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Wednesday, May 22, 2024

Innovation Innovation

By James Pepper, Technical Services Director, Vista Retail Support

With more than two million students living across the UK, this is one demographic that simply can’t be ignored by retailers. Figures from global business information service Experian puts the total amount spent by students in 2015 as £30 billion, with estimates for 2020 as high as £37 billion.
On average, a single student spent £13,000 last year. Only the retailers who are prepared to embrace innovation and enable contactless and mobile payments will receive their share of this.
Students crave convenience, sending them away from the tills of tech-poor retailers and into the doors of their innovative competitors. Recent research by Vista shows a clear preference among students for card payments, with 87% preferring them over cash payments. While this may not come as a surprise, the research also showed that  39% of students prefer contactless payments above all. Even more – an astounding 46% – said they would be more inclined to shop with a retailer that offered reliable contactless payment. Another 36% said they want to use the technology on their smartphones to pay for goods.
The survey also suggests that too few retailers are chasing innovation and using this technology to actively cater to the student demographic. Despite being the preferred method of payment for 39% of students, contactless cards were the most common form of payment for only 36%. Mobile payment apps, were preferred by 9% of students but only 4% named them as their most common method of payment. If resistance to innovation on the part of retailers continues, this gap will grow wider.
The real value of installing up-to-date point-of-sale (POS) equipment increases each year as students and other consumers continue to rely more heavily on contactless cards and mobile payment systems, particularly with the recent release of Android Pay opening up the option to those without iPhones. Figures released by the UK Cards Association reveal that during January this year, over £1.1 billion was spent using contactless cards, an increase of 286%.
According to the Vista survey, the main benefit drawing students to contactless cards was speed, with 90% of respondents listing it as a reason. Meanwhile, 46% said they preferred contactless cards because they didn’t like carrying cash and 18% said that contactless cards make it easier to track their spending.
This preference carries a heavy weight for this tech-savvy demographic. When asked what would persuade them to enter a shop, 47% of students said contactless payment technology. In addition, 13% said they would avoid a store altogether if it did not allow them to pay via a contactless payment card.
Despite many retailers already being equipped to accept contactless payment cards, many sales associates and customers are unaware of this capability, meaning retailers are missing out on lucrative sales. The key to unlocking this revenue stream will prove to be educating staff on the store’s payment capabilities and making sure any students entering the shop are aware that contactless payment – and possibly mobile payment – are accepted on the premises.
As UK retailers prepare for the annual influx of students returning from winter break, they must ensure they have the ability to transform this valuable demographic into loyal customers.

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