To Compete With eCommerce, Physical Stores Need to Act More Like Online Retailers

For retailers facing stiff competition from online foes, innovation has become mandatory. Fresher standards for online shopping that emphasize efficiency, convenience and payment choice have emerged, raising consumers’ expectations at in-store checkouts. These features hardly serve as a one-size-fits-all solution, though. PYMNTS’ research reveals that retailers in the grocery and convenience, non-grocery and pharmacy segments are each making different investments in payment innovations, likely because of changes in how consumers now shop for specific goods and services. When consumers can find the same products just as easily online as in-store, user experience becomes paramount to winning shoppers’ loyalty.

“The Instant Payments Transformation Guide: Grocery, Pharmacy And Convenience Retailers,” a PYMNTS and ACI Worldwide collaboration, examines how these businesses can leverage payments innovation to optimize in-store customer experiences and build shopper loyalty.

Findings include:

• Grocery retailers are prioritizing options that may become more important in times of economic uncertainty, such as payment choice, fraud detection and customer data tracking.

Payment choice is essential, as consumers may choose to utilize debit, credit, buy now, pay later (BNPL) or a mix based on their budget priorities. It may be no surprise that 55% of grocery retailers are innovating available payment methods. At a time when consumers are prioritizing saving money, retailers would also be wise to focus on user experience features that impact shoppers’ bottom lines. Fraud detection has become vital for grocery retailers, with 42% of these retailers innovating to detect fraud.

• Pharmacy and convenience retailers focus on engagement.

As an influx of independent, mobile-only online pharmacies and convenience services drive up competition, the savviest convenience stores and pharmacies are driving engagement through features that reward consumers for shopping and remove friction from transactions. Increased competition may well have led to accelerated payments innovation, as convenience stores and pharmacies lead in the planned adoption of real-time payments. This innovation makes checkout and refunds faster for consumers and more closely mimics the online experience; it also increases liquidity for retailers, a benefit for any type of merchant.

• Non-grocery retailers are leveraging customer data and optimizing payments.

Like convenience and pharmacy retailers, non-grocery retailers prioritize loyalty programs, refunds and consumer data analytics — but these retailers are doing so at higher rates, suggesting that customer experience, payment choice and convenience have heightened importance in the segment. Non-grocery retailers are the most likely to invest in developing loyalty programs, refunds and data analytics in-house. Customer shopping and payments data provides actionable insights that can help these retailers develop new engagement strategies and streamline payment processes in a manner aligned with consumer preferences.

To learn more about how retailers are innovating payments to optimize in-store customer experiences and build shopper loyalty, download the report.