Even before the pandemic heightened local demand, contactless card use had been growing in the United Kingdom as far back as 2007 when the “OnePulse” card was launched, limiting payments to £10 (about $10).
But since October 2021, when the spending limit for contactless cards was raised to £100, an estimated 135 million of such cards have been in circulation, leading to a surge in in-store shopping and spending.
This long-standing practice of using contactless cards likely explains why using smartphones to shop has never fully caught on with British shoppers as it has with consumers in other countries.
In fact, the U.K. edition of PYMNTS’ 2022 Global Digital Shopping Playbook series shows that British consumers are the “least mobile-centric” and “16% less likely than the average consumer across the six countries studied to use their smartphones at any time for any reason during their shopping journeys, whether they are shopping online, in-store or a mix of both.”
Published in collaboration with Cybersource, the report further revealed that a meager 24% of shoppers in Britain use their smartphones to enhance their in-store shopping experiences, either by comparing prices in real-time, checking inventory statuses or searching for product reviews.
Learn more: 3 in 4 Brits Don’t Use Smartphones to Check Prices, Inventory In-Store
In a discussion with PYMNTS, Denise Burkett-Stus, head of Cybersource Europe, and Harshna Cayley, head of online payments at Barclaycard Payments, said that while mobile-assisted buying increased during the pandemic, this key behavioral difference isn’t surprising in a “card-centric nation” like the U.K., where consumers find it easier to use their credit cards than their phones.
However, that is starting to change with the younger generation, Burkett-Stus said, pointing to a growing trend that is captured in the study findings. In fact, Gen Z consumers surveyed said that they are three times more likely than the average U.K. consumer to pay via a mobile wallet like as Apple Pay or Click to Pay, while millennial consumers are twice as likely.
Read more: Augmented Reality Encourages UK Shoppers to See In-Store Through Their Phones
Barclaycard’s Cayley tied this trend to the impact social commerce and influencers are increasingly having on the shopping experiences of these young consumers, which transcends the sole act of making a payment.
“[Their experience] does not involve a physical card at all,” Cayley explained. “It’s either a virtual card, a digital wallet or an integrated social commerce experience which has payments embedded in it. They don’t even need to think about payments.”
Increasing Awareness Is Key
As much as consumer choice plays a critical role in the low usage of smartphones for in-store purchases, merchants’ role in eliminating the high in-store friction experienced by U.K. shoppers cannot be downplayed.
See also: U.K. Consumers Encounter 11% More Shopping Friction Than the Average Consumer
According to the PYMNTS report, while nearly two thirds of U.K. retailers (59%) say they allow consumers to use mobile devices to locate a product in a physical store, less than a third (27%) of local shoppers said they knew about these mobile-centric, in-store navigation apps.
When it comes to delivery, British eCommerce shoppers had the strongest preference for at-home delivery among all the shoppers surveyed, with nearly 80% of them having their purchases sent to their homes in 2021.
Similarly, merchants appeared to be making very little effort to raise awareness about the options they provided, as only 39% of consumers said they knew they could pick up an order at an in-store kiosk or from an employee (44%).
To remedy the situation, Cybersource’s Burkett-Stus said it will take strong delivery logistics back-end management that integrates stock inventory into commerce platforms to give consumers the quick, convenient and unified shopping experience they are seeking today.
British retailers can also take a cue from Amazon and how it has mastered the art of last-mile delivery, Burkett-Stus continued: “Amazon will tell me exactly when I can have [a product] delivered and there’s no friction in my payment experience. My card details are stored there, and it just goes through. It’s perfect.”
And with more and more shoppers looking for convenience, merchants can drive loyalty and stickiness by stepping up their game, Cayley added.
“You will always go back to that platform or to that particular brand,” she continued. “That’s how that flywheel effect happens.”
Related: Beating Inflation With BNPL: How Merchants And Consumers Are Navigating The Cost-Of-Living Crisis
In the end, retailers will also need to ensure that the commerce experience and the payments experience feels like one, Cayley further noted, while providing broad and flexible payment options like buy now, pay later (BNPL), which are particularly gaining traction among consumers severely hit by the cost-of-living crisis in the U.K.
“[BNPL] has got huge potential, we are starting to see some big growth in that area. [And] with the current economic crisis [and] the potential of a recession, [it’s] definitely going to be at the front of people’s mind,” Burkett-Stus said.
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