Reaching a new audience always comes with new challenges, and the path to success can be even trickier if that audience has divergent payment preferences. RTW Retailwinds discussed its own experience launching two new e-Commerce brands during the Next Gen Payments & Credit: How Retailers Increase Sales & Attract Millennials With Financing Innovation session at the 2019 Retail Innovation Conference.
RTW Retailwinds, formerly New York & Company, is complementing its traditional banners with two new Millennial-focused brands: Uncommon Sense and Happy x Nature. The focus on a younger demographic means looking at non-traditional payment methods, according to Monika Tockstein, Senior Manager, PMO & QA at RTW Retailwinds. She listed several questions the retailer asked when deciding which payment methods should be accepted on these sites:
- What payments do I already take on my digital platform?
- What is on trend, and what payments are our target audience talking about?
- Is the cost of developing and testing the infrastructure for the new tender worth it?
Particularly when considering the last question, retailers should think long-term. While investing in a new payment system may not generate an immediate influx of new sales, it can show shoppers that their needs are understood.
“Sometimes my ROI on adding this new tender type might not be adding all these additional new sales,” said Tockstein. “However, it might be listening to the consumer because it’s on trend for them. Since I have brought that on as an option I’m in touch with them, and it’s going to pay off for us as an organization in the end, not immediately.”
A major benefit of adopting additional payment methods is increased flexibility. Younger consumers without credit cards may have access to alternate forms of tender, and platforms such as PayPal Credit offer financing options that can drive larger purchases. Accepting an array of payments can help every shopper make purchases on their preferred terms.
“I don't know if, from the consumer’s point of view, there's necessarily one digital wallet,” said Adam Blair, Editor at Retail TouchPoints. “I think it's more that people want a choice, and it's kind of a balance. From the retailer side, specifically e-Commerce retailers, almost two-thirds of them believe that providing financing options through their online store is important to driving new and increased sales.”
Another important factor is trust. When a shopper clicks through an Instagram post or browses the results of a search, seeing payment options they recognize is more likely to result in a purchase than seeing an unfamiliar button. Additionally, adding payment options increases the likelihood that the shopper already has an account with a major payment service, reducing friction at the point of sale.
“I can spend more, I see a brand that I trust, and I have more spending power,” said Dana Warren, Head of the Merchant Segment at PayPal Credit. “I'm more loyal and engaged, and there’s less pressure — I think those are some of the key elements.”