Meeting consumer demand for frictionless payment experiences this Valentine’s Day
In an article originally published in Hospitality Technology, our President of Merchant Solutions Afshin Yazdian discusses how small businesses that offer an experiential service will need to leverage frictionless transactions to remain competitive this year.
Valentine’s Day is often a display of how far one’s affection and wallet can be stretched to treat loved ones to a special occasion. In fact, this year American consumers are expected to spend $25.9 billion on Valentine’s Day, according to the National Retail Federation (NRF), with the trend of gifting experiences, such as hotel stays, dining out, and romantic excursions, outpacing traditional items.
The report indicates that Valentine’s Day-related consumer spending on conventional retail purchases, like jewelry for example, will account for 21% of the purchases, while 32% is projected for celebrating the occasion with an evening out. The trend of gifting experiences is up from 26% last year and the highest percentage since NRF started tracking this behavior in their annual report.
Merchants should take notice as there is nothing worse than a clumsy payment experience at the end of the night when you’re trying to enjoy a special evening out. To maximize sales and successfully manage consumer expectations during seasonal retail events like Valentine’s Day, small to medium-sized businesses (SMBs) that offer an experiential service will need to focus on creating a positive customer experience at the checkout to stand out in the competitive retail landscape.
Creating a frictionless experience
Valentine’s Day is the fifth largest spending event in the U.S. after the winter holidays and Mother's Day, and with consumer demand for experiences continuing to grow, customers will choose to patronize businesses that will help them celebrate the holiday in a meaningful way. For many merchants, this means ensuring the customer’s needs are met throughout the entire journey, including at the point of sale.
Providing a smooth checkout experience to customers is key to creating a winning strategy. In a study commissioned by Paysafe that surveyed a group of brick-and-mortar SMBs in the U.S., 70% of respondents say it’s a priority for them to integrate new payments technology to enhance customers’ experiences, and 69% agree that they’d like to reduce the time their customers spend to complete a purchase.
Particularly for restaurants and hoteliers looking to leverage a competitive advantage this Valentine’s Day, having a reliable payments system that quickly processes a wide range of payment methods can free up time and enable staff members and management to focus on personalizing the customer experience.
Embracing payments modernization
Our latest research found that while fixed terminal card readers are still the most popular type of payment equipment currently present at in-store checkouts (65%), many merchants told us they are looking to implement more modern systems within the next two years. For example, 49% want to offer smartphone-driven systems, such as QR codes, which allow customers to scan and pay for items on-site using their phones, and 42% plan to offer apps where customers can automatically pay for goods and services ordered.
With solutions such as QR codes, customers can access a restaurant’s menu, order, and pay for food and drinks directly through their mobile devices when they want, with some payment solutions even allowing customers to start an online tab. Diners can initiate and complete their transactions without having to wait for a server, ultimately speeding up the checkout process while helping frequently understaffed servers focus on serving customers.
Preparing for seasonal surges in sales
Understanding how the landscape is changing, the technology that’s available, and which solutions are right for their particular business can help more merchants achieve the growth they desire. This means working with the right payments partner to create a fully optimized and simplified checkout where customers will want to return again and again.
In a separate 2022 study commissioned by Paysafe, which surveyed over 1,100 online merchants in 12 countries, more than three-quarters (76%) of the merchants surveyed run online businesses that depend on the revenue they receive from seasonal sales, and for these companies, being able to handle surges in demand is vital. Failure to effectively mitigate these challenges may result in lost revenue but could also wreak havoc on the business’ reputation and impact future sales. Working with a reliable payments partner during these peak times is therefore essential for both online and in-store merchants.
If you’re a small or medium-sized business, learn more about Paysafe’s Small Business Program.