As the adage goes, “The customer is always right,” and never have those words been truer than in recent years. New developments in the e-commerce world, the payments industry, and the shopping experience in general have resulted in an abundance of choices for consumers. Companies of all stripes are constantly trying to deliver the best possible products and services to meet the increasing demands of the marketplace. One way businesses can improve their customer experience (CX) is by delivering a true omni-channel experience—by facilitating smooth operations for wherever, whenever, and however consumers wish to make purchases and payments.
To learn more about the expansion of the consumer landscape and how fintechs can use omni-channel solutions to address complex and evolving customer needs, PaymentsJournal sat down with Corey Young, CEO of Agile Financial Systems (AFS), and Don Apgar, Director of Merchant Advisory Practice at Mercator Advisory Group.
Consumer behavior is changing
Along with so much else about our daily lives, the COVID-19 pandemic has dramatically altered the trajectory of consumer spending patterns. According to Mercator research, 48% of U.S. consumers who viewed potential purchases on their mobile phone ended up making the actual purchase via their mobile phone. Additionally, 40% of surveyed consumers said they use some sort of device (e.g. phone, computer, tablet) to research what they are going to buy prior to making a purchase. These statistics represent significant upticks from previous years, and while these changes are not necessarily wholly attributable to the pandemic, the bottom line is that consumers are always looking for the most efficient way to make their purchases.
“When we talk web, mobile, and in store as the omni-channel experience, the lines are really starting to blur,” said Apgar. Consumers are not just making online purchases or checking out products to buy from their homes, they are also conducting research on their devices while they are shopping in-store. Yet another relevant statistic shows that 60% of consumers have used Buy Online, Pick-Up In Store (BOPIS) to make their purchases.
People can also do comparison shopping from within the store by pulling out their phone and checking to see if they can get a better price elsewhere. Amazon was among the first to offer an app feature where shoppers could scan in-store barcodes and immediately compare store prices to Amazon prices, allowing consumers to make a choice about whether they want to prioritize cost effectiveness or immediacy—whether they want to save $10 or go home with their purchase in the next half hour. “Everybody’s making the transition over to that sort of buying preference,” said Young.
How fintechs address omni-channel needs for merchants
Advances in API technology have allowed for merchants to connect with the various products and services that help them best serve their customers. “Before, you would have to have built all this into your software system and provided that to the customer,” explained Young. These days, merchants can focus more on their core strengths as a business and outsource any missing pieces to fintechs with the needed expertise. “I can go out and connect to them via API,” Young continued, “bring that into my solution, and then offer a more robust all-in-one solution for my customers.”
These API connections are the foundation of a true omni-channel solution. “The expectation of the consumer is now evolving in the ways that they want to interact with the merchant,” said Apgar. Providing seamless integration is of the utmost importance. The customer is not necessarily going to be privy to the back-office data flows of a business, and merchants will need to rely on those same kinds of APIs to bring smooth and simple data connections.
APEXConnect, the core product from AFS, delivers exactly that kind of integrated omni-channel solution via its API library. “You need to be able to allow customers to start their journey on the web, all the way to your store,” said Young, “or maybe they started on their laptop web browser, but then they want to continue that cart over to their mobile application. The way that you have to do this is by seamlessly passing those data pieces through those eight various APIs in order to create that true omni-channel experience.” The goal, according to Young, is to take a full data point wherever it needs to go—from the web, to ERP, back to the web, and into the store, so that the customer experience is uninterrupted by channel switching.
The same desire for efficiency is shared by businesses themselves. Merchants might once have acquired the best systems for their various operations—POS, e-commerce, mobile apps—but had no means by which the systems could communicate with one another. Now, businesses are looking for fully integrated solutions. “That’s really the next hill we have to climb to get the true omni-channel functionality that the customer is expecting,” said Apgar.
Integration lowers barriers to access
One of the clear downsides to resisting the implementation of omni-channel systems is that standalone solutions lead to operational inefficiency. If a whole swath of customers does most of their shopping via mobile phone, any disconnect between a company’s mobile operation and the rest of their business is going to hurt sales. “If you’re able to get to those people, now you’ve reached new customer segments, and in turn that’s going to increase your sales,” clarified Young. “The more sales and the more touchpoints you can get on that customer, the more you’re going to increase your customer’s lifetime value.”
Those touchpoints can deliver real-time data to consumers that actively helps build and retain customer satisfaction. Imagine, for example, if a merchant’s online inventory listed ten pairs of pants in stock, but upon arrival at the store the customer found that there were only five (and none in the right size!) That negative experience will turn customers away. Comprehensive and fully pre-integrated omni-channel solutions like APEXConnect prevent that sort of missed data connection from happening. “Your goal is to create sales and turn over your inventory,” explained Young, “and this is just going to help you get that done in a lot more efficient manner.” Apgar added, “I don’t think you can replicate functionality through ad hoc integration that you can [get] with a comprehensive solution.”
As e-commerce has become more popular, many brick-and-mortar stores have expanded into the online space. But digital solutions are so prevalent now that sometimes the process moves in reverse: e-commerce brands develop an online following and move into brick-and-mortar retail. Targeted social media advertisements can replicate word-of-mouth and substantially grow a company’s brand presence, working on dual online and in-person fronts. “You can kind of cross-pollinate with different customers to drive your sales through your brand,” Young summarized. This omni-channel approach is a great strategy that is both wide-reaching and data-driven. “You can start to build a clientele through Facebook ads,” Apgar added, “then let the data from Facebook commerce inform where you should open the first store. That gives that physical investment a higher ROI in a shorter timeframe than if you were to just do market research.”
Overall, AFS wants to use APEXConnect to create an omni-channel platform for both merchants and their customers. Whether businesses need commercial banking, lending, consumer lending, BNPL, or anything else in the payments space, AFS can offer a centrally located financial suite through which those businesses can operate. “Technology has come full circle,” said Apgar, explaining how a one-size-fits-all solution was replaced by purpose-built systems with deeper functionality, which was in turn replaced by assembling breed components, often provided by local community banks. But now, Apgar concluded, the tide is turning towards digital and towards omni-channel, and “in buying solutions that are fully integrated out of the box.”
