worldpay consumer behaviour and payments report...

WORLDPAY CONSUMER BEHAVIOUR AND PAYMENTS REPORT 2016Essential insights into today’s consumers

Welcome5

In-store:Shopping as an experience

7

Shopping online:Choice and trust, or bust

17

Future:Harnessing the possibilities of mobile

31

Omni-channel:Seamless success

25

About Worldpay36

Welcome

Who are today’s consumers? What do they expect from theirshopping experience?

These two questions underpin the success of every retail business, today and in

the future. With consumers more connected and informed than ever before, it’s

a challenging and competitive environment. Success lies in understanding the

customer journey end to end.

In this report, we uncover what consumers like and dislike about certain aspects

of their shopping journey. In March 2016 we surveyed over 2,500 consumers

across the UK, analysing their behaviour across the different buying channels,

with in-depth insights into their behaviour to give you a deeper understanding of

what they want from retailers.

— What’s the greatest pain point when shopping in-store? — How can online retailers reduce checkout abandonment? — How are omni-channel services affecting the shopper journey? — How do consumers want to shop and pay in the future?

All these questions and more are answered in this report. We hope you enjoy

the insights.

James FrostCMO, Worldpay

Consumer Behaviour & Payments Preference Report 5

Online shopping offers modern consumers the convenience and speed to shop any time, anywhere. Mobile devices make location irrelevant, facilitating an ‘always on’ consumer that can purchase at their fingertips.

So why do people still shop in-store? Clearly, there’s the tangible element

such as trying things on and browsing products. But just as important

are the social elements, such as shopping with friends and enjoying the

atmosphere of the store. Shopping in-store is a big part of every day life; in

fact, around half of consumers are more loyal to the brands they shop at

in-store compared to online.

But what’s putting people off in-store shopping? A large proportion are

frustrated by queues and waiting to pay. 4 in 5 shoppers won’t wait for more

than five minutes to pay. For businesses, it’s essential that the payment

process is seamless if they don’t want to lose those sales.

Key questions for in-store retailers:

— Are you giving consumers a compelling reason to visit your store?

— How are you rewarding your shoppers’ loyalty?

— Is an inefficient customer journey losing you sales?

— How could you use technology in-store to improve the

shopping experience?

In-store:Shopping as an experience

6 7

+51+46+30+25Being able totry products

Socialising with friendsor family

Browsing storesand items on a whim

The atmosphereof the store

51W51% 30W30%46W46% 25W25%

Our consumers love the social aspects of shopping - such as meeting up with their friends - and value the

chance to discover products at first hand. It’s a total experience that (so far) can’t be replicated online.

Consumers are being let down at the final step of their shopping journey. Businesses should focus on

ways to reduce friction at the point of payment, with mobile payment solutions helping consumers pay

anywhere in-store.

So what makes shopping in-store fun and exciting?

And what’s the most frustrating thing about the

in-store experience?

39%

22%

17%

10%

Queuing and payment process

Finding a product

Comparing products

Understanding or trying a product

Consumer Behaviour & Payments Preference ReportConsumer Behaviour & Payments Preference Report8 9

Despite our national reputation as queue-lovers, having to wait in line to pay is the greatest pain point for

in-store shoppers. Retailers who eliminate long queues will have the competitive advantage, as 79% of

shoppers won’t wait to pay for longer than five minutes.

Since most shoppers always have their card on them, Chip and Pin is obviously the most convenient

payment method - it’s the reliable option. Cash remains popular too and is seen as the quickest way to pay.

4%Less than 1 minute

41%3 — 5 minutes

34%1 — 3 minutes

21%More than 5 minutes 53%

Chip and Pin

31%Cash

10%Contactless

card

4%QR Codes

2%Smart phone

Big queues? How long will your customers wait to pay? Chip and Pin is still the way we like to pay.


Ahead-of-the-curve Londoners use contactless payments more often. But consumers are wary of using it for

higher-value transactions (over the current £30 limit) because of security concerns.

