How unified commerce provides retailers with more insights

February 08, 2021 09:23
Photo: Adyen

It’s no secret that retail in Hong Kong has been struggling this past year. But some retailers have found that by using technology to offer a better shopping experience they can survive, and even thrive.

According to data released by the Hong Kong Census and Statistics Department, retail sales dropped by 25.3% between January and November 2020, compared to the same period in the year before. This marks the worst performance since records began in 2004. Not surprisingly, shopping behaviour is changing in response to the pandemic.

Shoppers moved away from the retailers they used to rely on – convenience and experience became the key drivers of spending decisions. With health and safety higher on the agenda, Hong Kongers shifted online, or to those that could provide a slick and safe in-store experience. For example, in our Adyen Agility Report survey, we found 59% of Hong Kongers are concerned about the hygiene of payment terminals and would prefer to use contactless payments. Within this changed landscape, retailers who were agile enough to react rapidly to consumers’ shifting priorities pulled ahead.

The increasingly blurred lines between the online and offline shopping experience presents new opportunities and challenges. Previously, retailers would set up online and offline channels as separate departments and launched as many channels as possible to cast the widest net. This made it difficult, if not impossible, for retailers to really get to know their customers because they weren’t able to track customer behaviour across channels. Data compiled by Adyen shows that 79% of shoppers in Hong Kong want retailers to offer flexible, cross-channel experiences. This means retailers need to unify commerce around the customer to provide a seamless experience across in-store, online and mobile channels.

Unified commerce means recognizing the same shopper across your different channels and using that recognition to offer them a tailored shopping experience. This approach helped stabilize sales during the pandemic by offsetting lost in-store transactions with an increase in e-commerce. Globally, shoppers who only ever purchased from a retailer in-store prior to the pandemic spent, on average, 40% more when they shifted online to make purchases during the pandemic. The more channels shoppers use, the higher their long-term value to the retailer – if they take a “unified commerce” approach.

The ‘Welcome back’ in-store experience

Hong Kongers are well above the global average in their love for brick-and-mortar shopping, and our data shows many are looking forward to getting back to in-store shopping after the pandemic passes (66% compared to the global average of 58%). However, today’s in-store shoppers expect retailers to be attuned to their needs, from how they pay to what they use to pay. It’s no longer enough to upgrade a POS terminal and call it a day. The next stage in the retail battle in what has been historically known as Asia’s shopping mecca will be about who can get customers coming back for more. We’re seeing shopper expectations change even when they shop in-store.

Traditional retail has had to change as many shoppers prefer contactless payments because cash is seen as unsanitary. This is especially true in Hong Kong as 73% want to shop with retailers that help reduce person-to-person contact compared to 51% globally. Hong Kongers are also more likely, 38% compared to 28% globally, to leave a shop and abandon a basket if they can’t pay how they want, and 77% customers won’t return if they’ve had a bad experience either in-store or online.

Now that they’ve seen what’s possible, 69% of Hong Kongers now have higher expectations of retailers as they proved they could adapt quickly to offer new services.

Whether in-store or online, retailers need to engage their customers regularly, know who they are when they shop, and make sure they’re making the most out of all customer touchpoints. And they need to do all of this in a landscape that’s been drastically changed by the pandemic. A unified commerce approach allows for an integrated “single source of truth” that tracks customer behaviour and shopping patterns across all sales channels. This can provide crucial insights to help retailers create tailored recommendations and loyalty programs that turn shoppers into regular customers.

We have found unified commerce to be a critical success driver. With unified commerce, payments from all your channels feed into the same system. This allows for greater flexibility for your customers and better insights for you. It also keeps you agile since you can add new channels and adjust to new customer preferences quickly because everything’s connected. As more Hong Kong retailers include e-commerce into the mix, the shopper experience is more important than ever. Retailers need to make a conscious choice to move forward and integrate solutions that leaves room for flexibility and sustainable growth.

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President, Adyen Asia-Pacific