News & Views - Savantor

Convenience is paramount (almost)

Tuesday, 16 April 2019

A new report has been issued by Mckinsey which looks at the future of shopping in terms of retail channels and methods of payment. The report was based on research undertaken across consumers in the UK, US, France and Germany. 

One of the key findings of the report is that consumers are increasingly taking a multichannel approach to shop. 60% or more of consumers in Germany, the UK and US apparently utilise equally both online and offline shopping channels and will switch between mobile, online and instore as suits their needs best at the time. Shopping is all about convenience, ease and instant results. Convenience seems to be the driving factor, with the lines between online and offline channels becoming evermore blurred.

The research shows that nevertheless, the physical store remains the key means of shopping, although mobile shopping is a strong contender. Around 50% of consumers in all countries surveyed say the bulk of their shopping activity in the past year took place in a physical store. 

For an increasing number of in-store shoppers, a frictionless mobile self-service checkout and payment experience that speeds up purchasing is becoming important. The use of smartphones and smartwatches to make in-store payments is becoming increasingly prevalent amongst consumers aged 18-39; despite in-store remaining a powerful channel, it is clear that the smartphone is now their second retail channel of choice. Smartphone payment was the top means of payment in this age group across all countries, with smartwatch payment the second most popular option.

This would seem to be supported in the UK by recent figures issued by UK Finance, which show that in January 2019, nearly a third of all card transactions in the UK were made using contactless cards - an increase of 15.5% from a year earlier, with the value of contactless card transactions showing an increase of 18.1%.

Another finding from the Mckinsey report was that consumers are not prepared to compromise on security or privacy in their quest for convenience. This includes Generation Z and Millennials, who as well as being the most internet and technology-savvy, are often typified as being more trusting and less concerned about privacy and security than other generations. However, the research reveals that younger age groups have similarly strong concerns about how their personal or sensitive information is used or protected. 

Evolution of the retail experience, adoption of payment technologies and the development of payment methods and mechanisms and the supporting technologies are all intertwined and co-dependent. Nevertheless it is interesting to watch how the various trends and the associated consumer behaviours are emerging in an attempt to foresee how today’s retail and payment landscape will develop.

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