How businesses need to capitalise on customer spending in 2021
Last year, nearly every industry saw a change in the spending habits of its customers. Which meant that almost every business needed to adapt. As we look ahead to what awaits us in 2021, the changes that occur are likely to be less reactionary. So established businesses and new start-ups need to prepare now if they want to take full advantage of what is to come.
When we considered which of the shifts of 2020 will stay with us, it was clear that people’s habits and perceptions are unlikely to revert back to what they were before the pandemic. Our expectations have evolved, reducing opportunities in some areas but creating them in others. The question is: who will capitalise on them?
Marking new paths on the customer journey
Refining the customer journey has long been a focus for digitally native businesses but it has now come within the remit of almost every organisation. Very few businesses can rely on a good in-store experience right now and there’s no guarantee that will change soon.
This has made the online shopping experience essential for more or less everyone. But while every business has considered their online presence and branding, not all of them have yet honed their customer journey. And whether they are vying for payments, subscriptions, accounts or loyalty, no one can rely on legacy UX.
Online customer experience will remain a powerful differentiating factor between competitors for the foreseeable future. But while it is essential while the tides of custom are ebbing, it will still be imperative once the tide starts coming in.
Preparing for tomorrow’s demand
Across many industries there is pent up demand as people limit their spending to primarily digital services. But that bubble will burst at some point. As soon as there is an opening to do so, there will be a big bout of spending.
To boost the economy, governments may well encourage this pending boom. Loans could be granted thick and fast for business growth. And as the wider population finds an outlet for their disposable income, the companies that have prepared will reap the benefits.
So what should that preparation entail? Well, it comes around again to customer journey and user experience. Whether by offering sound buy-now-pay-later services or other less apparent incentives, perhaps simply encouraging discretionary spending through design, the businesses with newly-refined payment experiences will be the ones who attract the most customers.
It’s not for nothing that the last recession set the stage for companies like Uber, Slack and Groupon. There are always more startups after a recession. When people are reluctant to spend money in old ways, they might still be inclined to spend it in new ways, according to newly formed habits. Which leads us onto our next point.
Sticking the landing for a fussier audience
If there is a habit that almost everyone has picked up in the last year, it is that we have become fussier about where we spend our time online. 2020 forced us to retreat onto the internet full-time and we lost our patience with anything in that virtual landscape that was not intuitive.
While digitally native human beings existed beforehand, now the late majority has moved online. Everyone is acquiring a taste for what intuitive digital experiences can be and everyone is beginning to have higher expectations of online services and shopping.
Once expectations are set, they don’t go back. Consciously or unconsciously, we are searching for the path of least resistance now. Any buying experience that diverts from that course is liable to lose potential custom. A business that can crack the customer/client experience might crack consumer/client acquisition too – and be stickier to boot.
Stickiness is going to be essential if a company is to catch the wind of pent up demand later in 2021. But for businesses to increase their sticking power they need to reduce resistance to future purchases. For this, they might need to rethink the way they sell in the first place.
Riding the next wave of change
Everyone has been talking about Fintechs for a while now. And in some ways they are still the future. If you don’t have to go and see a bank manager for a loan, if you don’t have to get out your card to pay, the path of resistance is lessened. For the growing number of people who want banking services faster and easier, it’s here to stay.
But if your business isn’t offering banking services, this isn’t the innovation that will carry you into the future. Embedded banking, however, might do just that.
While Fintechs have a sexier look than legacy banks, embedded banking doesn’t have a look at all. It’s invisible. It’s not simply a faster and cheaper way of doing banking. Instead, by bringing the bank to the customer, it’s a different way of doing everything.
If businesses can invisibly give customers bank accounts so that there is a lower path of resistance to future purchases, they will be stickier. And if we can offer services that move cash between parties with unprecedented ease, new business opportunities emerge.
Purchasing habits will continue to change. It may soon become standard to pay through facial recognition. Or there could come a moment when no one uses PayPal anymore. PSD2 regulations made trust easier between customers and financially integrated digital businesses. It might not be long before PSD3 regulations enable an even greater number of businesses to bring the bank to their customers.
To capitalise on 2021, we need to pay attention to our audience’s attention – and create a customer journey that will keep carrying their custom to us when the moment comes. So while some elements of 2021 are unpredictable, it’s not unreasonable to predict that embedded banking could make the difference between those who are left behind and those who leap ahead.
Interested in becoming a financially integrated digital business? To our knowledge, Weavr is the only company offering an API-first bank account for businesses, along with easy to use tools to integrate banking with digital applications. We make the process easier, more affordable and faster than any other embedded banking solution. Get in touch with us to discover just how quickly you could be generating revenue and going to market.