Based on 10 years’ experience in luxury retail including brands such as Burberry Adyen’s SVP of Sales Colin Neil explains how payments technology can simplify operations, improve shopper experiences, and drive brand innovation.
As luxury retailers look to expand globally to take advantage of the new wealth developing in areas such as China and India, the complexity of their businesses increases. This is because international expansion typically means connecting already complicated back-end systems with local solutions. This is fine when a speed of market-entry is a priority, but it also leaves you with a challenge: if these back-end systems don’t talk to each other, how can you deliver the unified experiences expected by today’s customers?
These days, consumers choose how and when they interact with a brand. Customer journeys are no longer linear; they might browse the items in a store and then make the purchase on their mobile device, and they expect a consistent brand experience every step of the way. The power of social media underpins the whole buying experience, especially when it has not been a good one.
One thing is very clear: digital transformation is an absolute must for luxury retailers that want to thrive in today’s competitive environment. This isn’t news; many luxury retailers know they’re facing a costly overhaul of legacy systems. The question is: where do they invest their resources to get the biggest return?
Today, payments technology has the potential to meet the three most common needs luxury brands face:
• Simplify the business model
• Unify the customer experience
• Drive brand innovation
Simplifying business models
For luxury brands, it’s critical that operating models remain simple and agile, regardless of whether they have one store in the UK or multiple stores spread across the globe. This lets retailers respond to changing demands quickly and ensures a culture of innovation is embedded across the organisation.
Historically, luxury brands had to work with multiple payment providers to accept preferred payment methods, operate in new countries, and ensure 24/7 support globally. This adds more complexity to operating models because retailers are forced to wrestle with multiple contracts, integrations, partners, settlement processes, and technical support contacts.
Today, payments technology can simplify this process by managing all transactions in one place. This provides a single view of sales across every market and sales channel. It’s even possible to integrate new payment methods without having to incorporate each one method separately. The result is a single reconciliation/settlement process and standardised reporting, which gives real-time performance insights.
Customers today engage with luxury brands when and how they want. So it’s critical that all touch-points are consistent.
Fragmented back-end systems make it difficult to deliver a high-quality experience across markets and channels. A retailer’s view of customers is largely restricted to those who log in to make a purchase.
Payments make it possible to deliver a unified customer experience. Organisations can:
• Securely save card details and use these to support one-click payments or reward customers for their continued brand loyalty
• Use the shopper’s location, device or basket value to display relevant payment methods early in the checkout flow, helping to boost successful purchases and improve the customer experience
• Let their in-store shoppers skip the queue with mobile point of sale (mPOS) terminals that can take a payment from anywhere on the shop floor
And of course, if all payment data is centralised, businesses get a 360-degree view of their shoppers across all touch-points.
Innovation is a core topic for luxury retail today. Reinventing brands through product innovation, digitising stores, and social platforms all help to drive growth and help to reinvigorate businesses.
Importantly, innovation requires collaboration with like-minded technology partners. Payment service providers (PSP’s) are not traditionally regarded as drivers of innovation; they’re more commonly seen as a commodity. But successful luxury brands are learning that payments have a place on the strategic agenda and can be critical to their success.
When done right, payments can give a business an edge over its competitors:
• International expansion can be accelerated by supporting popular local payment methods,
• international shoppers can benefit from Direct Currency Conversion with seamless VAT refunds,
• new innovations can help boost customer experiences,
• optimising credit card processing can increase revenue.
Integrating with new technology partners is an expensive and time-consuming process that requires effort and buy-in from across different parts of an organisation. So, it’s important for retailers take the time to ensure they’re investing in the right areas. Consulting potential payments providers can help focus any target areas or regions and can also help take a headache out of modernising back-office systems. This, in turn, ensures that luxury retailers are ready to take on the demands of the modern shopper.
Author: Colin Neil senior vice president of sales at Adyen
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