Anyone who has studied the impact that emerging technologies have had on the retail market understands that e-commerce has significantly impacted the popularity of brick-and-mortar shops. Thus, it’s easy to understand why some people assume this trend will naturally continue. They believe that as technology continues to develop, shoppers will be less and less interested in going to actual stores to make purchases.
While there may be some truth to this assumption, surveys indicate that brick-and-mortar locations are still the preferred destination for shoppers who are ready to make a purchase. This is particularly true if the item they’re buying is the kind they need to see and test in person before deciding if it’s worth their money. While the average consumer reports using the Internet to research a purchase, in many cases, they prefer to make the purchase at a physical store.
In other words, we shouldn’t assume online shopping is going to replace real-world stores just yet. In fact, there’s good reason to believe that developments in the fintech sector can actually make brick-and-mortar shopping more appealing to the average customer. Both major brands and independent retailers can benefit from leveraging these technological advances in their favor. Here’s how.
Why Fintech Might Save Brick-and-Mortar Retail
Fintech products and services are popular for a wide variety of reasons—chiefly, convenience. Most fintech products take existing financial services and offer customers simpler ways to take advantage of them. This is why digital wallets have attracted many users. The ability to pay for an item with a smartphone instead of a card or cash is appealing to the millions of people who already carry their phones with them on a regular basis.
It’s only convenient, of course, if the places they visit accept digital payments. This is where the use of fintech technology can be a benefit to brick-and-mortar stores. By accepting this convenient payment method, these businesses may continue offering customers the efficiency they’ve come to expect.
Businesses can also design their own apps that link to or include digital wallets, offer loyalty rewards, and personalize shopping experiences. For instance, stores can make it so that every time an in-store customer makes a purchase through the store’s app or digital wallet, their personal shopping data is recorded, yielding a customer profile, over time, that retailers can use to better serve that customer. Ideally, the store will offer loyalty rewards based on a customer’s purchase history that are redeemable in-store. Stores can also use this data to alert users to relevant in-store promotions or new product arrivals that may interest them. Geotracking technology can even track when a customer is in the proximity to a brick-and-mortar location and send them an alert to attract them to the store.
It’s worth noting that these claims aren’t simply theoretical. Major brands have already experimented with leveraging technology in this capacity. For example, some Target stores have begun using geotracking beacons to alert customers to in-store deals when they’re close to a physical Target location.
Ironically enough, Amazon, which has often been characterized as the main force behind the shift from brick-and-mortar shopping to e-commerce, has also begun establishing physical stores that offer the same degree of convenience customers expect when shopping online. At these stores, customers simply walk out with the items they want to purchase, and sensors deduct money from their accounts. This cashierless purchase system uses fintech to make brick-and-mortar shopping more convenient than ever.
In the UK, popular coffee shop chain Caffe Nero has had massive success with a loyalty app that also allows users to place orders remotely and pick them up at a physical location. Simply giving customers features that help them avoid standing in line may be enough to attract customers back to brick-and-mortar locations.
No one can fully predict exactly how fintech will impact brick-and-mortar retail in the long run, but based on customer surveys and the potential of this technology, there’s a good chance it will actually make in-person shopping more popular, not less. Stores simply need to consider how they can use it to their benefit.