63X 37X63%No

40% A few timesa week

GreaterLondon

GreaterLondon

GreaterLondon

GreaterLondon

GreaterLondon

11% Once a day

9% More thanonce a day

22% A few timesa month

19% Less thanonce a month

37%Yes

180+110=

180+220=

90+190=

150+90=

400+400= 40%

18%

15%

18%

9%

Contactless technology: how often do you tap and go?

Would you like to use contactless to pay for transactions

over £30?


Mobile technology is now part of everyday life in the UK. But are retailers making the most of it? Going

mobile in-store has so much untapped potential: it enables staff to engage with shoppers, helps them

find what they’re looking for and takes payment on the spot, immediately eliminating the pain points (like

queueing) that frustrate consumers.

Most consumers are concerned about the decline of their high streets as online shopping takes over. This

is not the end of brick-and-mortar retailing however - shoppers still feel emotionally connected to in-store

shopping and are more loyal to those brands, including a healthy 58% of 16-20 year olds.

Nearly half of consumers say they are more loyal to the brands they shop atin-store than they are online

67+33M 61+39M63+37M 55+45M67%helped them get what they

wanted quicker 63%found it very personal

and engaging 61%got better information on the product / better

service 55%were able to

order an item that was out of stock in-store

48% would like to pay anywhere in-store if staff could take

payment with a mobile payment device. Only 27% have ever

experienced this. For those that had experienced this service:

Could retailers make the shopping experience better by using

technology? 80% of consumers think so.


It won’t be a surprise that 73% of consumers enjoy online shopping because of the convenience of shopping from home, and over half value the increased choice and chance to shop around for deals. We’ve become a nation of savvy online shoppers, and today internet retailers have to work ever harder to retain customer loyalty in a highly competitive environment.

Although we all love to shop online, there are still sticking points which can

often lead to abandoned shopping carts and lost revenue for retailers. The

average checkout abandonment rate is a staggering 67%.

So why aren’t retailers always able to close the deal? The checkout process

is a key improvement opportunity, given that 1 in 5 customers find it a

major obstacle in their shopping journey. Faced with the hassle of creating

a new account, paying extra card fees, or simply not trusting the site with

their financial details, many consumers will simply give up and shop on

another site.

Simplifying the end to end journey is crucial if online retailers are to stay

ahead of the competition.

Key questions for online retailers:

— Does your checkout have too many steps?

— Are you providing the right payment methods for your customers?

— How can you simplify your customer journey?

Shopping online:Choice and trust, or bust

16 17

28+23+19+17+13+UThe online customer journey can be long and painful, at a time when consumers are demanding

convenience and speed. Delivery - particularly when it costs extra - is off putting, and a tricky checkout

process can often be the last straw. Checkout abandonment runs at a costly 67%.

People love online shopping because it’s convenient, and they can easily shop around to find their perfect

choice. Our lives are inextricably connected to the internet, and shopping is an essential element of that.

?#@*&%!

28%

14%

17%

19% 23%

Delivery

Finding a product

Und

erst

andi

ng a

pro

duct

Checkout & payment process Comparing products

Why is shopping online fun and exciting? Which part of online shopping frustrates you the most?

55%Having access to

more choice

27%Getting products or

services quickly

73%Shopping in the comfort of

their own home

49%Finding the best

possible deals


www.myfavouriteonlineshop.com

Being forced to create an account is often one step too far for the busy consumer - they perceive it as a slow

and annoying process, even if it isn’t. Could providing guest checkouts be the answer to eliminating this pain

point? Another deal breaker is additional card or payment fees, which put off 25% of online shoppers.

58% feel that their payments are secure online but 56% believe that extra security checks like Verified by Visa and MasterCard SecureCode are necessary.

Interestingly 16-20 year olds are the most security conscious with 41% stating they only make payments less

than £100 because they are concerned about security (more than any other age group).

www.myfavouriteonlineshop.com

I had to create an account

The payment failed

The payment process was too difficultRetailer charged extra fees to use my payment methods of choice

I had to input too many payment details

Retailers didn’t provide my payment method of choiceI didn’t trust the site’s payment security

33%

20%

15%25%

16%

14%23%

Your Basket Proceed to Checkout

What makes you abandon an online purchase before

you finish it?


