Shopping and payments patterns forged in the crucible of the pandemic are fast becoming “the next normal” we’ve been speculating about since 2020. As the dust settles, we’re seeing more clearly how digital investments and consumer preference are profoundly reshaping commerce worldwide.
In the 2022 Global Shopping Index, a PYMNTS and Cybersource collaboration, we surveyed over 13,000 consumers and 3,100 merchants in Australia, Brazil, Mexico, the United Arab Emirates, the United Kingdom and the United States, analyzing breakout trends and gauging customer satisfaction based on an index that measures features consumers find the most valuable against those that merchants offer.
Discussing how the findings can help merchants worldwide match their tech investments more closely with consumer demand, Carleigh Jaques, senior vice president and global head of acceptance solutions at Visa, and PYMNTS’ CEO Karen Webster said that it’s clear shopping is now a continuum that can start and end any number of ways — and that consumers like it that way.
Noting that 2020 and 2021 saw merchants invest heavily on tech, they said those strategies are bearing fruit post-pandemic as consumers enjoy their new shopping freedoms.
In 2020, the average index score was 101.8, Webster said. In 2021, it rose to 103. At face value, that might not seem like a significant increase, but it reflects a huge commitment from merchants to deliver a strong digital customer experience regardless of the channel.
“Digital and in-person are no longer separate channels,” Webster said.
Jaques agreed, adding, “When I think about that mobile native, the person who was starting their shopping journey in mobile and ending in mobile, it already started from a high base off of 2020, but it jumped 26 points in 2021. That’s an amazing number. The satisfaction of those folks who are using digital in complement to their physical experience was pretty striking. It was almost 50% more satisfaction in that kind of digital assisted experience.”
That’s the effect of people using their mobile phones as shopping remote controls, a trend that’s increasing inside of physical stores and further erasing the line with eCommerce.
Webster added, “34% of brick-and-mortar shoppers now use their mobile devices in the store to sort of replicate the experience they have when shopping online,” from reading product reviews to accessing offers and promotions.
These forces are also having the effect of making standalone physical stores double as eCommerce fulfillment centers as more and more shopping starts on mobile. According to the index, about 20% of eCommerce shoppers are buying online, then opting for curbside or in-store pickup.
“In that case,” Jaques said, “the store really has become the fulfillment choice” rather than a shopping destination in a pre-pandemic sense.
Get the study: 2022 Global Digital Shopping Index
Finding the Choice Balance
How merchants put the findings of the massive study into action, fine-tuning aspects of the shopping journeys, is at the core of the 2022 Global Digital Shopping Index utility.
“There’s a real difference in how consumers are establishing preference with merchants who make digital part of that physical experience, and of course who they choose to spend their money with,” Webster said.
That discussed payments choice — a line of demarcation in the pandemic-era connected economy — with Jaques noting that it is most valued by consumers and shapes their behavior.
“The fact that almost half of the customers said that if their preferred payment weren’t accepted, then they were less likely to shop with that merchant in the future — that’s a really powerful statement,” she said.
Solving a puzzle in which three-quarters of consumers reported shopping with merchants that offer payments choice while just 45% of merchants said they offer such choice, Webster said, “That suggests that consumers are 63% more likely to shop with merchants that accept their preferred payment methods. It’s not just what consumers say they will do; it’s what consumers are actually doing today.”
It’s much the same with app features, as the study detected “too much” versus “just right.”
“In the UAE, the merchants don’t offer consumers as many features, but what they offer are the features that drive satisfaction,” Webster said. “By contrast, in Mexico, consumers are given lots of features, but the friction associated with taking advantage of those features is such that the index satisfaction score in Mexico with merchants is much lower.”
Playing to the Differences
Proliferating payments choice and a melding of all channels into “just shopping” is part of the migration to the “new normal” phase we’ve entered, where stakes will get higher. This means merchants will need to be more strategic in adding (or not adding) new features.
Using voice-enabled commerce as one example, Jaques pointed out that “merchants have gone a little bit headlong into voice enabled purchasing with 65% of merchants offering the capability, but only 39% of shoppers really using it.”
Saying that only time will tell with certain tech investments, Webster added, “That is one area that I was surprised by as well. Perhaps it suffers a little bit from [whether] consumers really zeroed in on a use case for voice now that adds value to their shopping experience.”
Buy now, pay later (BNPL) also has issues attending its booming popularity. Jaques noted that “buy now pay later options really have popped,” during the pandemic, which is indisputable.
Use patterns aren’t uniform market to market, however.
“It’s another one of these interesting findings where so many of the consumers in our study across markets have tried buy now pay later, not quite 50%, but pretty but close. It’s one of these areas where consumers are using it and merchants are offering it, [but] there’s a bit of a disconnect,” Webster said, offering high use in Brazil and lower use in the U.S. as a comparison.
Along with that, Jaques said, “when you offer payment choice … you need to make sure that you’re honoring the good transaction. It has the power to attract a consumer, but also a false decline has the [ability] to taint your relationship with that consumer. Making sure you’re delivering that full experience is incredibly important from the merchant vantage point.”
Get the study: 2022 Global Digital Shopping Index
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