UK Omni Channel Payment Experience Q3 2016

UK Omni-Channel Payment

Customer Experience

Q3 2016

As e-commerce and m-commerce sales

continue to grow, retailers and payment

service providers look how to manage the

payment experience to improve

convenience, control and ultimately

conversion.

This ‘bite size’ research is a snap shot of the

ecommerce check-out experience of 54 well

known UK retailers and their omni-channel

return and refund capability.

The sample size has been limited to reflect

processes of the top non-food retailers in

the UK.

Current State of UK Omni-Channel Payments

54 top UK Multi-Channel Merchants

Payment Options Available

Ability to Return to Store

Refund Processes

Omni-Channel Payments Customer Experience Report: Q3 2016

As retailers succeed in breaking down the silos to achieve omni-channel merchandise

management, often payment is overlooked and the customer experience severely

compromised.

Offering a wide choice of payment methods must be balanced with the ability to deliver

a consistent brand experience and meet customer expectations for easy return and

refund. ‘One click’ payment may boost conversion rates but not being able to use a gift

voucher online or receive a refund instore to the original payment method will have the

opposite effect.

Core Principles of Omni-Channel Payments

Store e-Com m-Com Phone

Loyalty Scheme : collect and redeem benefits in any channel

Refunds : receive a refund to the original payment method across channels

Payment Methods : consistent payment options includng gift cards & vouchers


All retailers surveyed follow the same basic steps to complete an order using a progress bar.

Step 1: the ‘Sign in’ process varies in complexity, encouraging account set up for personalisation and faster future checkout. In contrast, ‘guest log in’ options, where available, are not necessarily quicker for one off purchases.

13% of retailers show steps 2-4 on a single page.

Discount codes are typically handled before progressing to payment. However, handling of gift cards and vouchers is dependent on how the payment engine is integrated.

Check-Out Experience

1. Sign in / Guest log in

2. Delivery 3. Payment 4. Review &

Confirm


Accepted Payment Methods

0%

20%

40%

60%

80%

100%All merchants surveyed accept

Visa and Mastercard payments.

Most offer limited payment options.

Not all store gift cards are

recognised for online purchases.

More often than not, payment

methods are not shown until the

payment page.


Alternative Payment Methods

* Source : Attitudes to Payments Research Report 2015

78% of the websites surveyed accepted payment by PayPal.

New ewallets are starting to appear but have yet to achieve more than 5% market

penetration.

Zapp pay-by-bank looks to capitalise on the increased penetration of smart phone

ownership that reached 84% of Brits in 2015 and of which nearly half (46%) use

mobile banking.* As yet they are not visible on the check out pages of our leading

merchants.


http://www.zapp.co.uk/

Is Your Loyalty Scheme Omni-Channel Ready?

Of the websites surveyed……

87% of retailers use discount codes to stimulate sales.

31% use a loyalty scheme, store account or store credit card to

recognise customers shopping online. These allow access to

data to understand cross channel purchasing behaviour, create

targeted offers, manage loyalty points and introduce features

such as buy now pay later.

Only 3 merchants allow (part) payment using loyalty points.

The replacement of paper vouchers by eVouchers has pushed

online acceptance to 61%.


Card Purchase Return to Store

Cannot be returned instore

13%

Refund process not specified

11%

eCom refund (delayed) 4%

Giftcard / store credit 2% Instore refund

70%

Only 70% of merchants are

confident in their ‘return to

store’ policy…

Delayed refunds

Although only 4% of the

websites explicitly state that

refunds are only activated

once the goods have been

returned by the store to the

e-com warehouse, in

practice this is more

common.


Return of PayPal Purchases to Store

Cannot be returned instore

40%

Instore refund 15%

eCom refund (delayed)

7%

Refund process not specified

17%

Instore refund to card behind

PayPal account 4%

Giftcard / store credit 17%

Limited Service

Omni-channel refund processes struggle with alternative payment methods. Only one retailer specifies the use of the PayPal app to generate a barcode used to process an instore refund.


Omni-Channel Payment Infrastructure Standardisation

Merchant Estate

Face to Face

Mobile/ In-App

eCom

Call Centre

Traditional terminal

SW / mPOS terminal

Payment Gateway

Consolidated Reporting

Tran

sacti

on

S

ervic

es

Acquiring & Collection Services

DCC

Tokenisation

Mail link

Fraud Control

Loyalty

Shared Services Customer

Stock Movement

Settlement Self-serve

Trx Log


The core attributes of a successful omni-channel payment strategy ensures that the

customer experience is simple and secure:

• Payment – consistent payment options including gift cards and vouchers.

• Loyalty – collect and redeem benefits in all channels.

• Refunds – receive a refund to the original method of payment in any channel.

The refund process can ultimately define the overall consumer experience impacting on

brand credibility and trust, but many retailers are yet to fully address this.

To achieve operational cost efficiencies, reduce overheads and have effective security

controls, back end processes should also be reviewed:

• Standardised infrastructure – shared back end services such as tokenisation.

• Consolidated reporting and reconciliation – automated exception based reporting

Summary


CONVENIENCE CONTROL CONVERSION

OnStrategy Consulting is an independent consultancy providing market

management, customer experience and communication services. Founder and

owner, Emma Allen has over 20 years of international B2B and B2C experience in

retail, retail technology and retail payment services delivering product and solution

innovation strategy for market leading companies.

By bridging the gap between technical and commercial teams, we work with cross

functional international teams to define and align customer focused strategies with

a practical approach for successful implementation.

With a passion for customer service and business operational efficiency delivered

through the seamless integration of technology, OnStrategy Consulting believes in

creating demonstrable value.

For further insight on the omni-channel payment experience or support to

deliver your strategic objectives contact [email protected]

About OnStrategy Consulting


mailto:[email protected]

Emma Allen

Principal Consultant

OnStrategy Consulting Limited

[email protected]

+44 (0) 1908 551012

mailto:[email protected]

Retail

UK Omni Channel Payment Experience Q3 2016