Omnichannel Payments Usher in Profits
Since the pandemic began in early 2020, new payment technologies have emerged and completely changed the landscape. Today, in addition to to paying by check or cash, consumers have so many choices. Even though it can be difficult for merchants to keep up, the omnichannel approach to payments can usher in more profits while freeing up employees to concentrate on running a smoother business.
Types of Omnichannel Payments
Here is a quick overview of payment options consumers have today:
- Mobile – Transactions made via smartphone or wearables provided another payment channel for consumers. The creation of Google Pay, Samsung Pay, peer-to-peer payments like Venmo, financial digital payments such as Zelle and more, demonstrate mobile pay’s popularity.
- Online – Making purchases via an eCommerce site was already popular but the pandemic sent these digital transactions into overdrive with online retail sales increasing 39% in Q1 2021 alone.
- Voice – This type of payment is the ultimate convenience method. Consumers can let a virtual assistant, like Amazon’s Echo, know that they need more products by calling commands out loud while they sit on the couch.
- In-person – Even though digital payment options have increased; many customers still want to go into the store. But this time, they have multiple ways to pay such as contactless or mobile wallet.
Example of an Omnichannel Approach
The challenge for a merchant is to give customers a unified shopping experience across every sales channel. While that can sound daunting, it provides merchants with an opportunity to set their brand apart and increase customer loyalty.
For example, let’s say a customer is browsing a website and finds an item they want. That’s the first touch. Then they decide they want to see it in person, so they head to the retail store. On the way there, they check their phone to double check the price. That’s the second touch. When they arrive at the store and locate the item, interacting with the staff within the brick-and-mortar is their third touch point. And it may not end there because they might decide they need time to think about the product and end up buying it online. Regardless, the entire customer journey needs to be seamless. If they run into a problem at any point, it’s just too easy for them to go to a competitor instead.
How Merchants Meet Customers’ Demands
It is critical that merchants have technology that captures data accurately and can transfer that to another payment channel. When a merchant can follow a consumer’s journey from the online search to the in-store purchase, the payment experience is seamless and therefore garners customer satisfaction and loyalty. It is also critical for a merchant’s POS system to accept payments the various ways consumers want to pay (contactless or mobile) and to gather information about the customer.
McDonald’s Omnichannel Approach Pays
A great example of how the omnichannel approach benefits the merchant can be seen through McDonald’s latest strategy.
In the first three quarters of fiscal year 2021, McDonald’s has seen over 20% of its sales in its top six markets come through digital channels. In addition, McDonald’s now offers delivery from over 32,000 restaurants in 100 countries, up from 3,000 only a year ago. Driving its digital strategy is a new rewards program that has enrolled over 21 million users in the US alone since its launch a few months ago. In China, another top market for McDonald’s, its loyalty program has enrolled over 100 million users.
Sales aren’t the only benefit McDonald’s is seeing from its digital strategy; online ordering and payment by customers means that a store associate doesn’t need to spend time on these tasks. In the current labor market, this has made McDonald’s more resilient to staffing shortages, since it can focus more of the in-store crew on preparing and serving food, and fewer on taking orders and payments at the counter or drive-thru.
The real proof is in the profits, though, as McDonald’s executives forecast operating margins for this fiscal year in the low 40% range. Worth noting here is that McDonald’s has only achieved margins above 40% twice in the last decade, indicating that its omnichannel capabilities are making a strong contribution.
For More About Omnichannel Payments:
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