By Colin Neil, Managing Director, Adyen UK (www.adyen.com/en_GB/)
The hospitality sector is facing mounting pressures. In August this year three quarters of pub owners said that they may close this winter because energy bills are increasing and they are becoming unmanageable. It’s perhaps unsurprising, then, that when we asked how IT teams in hospitality and retail businesses were investing in their infrastructure right now there was a mixed response.
Most IT leaders (58%)* in these industries said the cost-of-living crisis hadn’t impacted their company’s plans to invest in digital transformation. However, a significant portion of IT leaders (40%) said the cost-of-living crisis had meant digital investment plans had been shelved.
This is despite almost all (83%) believing that implementing new technology is key to their company’s strategy of winning customers and market share. As the sector settles into a prolonged period of economic uncertainty, customer expectations of digital experiences continue to rise. Tech is proving key to converting purchases and improving loyalty – which is even more important when consumers’ discretionary spend is less than before.
So, let’s explore technologies that could help your business to find new capabilities and win over customers.
1. Customers’ changing payment expectations
Recent Adyen research found 22% of customers admit to leaving a restaurant or store without ordering or buying something because they haven’t been able to pay how they want. Digital wallets, like Apple Pay and Google Pay, are now a leading payment method, with 54% expecting to be able to use them to pay for goods and services. However, only 22% of businesses in the sector currently accept digital wallets.
We also found a disconnect with hospitality businesses investment plans. Only one in ten were planning on using technologies to improve the dining experience over the course of this year. This is a missed opportunity for businesses to meet customers’ demands. And, as the global tourism industry recovers, businesses might also want to consider whether they can accept international payment methods from outside the UK. Just over a quarter (26%) of businesses said they accept international payment methods such as AliPay and WeChat Pay. These are popular with Chinese tourists and could help to boost conversion with both visiting and domiciled Chinese consumers.
Meeting customer payment demands can be a relatively low-cost way to improve the customer experience. With the right payments partner adding new payment methods to meet domestic and international audiences can be as simple as a few clicks.
2. Technology that provides convenience
One of the biggest frustrations for diners is checking availability or making bookings. According to our study, almost half (48%) of consumers think restaurants and bars need to make booking and ordering easier by creating better online links to their physical locations. And two fifths (41%) said they wanted businesses to use technology to improve the guest experience, such as offering new ways to pay, or using kiosks to order more quickly. Businesses also stand to benefit from these initiatives since you’ll have access to more data to better understand customer preferences.
We partnered with software firm Vita Mojo, to help Leon offer large screen in-store kiosks that modernised the ordering process and enabled customers to order and pay by themselves. An app also helped the fast food chain to know its customers better and improve the dining experience. Within a week, Leon could see whether its guests had previously visited the restaurant, how many times and order frequency thanks to Adyen’s tokenization service. This service securely stores customer card data and generates a token for subsequent purchases. Furthermore, digital ordering at Leon has seen higher satisfaction, higher spend, and higher frequency of visits.
3. Fighting fraud
UK Finance found victims of fraud in the UK lost £1.3 billion in 2021. And criminals continue to look for new ways that they can steal business’ and their customer’s money. During the cost-of-living crisis, more than three quarters of UK adults have been targeted by scammers attempting to trick them into handing over money and personal details.
It’s critical that organisations are able to help protect people from falling to fraudsters’ tricks. It’s why Strong Customer Authentication (SCA) came into effect for certain online transactions this year. Our research found that just 73% of UK businesses were prepared for SCA, and that customer transactions were at risk as a result.
If you are not yet compliant, or don’t know how to approach becoming so, then it’s a good idea to look for a payments service provider that can help you to easily manage this process.
Final words
The past few years have been tough on the sector. More and more, organisations are starting to see that payment technology can be a strategic driver of the business – particularly for their digital transformation efforts. Not only do modern payments systems open up new customer experiences that people demand, it can help create efficiencies in operations, as well as provide valuable data and intelligence that can benefit the entire business.
The summer tourist season may be drawing to a close, but the peak period in the lead-up to Christmas is approaching. With businesses facing a difficult winter now is the time to get prepared. Consider a payments service provider that can help you to navigate what lies ahead in the future.
* Adyen commissioned Censuswide to poll IT leaders in 250 retail and hospitality businesses. August 2022
