Expected 2022 trends for the retail sector
By Lee Jones, Managing Director Northern Europe, GSV at Worldline.
Between January 6 and April 12 2021, non-essential retail shops were forced to lock their doors as the UK endured its third national lockdown.
We’ve come a long way since this time last year – although we still face some uncertainty with the omicron variant, cases are down from the beginning of January and we have so far avoided a fourth lockdown – but the economic effects are still undoubtedly being felt for many, including retailers playing catch-up.
Putting last year firmly behind us, we can hopefully look forward to a restriction-free year for retailers and one that allows emerging themes in the fintech industry to take hold for the benefit of both vendors and consumers.
But what developments in the fintech landscape have been seen recently and how might they affect retail in the coming months?
Firstly, the big shift towards contactless payments will continue this year. Not only do 83% of the UK population now use contactless means of paying for their goods, this method also represents 27% of total transactions, up from 7% nearly five years ago.
In many ways retailers will be on the frontline of this growing trend, which will be helped no doubt by the increased contactless limit to £100 implemented in October last year. Therefore, investing in the right payment infrastructure will allow retailers to maximise transaction efficiency and convenience for both the merchant and the customer.
It will also increase payment flexibility as the customer is not bound by cash in their wallet when making a transaction abroad, for example.
Interlinked with contactless transactions is the growing use of digital wallets. These are electronic payment systems that allow an individual to pay for their goods with their smartphone through an app such as Google Pay or Apple Pay, connected to the user’s credit/debit card details.
This is not only a more convenient means of paying for your shopping – as the customer you no longer need to produce a bank card – but also a more secure payment method as card data does not go through the merchant’s system, rather straight to the processing solution.
The rise of Open Banking will also become more influential for the retail sector this year. This trend comprises of a series of reforms to do with customers’ financial information and means UK-regulated banks share information and data, upon the request and permission of the client, to third parties.
Having seen the data, the third party can then promote products and services tailored towards the individual customer. This benefits both the customer, who now has a greater choice and increased awareness of when a certain item is on offer, and the merchant, who can provide the former with a more personalised shopping experience.
All these 2022 trends are largely interlinked , reminiscent of the type of payment solution retailers want to install within their business to promote revenue growth in the long run.
Contactless payment solutions and digital wallets provide multiple advantages for customers and merchants by driving convenience and security and enabling a time efficient shopping experience.
And before this even takes place, Open Banking may well have already influenced where the customer was going to do the shop and what they were going to buy.
Lee Jones, Managing Director Northern Europe, GSV at Worldline
Lee is the Managing Director Northern Europe for Worldline and, alongside his team, has an unparalleled track record of helping organisations deliver a reliable, secure and fuss-free checkout experience.
Having held a variety of leadership roles with market leading technology companies over a 20-year period, Lee is passionate about driving solutions that deliver real value to his customers.
Leading Worldline into new markets, where the introduction of cashless payments is just starting to emerge, while supporting existing customers in their ambition to meet and exceed shopper expectations, is something which highly interests Lee. Lee is proud of the trust customers have placed in Worldline and his team. Being able to help organisations reduce the cost, complexity and burden of PCI while assuring their revenues and enabling them to increase their customer satisfaction scores is at the heart of Worldline’s strategy.
