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The future of payments: merging loyalty schemes and mobile point of sale

One result of the pandemic has been the acceleration of the adoption of contactless forms of payment. First triggered by the fact that the virus could spread through the physical exchange of objects, the change was then consolidated by the need to implement social distancing within stores. The result is that consumers across all demographics have demonstrated a desire to use mobile wallets, contactless cards and other digital forms of payments, in place of chip and pin debit cards and hard cash.

It is an exciting time in payments – we have seen changes take place in months that would usually take years to filter through into everyday behaviour.

But that does not mean that industries like retail and hospitality are out of the woods – every day seems to bring news of shops and chains shutting, workers being made redundant and a growing preference for online ordering. For those with an established bricks and mortar presence, the threat of local lockdowns and second waves could send many to the wall.

Yet there may be an opportunity to harness new behaviours and protect the retail industry. With contactless, and in particular the use of mobiles as a payment device, proving ever more popular, retailers should be looking at how they can build deeper relationships with their customers through the merging of loyalty schemes and mobile point of sale (mPoS).

The end of waiting for a till

It makes sense – with social distancing demanding a rethink of traditional floor layouts, the days of waiting for a till to become free could be at an end. Why couldn’t customers, particularly regular ones, use mobile PoS, or self-checkout? Supermarkets have been using self-scan in some geographies for more than 20 years, and with smartphones expected to reach a penetration rate of 77% in 2020, consumers are walking round with supercomputers in their hands. These devices are powered by apps, so if downloading one more meant a faster checkout experience, it is unlikely that many would decline to use it.

Through this ability to self-checkout, retailers are already changing the shopping experience. To take it one step further, they should look at how they can build and integrate loyalty schemes that offer more personalised offers, discounts, and vouchers. Using shopper behaviour, they could tailor outreach – for instance, if someone buys a certain item every couple of weeks, after a number of purchases they could receive a reminder with an exclusive, one-off discount for that product.

Digitising the concept of the regular

This is not limited to retailers either. Hospitality providers such as pubs and restaurants have, since reopening, had to rework their offering to focus more on at-table ordering. Some chains already had their own apps for ordering and payment, some have adopted one in the last few months, but often the experience can still be clunky and restrictive for the staff or customers that are using them. Businesses therefore run the risk of losing out on additional revenue, or even losing customers if the tech is not fit for purpose.

Yet the increasing availability of PoS software means that the barriers to entry are falling, just as they once did for card payments. Again, with this shift comes an opportunity to bring in loyalty schemes, and even the chance to upsell via PoS technologies.

This is what I am calling the digitisation of the traditional regular, whereby frequent customers get exclusive offers and opportunities at the landlord’s (or more likely area manager’s) discretion. It could be a free coffee on the tenth purchase, free soft drinks with certain dishes, a meal deal – the ability to personalise offers with exclusivity or even sell additional products or services to compliment the initial purchase could not only help to increase loyalty, but could also boost revenue.

In the palm of your customers’ hands – and the responsibility it brings

The key is that loyalty schemes can be delivered direct-to-mobile, which is already the centre of most people’s lives and likely to take on an even larger role in a post-COVID-19 and increasingly digitised society. With everything from doctors to work communications moving online, the ability to access services on the go is what makes phones so fundamental. Suddenly, retailers and hospitality providers have a place in consumers’ hands.

A note of caution: with this position comes a responsibility to protect consumer data and use it carefully. Beside General Data Protection Regulation (GDPR) fines and punishments for mishandling data, businesses need to ensure they use the information they have to enhance the customer experience, not spam them with offers.

It is about using the data you have responsibly and integrating it into systems appropriately. You might have a great time-limited offer on a pair of shoes, but if your customer only shops at the beginning of the month, in line with payday, is pushing the discount out to them three weeks later going to be appreciated?

The future of loyalty and using mobile PoS effectively

We are still all in the midst of huge uncertainty. With the looming threat of new lockdowns on the horizon, businesses need to be looking at how consumer behaviour has changed, marry that with how restrictions are altering their physical footprints, and come up with ways to improve the customer experience within that context. Integrating loyalty schemes with mobile PoS could go a long way to keep regular customers loyal and convince first-time buyers to return, delivering valuable repeat business in uncertain times.


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