In part three of NZ Retail’s four-part deep dive into the big retail trends of 2020, we examine how speed has become central to everything.
From same-day shipping to payments flexibility, shoppers want what they want, and they want it now. To keep up, businesses will need to invest in back-end processes and last-mile innovation, and streamline their communications. Emerging technology like AI may take the effort out of this via automation.
“While retailers can’t be everything to everyone, offering flexible payments creates shorter lines in stores and a more personalised checkout experience.” – Vend, Vend’s Retail Trends and Predictions 2020.
Social media and the internet more broadly channel far more information to each consumer than they can reasonably process in the time available. People are working longer hours and following faster trend cycles – they’re busy, anxious, and they don’t have time to muck around.
Not only are consumers often too rushed to shop in the traditional sense, but their attention span has also contracted sharply. Perhaps due to greater awareness of how platforms like Facebook have commodified their attention, shoppers now expect its value to be respected by brands. They won’t waste a moment trying to decipher unclear messaging or search for inconveniently-located information.
Initiatives aimed at time-poor shoppers such as voice shopping, click and collect, subscriptions and automated just-walk-out stores are all popping up to address this development. Payments, especially, is feeling the need for speed – while reports of the death of cash are still greatly exaggerated, payments flexibility is huge right now.
Latitude Financial Services chief country officer for New Zealand, David Gelbak, says this trend is expressed in finance through innovations like Buy Now Pay Later (BNPL) services and instant provisioning. With instant provisioning, customers can download the Latitude App and access a working virtual card from their mobile device as soon as they are approved.
It’s so fast that a consumer could be sitting in a café, download the app, receive a virtual Gem Visa card and pay for their coffee on the spot. A physical card is also delivered later.
“If you look at instant provisioning, that talks very much to that sort of mindset where the customer is no longer willing to wait,” Gelbak says. “And we shouldn’t make them wait for five, seven, 10 days for a card to turn up in the mail.”
Gelbak says that these customers may desire instant gratification, but they’re far from out of control. In fact, he says,consumers who desire instant services “love the sense of control” they get from BNPL services like Latitude’s Genoapay, which offers an easy-to-understand split of 10 weekly interest-free payments.
Many consumers have now learned to shop with this instalment-payment system in mind, says Gelbak: “I think that’s going to have a profound impact on retailers moving forward. I can see a time when we walk into stores and it will say, $300 for an item or 10 installments of $30 because customers are now learning to think in instalments.”
Gelbak expects younger consumers may one day apply this thinking to belongings.
“You and I might view ownership as ownership outright, but I think what’s really interesting about this segment is that ownership doesn’t equal ownership outright.”
The BNPL landscape is set to change further in New Zealand following the December 2019 announcement of a strategic partnership between Latitude and Mastercard. The new initiative enables Genoapay customers to Buy Now Pay Later at any of Mastercard’s nearly 53 million merchant partners worldwide. It will launch in New Zealand this year.
Gelbak says the new initiative solves a pain point for shoppers as BNPL is currently “very episodic”. It’s available at some retailers and not others, spread across several brands. The new initiative will be very convenient for both consumers and retailers, and it will allow the BNPL facility to grow: “Our customers will be able to tap and get a BNPL facility on a $100 pair of shoes. Or if they want to buy dinner. Or whatever they want to do, the facility will expand.”
In the US, the latest wellness trend sees a non-psychoactive cannabinoid called cannabidiol or CBD oils becoming incorporated into many personal-care products. CBD is still not freely available in New Zealand, but given that we can expect a cannabis referendum later in 2020, it might be prudent to keep an eye on how it’s going overseas.
Read The rules are changing: Four trends shaping 2020
Read Insight One: Values-based retail evolves
Read Insight Four: Social gets serious
This story originally appeared in NZ Retail issue 766 February / March 2020