Consumers Are Looking for Frictionless Payment Experiences this Valentine’s Day
Valentine’s Day is often a theatrical display of how far one’s affection and wallet can be stretched. In recent years, there’s been a growing consumer focus on gifting experiences in lieu of splurging on physical commodities.In fact, last year Americans spent an estimated $23.9 billion on Valentine’s Day, according to the National Retail Federation (NRF), with the trend of gifting experiences, such as hotel stays, dining out, and romantic excursions outpacing traditional items.
The report indicates that consumer spending on conventional retail purchases, like jewelry for example, accounted for 22% of the purchases made in the lead-up to Valentine’s Day, while 31% was spent on celebrating with an evening out. However, there’s nothing worse than a clumsy payment experience at the end of the night or delays during the last-minute rush to get the right gift for loved ones. To maximize sales and successfully manage consumer expectations during seasonal retail events, small-to-medium-sized businesses (SMBs) that offer an experiential service will need to focus on creating a frictionless customer experience at the checkout to stand out in the competitive retail landscape.
Throughout this article, we’ll explore how consumer spending habits are shifting, and why it's never been more important for businesses to focus on enhancing the checkout experience, particularly as the demand for broader convenience grows and new payment methods become increasingly popular.
Establishing differentiation in competitive marketsthrough the right payments mix
Accelerated by the pandemic, consumers across the globe have changed the ways they shop and pay. Looking at Valentine’s Day, which is the fifth largest spending event in the U.S. after the winter holidays and Mother's Day, consumers are buying into experiences and prioritizing businesses that will help them celebrate the holiday in a meaningful way. Merchants that understand these shifts in purchasing behavior are reaping the benefits and using the lessons they’ve learned to increase sales, engagement, and loyalty.
Leveraging a mix of payment solutions enables businesses, big and small, to operate more efficiently while meeting consumers’ payment needs. Particularly for restaurants and hoteliers looking to keep up with the pace of demand, eliminating pain points at the checkout is key to creating a winning strategy.
- Leveling up point-of-sale (POS) systems to accept multiple ways to pay. When it comes to meeting the demands of today’s consumers, offering flexibility at the checkout is imperative.Having a reliable payment system that quickly processes a wide range of payment methods can free up time and enable staff members and management to focus on personalizing the customer experience.
- Implementing self-service solutions such asQR codes and the option for customers to pay ahead. With QR codes on the table, customers can access a restaurant’s menu, order, and pay for food and drinks directly through their mobile device when they want. Some payment solutions even allow customers to start an online tab and pay the bill at the end. Diners can initiate and complete their transactions without having to wait for a server, ultimately speeding up the checkout process without overwhelming staff members.
- Embracing contactless technology wherever possible. Many customers and businesses find solutions such as 'tapping to pay' to be faster. Implementing simple and reliable payment processing solutions helps to speed up the transaction process and eliminates friction at the checkout, which is particularly important during special occasions when the aim is to deliver a memorable customer experience.
- Leveraging the data. Best-in-class payment systems also offer merchants detailed and custom reporting, providing insightful and actionable intelligence that can be leveraged to strengthen loyalty programs and marketing campaigns.
Preparing for seasonal surges in sales
Making it simple and painless for customers to shop and transact with your business is the ultimate goal. This starts with understanding the unique needs of your customer base and meeting them where they are.
In a 2022 study commissioned by Paysafe, which surveyed over 1,100 online merchants in 12 countries, more than three-quarters (76%) of the merchants surveyed run online businesses that depend on the revenue they receive from seasonal sales, and for these companies, being able to handle surges in demand is vital. Failure to effectively mitigate these challenges may result in lost revenue but could also wreak havoc on the business’ reputation and impact future sales. Working with a reliable payments partner during these peak times is therefore essential for online retailers.
Understanding how the landscape is changing, the technology that’s available, and which solutions are right for the business can help more merchants achieve the growth they desire. This means working with the right payments partner to create a fully optimized and simplified checkout where customers will want to return again and again.