance Review
Company
By Linda Weston, Head of Core Product, Barclaycard Payments
The annual shopping events of Black Friday and Cyber Monday set the tone for festive shopping period, and this year the figures suggest there is still appetite amongst consumers to nab a bargain, despite the increasing pressure on purse strings.
Barclaycard Payments’ data showed an increase in the volume of transactions in-store and online of 3.5 per cent on Black Friday 2022 compared to 2021, and an increase of 5 per cent on Cyber Monday. This is particularly encouraging given the tough economic climate affecting both consumers and retailers and will have come as welcome news to businesses.
For retailers wanting to capitalise on continued consumer demand – particularly those who have plans to grow their customer base in 2023 and beyond – there are a number of developments to consider. Barclaycard Payments has therefore compiled the four top trends that retailers should focus on in the next 12 months.
Offer a multi-channel experience
It’s increasingly important that businesses offer shoppers multiple channels to pay for goods and services which are easy to use, reliable and secure, while creating a compelling customer experience. Different people have different preferences.
Part of providing choice is making it easy for customers to cross over from online to in-store seamlessly and both pay and receive their item however best suits them. We see this omnichannel concept in action in Click and Collect, and also with ‘pay at table’ options in restaurants – an eCommerce method of paying in a physical setting.
Consumers now expect the same slick, seamless checkout processes in-store that they receive online.
Consider how people want to pay
Research from Barclaycard Payments in 2022 found that digital wallets now represent the highest single transaction method at 30 per cent of sales, outstripping contactless payments in-store (24 per cent), conventional card payments online (21 per cent) and cash (17 per cent).
From their growth trajectory, digital wallets look set to become ever more widely used by customers and it’s becoming increasingly important for merchants to consider accepting methods such as Apple Pay and other digital wallet services.
As a merchant, it’s important to review how consumers want to pay, and ensure your payments infrastructure can support these preferences.
Don’t under-estimate subscriptions
Subscriptions have had a mixed year. Our analysis of the subscription economy in July showed that, overall, consumers have cut back on the number of products and services they subscribe to. However, subscriptions retain widespread popularity and over a third (34 per cent) of Brits now use them as a way to manage finances at a time of rising costs.
Retailers also remain highly committed to subscription-based revenue streams. Seven in 10 (69 per cent) told us they think the subscription economy will continue to grow and nearly two thirds (64 per cent) will continue to offer sign-up products and services for the foreseeable future. Of those planning to launch a subscription offering, 42 per cent will do so in the next year.
It is clear that consumers still value the ease, convenience and prices they can access through subscription models, and merchants will look to capitalise on this appeal in 2023.
Think sustainably
Data from Barclaycard Payments shows that the ‘Recommerce Economy’ of recycling, renting, reusing, and reselling is on the rise. Seven in ten (71 per cent) businesses now cater to at least one of these trends. Half of Brits (47 per cent) are now using more sustainable shopping methods compared to last year.
In light of the rising cost-of-living, 43 per cent of shoppers are also more mindful of their discretionary spending, with sustainable shopping cited as a way to help manage finances (41 per cent).
Recommerce can also offer commercial returns for businesses. Whether launching rental models to drive new streams of income, offering reselling services, or increasing second-hand or pre-loved product lines, our data shows that offering alternatives to ‘buying new’ can increase a business’ customer base and revenue.
As 2023 gets underway, retailers must remain agile and open to change. Simply put, it’s the retailers who diversify and adapt to the shifts in consumer demands that will be best placed to thrive, especially as the cost-of-living squeeze continues to impact consumer spending.
A multi-channel experience allows customers to interact with a business through various platforms, such as online, in-store, and mobile, providing them with flexibility and convenience in their shopping journey.
A subscription model is a business strategy where customers pay a recurring fee to access a product or service, providing businesses with predictable revenue and customers with convenience and often lower costs.
Sustainable shopping refers to purchasing products that are environmentally friendly, ethically sourced, and support social responsibility, helping consumers make choices that positively impact the planet and society.
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