How the Connected Consumer is Driving the Future of Retail Payments

An estimated 20.4 billion devices will be connected by 2020, roughly four devices for every person on earth. The trend in owning connected devices continues to grow, as does the wealth of information that's shared across devices. Consumers are becoming more open to the idea of what has been dubbed the shared economy, where their data can be used to not only enhance the shopping experience but bridge the gap between online and in-store shopping. The payment industry needs to develop innovative omnichannel payment solutions that keep sensitive payment information safe to support a seamless shopping experience.

What is the Connected Consumer?

The connected lifestyle of today’s consumer is driving the future of retail payments. Seventy-two percent of consumers under the age of 36 own a connected home device beyond smartphones or tablets, such as a voice-controlled device. Of those that own a voice-controlled device, 50 percent have used it to make a purchase in the past year. While they may browse online or on a mobile device, consumers still shop in-store to purchase goods or services, and many will use their home device to research before making a purchase. The more digital savvy consumer is open to sharing their information across channels, expecting seamless access to tools that enhance their shopping experience.

Retailers Need to Build a Seamless Shopping Experience

To keep up with the connected consumer, retailers need to develop experiences that consumers want. Businesses should look to incorporate social media into their e-commerce strategy, as consumers are increasingly more likely to make purchases via channels like Facebook or Instagram. Through the Internet of Things, retailers can use consumer data to track spending habits, offering a more personalized shopping experience. Data can be used across channels, from online and in-app to in-store, providing a seamless approach to shopping that's driven by the consumer experience.

Innovative, Flexible and Collaborative Payment Solutions

The payment industry needs to provide flexible solutions that support the growing demand in omnichannel shopping. The less friction at checkout, the more inclined the consumer will be to continue to shop with a retailer. While consumers are open to information sharing, they want to shop knowing that their information is kept safe. Tools like tokenization can be used to encrypt confidential payment data such as credit card numbers and addresses. Trust is paramount when it comes to payments, and payment providers that can improve the consumer experience without compromising trust will have the advantage.

There's no doubt that the lifestyle of the connected consumer is driving the transformation of the shopping experience. The mass amount of connected devices and the seemingly endless supply of data are pushing retailers to interact with consumers at every touchpoint of their shopping journey, offering a seamless experience without compromising trust. As online, in-app and in-store shopping merge, the need for an omnichannel payment solution that can keep up has never been stronger. Allowing for consumers to make seamless purchases across channels that align with the unique shopping experience will keep them coming back again and again.

Chris Koide is senior advisor and vice president, financial institutions for Bambora North America.