As security-conscious consumers, we’re now feeling more at ease with online payments, although over half of

us still aren’t comfortable with storing card details online. This conflicts with the 56% of consumers who are

convinced of the convenience of one-click purchases - something that’s not possible without stored details.

So retailers must build trust, reassuring consumers that their sensitive financial information is being properly

protected online.

It’s critical to offer consumers a convenient journey when paying online. Having too many steps at the

checkout, not providing adequate delivery options and setting up an account, all drives poor customer

experience. Businesses that offer a simplified journey whilst providing the flexibility and convenience to all

different types of shoppers will end up with happy customers.

67W 52W56W 38W52WBUY

GUEST CHECKOUT67%of 16-35 year oldsare more likely to

purchase on mobile optimised sites

56% think one-click

purchasing and buy buttons are great

52%would abandon their

online purchase if their preferred delivery option was not offered

52%prefer to buy from sites

where they don’t have to set-up an account

38%think that paying online is often slow/ there are

too many steps

Only 36% trust that stores will safely save their payment details.

Step 8 / 10


Shoppers are now taking technology for granted, and expect retailers to offer flexible services that enable them to shop however they want, across any channel. This is highlighted by the fact that 92% would like to be able to check stock availability on a retailer’s website before they visit the store.

The blurring of channels have been further fuelled by click and collect,

providing customers with the greater choice offered online together with

the convenience of trying and buying in-store. The introduction of the click

and collect service has been highly successful for most of the UK’s big

retail brands, with 43% of our consumers (and 52% of the 21-35 year olds)

agreeing that it means they now shop online more.

If retailers don’t adopt a truly omni-channel approach, they risk losing their

competitive edge. Consumers expect to be able to shop on their terms,

and see buying as one experience regardless of channel.

Key questions for the omni-channel approach:

— Can you offer better shopping services than your competition?

— Are you using technology to enhance the customer journey

across channels?

— How integrated and consistent is your online and offline experience?

Omni-channel:Seamless success

24 25

57+4339+4820+66Click and collect means maximised convenience and (generally) free delivery - ideal for busy

consumers. Retailers then benefit from the ‘impulse purchase factor’ when consumers collect in-store.

It’s a win-win situation.

Technology is impacting the customer experience, with 21-34 year olds leading the way for omni-channel

shopping. The smartphone is the enabler here, facilitating the blurring of online and offline channels.

66%In the last month

20%More than 4 times in a month

Why do you use ‘Click and Collect’?

Percentage of peoplewho use ‘Click and Collect’

Percentage of people who end up purchasing an additional item when they collect their

item in-store

48%Convienience

39%It’s free

57%Only what they intended to buy

43%Purchase additional items

Click and collect has encouraged 43% of consumers to shop

online more often.

16 - 20 year olds 21 - 34 year olds

59%

46%47%

56%

62% 64%

53%

61%

People who have downloaded an

app to get better discount in

a restaurant,bar, shop

People who have downloaded

vouchers and coupons while

shoppingin-store

People who regularly research products in-store

then find the cheapest price

online

People who have taken a photo toget advice from friends/ family before buying


Technology - particularly mobile - is changing how consumers approach the shopping journey, online and

in-store. Shoppers now use the internet to compare products, read reviews, ask advice and get discounts.

How retailers can add value for these highly informed consumers is crucial to a successful sale.

9 out of 10 consumers would value being able to check online if

a product was in stock in-store.

People who would like to use their phone to scan a barcodein-store and then paying online 58W58%

People who say they’d like the ability to check if an item was in-stock before they went into the store simply by looking on the retailer’s website

92W92%


Who knows how we’ll all be shopping in 50 years time? However, it’s clear that in the next few years it’s all going to be about the smartphone.

