The worlds of fintech and retail have always been connected. As technology advances, they are becoming even closer, both grappling with changes in consumer behaviors.
A new ‘always-on’ customer combined with innovations is driving this new proximity. The growth of multi-screening habits, where online users consume content and information via a variety of sources, often through different devices, is becoming prevalent.
This change comes from consumer demand as they look for greater efficiencies and quicker services in a fast-paced digital world. With more online channels available, more opportunities are available in this ecosystem for both consumers and businesses to take
The Changing Customer Journey
There are some commonalities that are likely to become bigger overlaps and eventually hygiene factors in fintech and retail-tech.
Before, the customer journey would have likely been a linear one. They would see an ad, click, consider, then make a decision on whether to invest in it or not. Now, companies are spending a great deal of time and energy in reimagining the customer journey
as circular. This involves creating different contact points with a customer, listening to their requirements and adding value where possible to their experience around a brand. The ultimate aim is for them to not only invest in a product or service but instill
loyalty in an era of rapid commoditization, to ensure they keep coming back for more.
Consumer Behaviours and Expectations
Customer expectations and purposes surrounding brands are two important considerations when they decide on which they want to be associated with.
While this trend is already apparent in retail, it is less common within the financial services sector. However, all brands are likely to have to keep this in mind in the future as consumers acquire greater power. This illustrates how a closer relationship
between retail and fintech could help market players from across the board gain a deeper understanding of consumer desires, instilling greater loyalty and creating a more holistic ecosystem.
What Retail needs to Learn and Adopt from Fintech
In recent years, there has been a boom of successful fintechs that have managed to carve a niche or compete with incumbent players.
According to a recent study from PwC, three-quarters of banking respondents said they were concerned that part of their business was at risk due to the rise of fintech players. The success of fintech has come through the amount of time these new players
spend listening to their consumers, understanding their needs and wants.
Retailers and especially luxury businesses traditionally take a very different approach. They instead operate as ‘demand generators’ where they tell consumers what they should want via targeted marketing. In some instances, this strategy continues to work
especially for the bigger, more established brands such as Apple or Cartier.
However, smaller or newer firms are less able to successfully create this demand and competition is fierce, particularly during the economic uncertainty created by the Covid-19 pandemic. Barriers to market entry have been greatly reduced thanks to advances
in technology, and new direct-to-customer and micro-retailing business models are frequently appearing. As a rule of thumb, all retailers must strive to become better at engaging with their customers and listening to what services they require. If they don’t,
then they face being left behind.
Fintech firms often provide a better customer experience by:
Through listening, and researching user and market needs, businesses can home in on what services and products they sell and what makes them unique.
Increased agility and embracing of innovation can help firms stand out from competitors by offering more targeted solutions.
Following these rules should allow retailers to reduce risk associated with a solution and to tread more confidently when launching to market.
Understanding the power of data
Today, data is a very powerful tool and one which can unlock new revenues for businesses. While some retailers know this already and leverage this information to stay ahead of competitors, many are not using this to their advantage.
Consolidating data from different channels in a unified commerce system can be an effective way of managing different stores and online income streams. Utilising this data effectively can also help you adapt your services in line with customer demand and
help you discern whether you need to reinvent your business model or move into new markets to stay competitive. If you can collect and analyse this data quickly, it can provide your business a much better chance of offering compelling products and generating
New payment options
Fintech has created a wealth of new payment options to enhance online security and beat fraud. These methods could create new and improved customer journeys for retailers. Some of this technology includes:
Invisible and autonomous stores offering reduced waiting times
Cashless payment solutions
Smartphones as POS
Enhanced payments security
With innovative technological advancements come new consumer trends and businesses need to stay aware of these if they are going to succeed in an ever-evolving marketplace. By taking insight from each sector and embracing innovation rather than tired old
business models, then companies give themselves the best possible chance of success.