How Fintech Will Save The High Street

UK high street retailers are struggling with customer footfall because of technological advancements in recent years, ensuring that consumers have easier, faster and cheaper ways of purchasing what they need.

While this is just a marker of transformation through innovation, what hasn’t changed is that customers still want to use services provided by companies that they trust and it is clear is that the high street need to introduce new innovative rewards for it to thrive again.

According to a survey conducted by mobile payments loyalty app Yoyo Wallet with YouGov, while the UK high street is still the preferred way to shop, especially for those who between 18 and 34, the current experience is not meeting needs.

2018 welcomed GDPR in addition to PSD2 and open banking to the UK and financial institutions were forced to get to grips with the opportunities and threats that these new regulations created, as well as working with customer financial data that was now available via APIs.

High street banks need to stop being one-stop-shops and embrace a new approach to personal finance so that consumers can manage their money online and are rewarded for their custom, with programmes like mobile loyalty apps.

Michael Rolph, CEO of Yoyo Wallet, said: “Big chains like Primark go from strength to strength – and food and drink outlets such as Starbucks and Caffe Nero have done a fantastic job using fintech innovation through their mobile loyalty apps to keep customers coming through the doors.

“Investment in these innovations and taking the time to truly understand what customers want – remain key to survival for retail businesses on the high street,” Rolph said.

He continued: “More than half would be willing to share their personal data with high street retailers if they received a more personalised customer experience, with offers and discounts tailored to past purchases topping the list of demands.”

Yoyo Wallet allows customers to seamlessly pay, collect loyalty, get a fully itemized digital receipt, receive rewards and get personalized offers with a QR code scan. When their flagship retailer Caffe Nero ran an Iced Drink campaign, the results were staggering.

Baskets that contained an Iced Drink increased by 148%, customers that purchased an Iced Drink increased by 215% and spend on baskets containing an Iced Drink increased by 212%, so incentives work.

Caffe Nero’s Head of Marketing Marcus Denison-Smith said that because customers want experiences that are personalized and are increasingly rejecting wholesale offerings, the high street needs to step it up.

“Technology, and in particular FinTech Innovation, has helped Caffe Nero develop the customer relationship further than four walls and a till; transforming a transactional experience into something that’s now more personal, relevant, valuable and engaging, which is delivering tangible benefits.”

However, it is a question of knowing what the customer wants when before, the priority was for banks to make the most money and consumers just had to make do from the selection of providers and services out there.

Personalization is key, as Nick Hucker, CEO of Preoday, a digital ordering company, explained: “In a hyper-personal world, where customers increasingly expect their favourite brands to understand their unique needs and preferences, it should be no surprise that online retailers like ASOS and Amazon have gained strong, loyal followings.

“Customers return repeatedly, knowing their homepage will show them the brands and styles they love the most. There’s no reason that high street retailers can’t employ the same tactics; translating that personal service for the high street.

“Businesses need to make an investment in technologies that gather and analyse a customer’s spending data in a way that can be applied direct to marketing and loyalty campaigns. Similarly, in-store shopping experiences need to be streamlined.

“Investing in technology that aligns the expected levels of personalisation with order and pay-ahead functionality may prove the winning formula that retailers and food operators on the high street need.”

A report found that one in two UK consumers would be happy to share transaction data with third parties if they offered services that were more personalized. In addition to this, one in three would be happy to use banking services from tech companies, because of the personal products that are offered.

While Open Banking will make banking more transparent, customers will only provide their data if the service has increased visibility for them too. Alongside this, fintechs will be looking to take customers from the incumbents, but will need to prove that they are making use of the data they currently have, for example, by providing personal services.

With Open Banking, banks also have adopt loyalty and rewards schemes, which puts them in direct competition with the fintech industry and they would build up communication with their clients, that is currently lacking.

True Layer’s COO Shefali Roy said: “Using Open Banking, there is a wealth of new ways retailers can reengage their customer base. The first is by creating products or services that remove pain points – such as managing the payment of big ticket items at a POS.

“Next, there’s developing apps that supplement the in store experience. Finally, there’s using the information available through these platforms to get a better understanding of the spending habits and preferences of customers.

“Analysing consumer behaviour with analysed information can help retailers tailor their offering to better suit consumers.”

Source: Forbes