Over half of shoppers (and 62% of 16-20 year olds) expect that their

phone will replace their card as their main method of payment. Even

now, 54% would happily leave home without their wallet, using their

phone for payment.

Simplicity, speed and connectivity will become ever more essential.

3 out of 5 shoppers would like to instantly buy products simply by

scanning on-screen TV codes and ordering via their phone. Whilst

a large majority (74%) want to see same-hour delivery on products

they’ve bought.

Technology will help unlock the future of retail. The important

question for businesses is which technology to prioritise for

investment.

Future:Harnessing the possibilitiesof mobile

30 31

54W

76WMobile is proving to be the catalyst in an omni-channel world. But will the phone disrupt payments; could

it make the need for cards obsolete? There is already a belief that this will happen, and with more than

half of consumers happy to leave their wallets at home, its surely just a matter of time.

would like to walk into a store and scan an item with their phone,pay/checkout instantly all through their mobile phone and walk out

the store without queuing up to pay.

would like to leave home without their wallet - being able to pay for everything through their smartphone (card details stored on your phone)

54% think that mobile phones will replace cards as the main

method of payment, rising to 62% for 16 - 20 year olds.

54%

76%


Consumers are clearly not ready for a facial recognition payment method. However we are clearly in a buy anywhere,

anytime phase of shopping. As TVs get smarter, they will be more connected to commerce, with consumers able to buy

items from adverts or TV shows using your phone. With the rise of Apple Pay, consumers are more welcome to biometric

payment technology. Speed is fundamental to today’s shoppers, who want instant gratification, shown here by the strong

desire for same hour delivery.

So, what do these insights tell us? Well, consumers have a greater expectation on technology and how businesses

should use it to improve the shopping experience. Crucially, they expect this across all channels, making a connected

and complementary journey key to happy customers. Technology has an essential role in enhancing the shopping

journey across in-store, online and mobile.

Speed is fundamental to today’s shoppers, who want to

buy anywhere, anytime. They demand instant gratification, even

expecting same hour delivery. Technology for a connected generation.

74%would like same hour delivery

56%are interested in using

biometrics to pay in-store and online using a fingerprint, palm

or Iris scanner

64%would like to store all loyalty

cards/ programmes on one card or smartphone App

59%would like to scan a code from a television screen to redeem

a coupon and instantly buy something after

69%are NOT interested in technology

that would allow them to pay with your face


About Worldpay

Worldpay is a leading payments company with global reach. We provide an

extensive range of technology-led payment products and services to over

400,000 customers, enabling their businesses to grow and prosper. We manage

the increasing complexity of the payments landscape for our customers, allowing

them to accept the widest range of payment types around the world. Using our

network and technology, we are able to process payments from geographies

covering 99% of global GDP, across 146 countries and 126 currencies. We help

our customers to accept more than 300 different payment types.

Worldpay UK has a 42% market share in the UK and helps businesses of all sizes

sell more to their customers by accepting card payments in-store, online, via mail

or telephone, and on the move.

Find out more at www.worldpay.com/uk

#1UK payment

services provider

300,000Worldpay customers

in the UK

30years experience

in payments

© Worldpay 2016. All rights reserved.This document and its content are proprietary to Worldpay and may not be reproduced, published or resold. The information is provided on an “as is” basis for information purposes only. Worldpay makes no warranties of any kind in relation to the content. Terms and conditions apply to all services. Worldpay (UK) Limited (Company No. 07316500 / FCA No. 530923), Worldpay Limited (Company No. 03424752 / FCA No. 504504), Worldpay AP Limited (Company No. 05593466 / FCA No. 502597). Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AF and authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Worldpay (UK) Limited is authorised and regulated by the Financial Conduct Authority for consumer credit activities. Worldpay B.V. (WPBV) has its registered office in Amsterdam, the Netherlands (Handelsregister KvK no. 60494344). WPBV holds a licence from and is included in the register kept by De Nederlandsche Bank, which registration can be consulted through www.dnb.nl. Worldpay, the logo and any associated brand names are all trade marks of the Worldpay group of companies.

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