It starts with having plans for how you will convert existing customers and attract new ones.
Six months ago, the world was a completely different place. Unemployment in the United States was at a 50-year low. Consumer sentiment was high, people were spending a lot of money. By most accounts, the economy was strong.
And then, in March, and several months thereafter, the economy slowed to a crawl as we sheltered in place and stayed home to help slow the spread of a highly contagious virus.
But something interesting has started to happen in the retail world. In May, retail sales surged 18 percent, up from what had been historically low months. And e-commerce has withstood the coronavirus; in many ways, it has thrived in spite of it. U.S. e-commerce sales were up nearly 50 percent in April, right during the middle of widespread shutdowns.
While retail franchises have no doubt taken a hit during the pandemic, there are signs of real hope and cautious optimism. As consumers start to return to a sense of normalcy — at least to what we now know as the new normal — retail franchises stand to benefit if they meet customers where they are. Here are three ways to do that:
Expand e-commerce and omnichannel offerings
In order to thrive today, franchises must continue to build upon their e-commerce platforms and think holistically about the shopping experience in this new era. By connecting the dots between shopping online and going into a store, retailers can find hybrid models, such as “curbside” pickup, that are both convenient and safe. The experiential part of retail is not going away, but it is surely changing. You need to meet your customer wherever they are — on their phone, tablet, computer, in your store, or on the curb.
What the data is telling us is that consumers are still buying goods, and spending has picked up considerably since the start of the pandemic. However, the big change is that people want more options for how they buy.
In the short-term, a retail solution dependent on customers physically entering a building and shopping is going to face serious challenges. Businesses need to be able to adapt during this crisis instead of hoping for a return to “normal.”
This year, Millennials and Baby Boomers, whether for convenience, safety or both, are shopping more online. And if they are not shopping online, they are shopping at independent, local retailers, but opting for “curbside” pickup instead.
Offer flexible payment options
The varying ways people can pay continues to increase. A few years ago, we were only limited to cash or card. Now, we are able to use fast and efficient forms of payment like Apple Pay, Samsung Pay, Google Pay, and Cash App. A multitude of payment options may seem like a hassle for business owners who are used to using one primary payment option, but it is actually a great opportunity for attracting and retaining new customers.
In the current economic climate, it is wise to be as flexible as possible when accepting payments. No contact payment options, such as Apple Pay, may continue to increase in popularity. Rather than handing over a credit card or entering a PIN number, consumers may prefer to have their phone scanned, or pay online first from their device prior to picking up their goods at the store. Ideally, you never want to say “no, we don’t accept that payment method.”
Explore buy now pay later options
A fast-growing payment model is the “Buy Now, Pay Later” (BNPL) option. It’s been popping up in e-commerce stores over the past few years with major companies like Afterpay or Affirm offering options for users to purchase and then pay over time. Some come with interest, others provide varying types of repayment plans. ViaBill works with thousands of retailers to offer consumers the option to pay over time with no interest. We’re also launching a subscription model that allows consumers more credit to pay over time. Retailers love it because they don’t take on any of the risk—they simply pay a small transaction fee for each purchase, much like a credit card.
Consumers appreciate the BNPL model as well. Rather than being bogged down with high-interest credit card debt, they have the option of paying for their purchases over several months without paying any interest. In this era where consumers are trying to stick to their budgets during an unpredictable economy and avoid unnecessary debt, BNPL solutions offer customers the ability to buy what they need without paying for all of it upfront or paying interest.
Retailers using BNPL often see a substantial increase in average order volume (i.e., people spend more money per transaction) and a decrease in abandoned shopping carts (less people, figuratively, walking away online).
BNPL models aren’t just for e-commerce transactions either. We’ve started to work with a national mobile device repair franchise that uses ViaBill inside their stores. If customers have the option of using BNPL online, then they will want it inside the physical store too. Using BNPL in stores also results in increases in average order volume, and fewer abandoned shopping carts. This is an example of blending the hybrid shopping approach with a new way to pay.
The key to success in this new era of commerce is to be flexible. Put yourselves in the shoes of consumers and determine all the ways they would want to shop and pay. Giving them options is a great way to increase sales and volume over time.