Just as times of war often lead to rapid technological advancement, the impact of the Covid-19 pandemic has forced us all to adapt our lifestyles and daily habits. Accelerating changes that may well have come about more slowly otherwise.
As a result, we may well have changed our habits for good.
The digital landscape and retail
Across the globe, often out of necessity, people have spent more time online than ever before. Last June, Ofcom reported that in April 2020, UK adults spent a daily average of four hours and two minutes online, a record figure. From online learning to remote working, 2020 shifted even more aspects of our lives into the digital universe. Platforms such as TikTok and Zoom have also seen unprecedented growth as we all find new ways to connect and communicate.
That reliance on the digital world has been keenly felt in the world of online shopping – providing an alternative to physical shops and removing the need for face-to-face contact. Of course, many of us have been doing just that for years but even the most ardent technophobes have been forced to embrace the benefits of going digital.
Back in December, leading media investment company GroupM predicted that the global retail e-commerce (including automotive sales but excluding food and delivery services) would amount to a record of $3.9 trillion for 2020 and will continue to grow to $10 trillion by 2027.
What do these changes mean for retail finance?
There’s no denying that the Covid-19 pandemic has detrimentally impacted the incomes of many families. As we continue to come to terms with the new economic landscape, as well as the increased digitization discussed above, the demand for retail finance will be greater than ever.
For expenditure of all sizes, but particularly medium to large ones, retail outlets that allow their customers to buy now pay later will have a distinct advantage. That is where platforms like ours can make all the difference; fully integrated services which can provide immediate finance decisions, resulting in fewer abandoned baskets. Allowing more people to spread their spend over several regular instalments has become a vital service.
There are different options available for different customers, often based on their financial circumstances. And, this demand on consumer finance has placed more pressure on retailers to offer better, more appropriate solutions so increasingly merchants look for finance options for consumers from a range of lenders and offer a range of products. In order, of course, to meet every type of demand.
Digital efficiency in a physical world
These changes can also be felt in the physical or offline world of retail. Currently, as reported by Mckinsey.com, there is a decrease in shopping frequency but an increase in basket size. This trend is likely to continue for the foreseeable future as we continue the fight against Covid-19.
This doesn’t mean the end of the high street. As per Newton’s Third Law of Motion, “every action has an equal and opposite reaction”, once vaccinations have been rolled out to the majority of the population and restrictions have been eased, people will return to the shops with gusto, especially if it coincides with the summer months.
Not only that, there are certain products that will always benefit from being seen (and felt) in person before being bought, something which is not possible in the online world, even with the advancement of augmented reality.
However, consumers now used to the efficiency and flexibility of the digital world will now want their in-store experience to reflect that, in particular with regards to the check-out. This is of particular importance to retailers offering consumer finance and is why our platform is built with mobile phones in mind, enabling merchants to use it for physical products.
Applications can be completed in-store in only four minutes with an instant finance decision at the end. Our flexible platform gives customers increased approval rates and allows merchants to keep up with the new increased demand for retail finance.