By: Pradeep Singh | Delivery Head, Middle East, BORN Group

In June of this year, football great Lionel Messi joined Inter Miami and Major League Soccer, America’s top league, giving American soccer a much-needed boost in terms of visibility and expanding Messi’s global fan base even further. And Messi’s sponsor, Adidas, was ecstatic. According to the New York Times: “Within a couple of days of Messi’s announcement, the company had received almost 500,000 requests from stores and suppliers for jerseys in Miami’s soft, electric pink.”

Messi was already world-famous, of course, but his example demonstrates how quickly demand for a product can explode – and the story of Messi’s jersey represents an opportunity for all kinds of online content providers. People see something – Messi’s jersey, one of Barbie’s outfits, or a piece of jewelry on a major movie star – and they want it. And if the opportunity is there, they will buy it.

The question becomes: How do you give them that opportunity?

Embedded Commerce for Selling Merch

One answer is embedded commerce. Note that I’m not talking here about social media marketing or social commerce, where you’re creating content designed explicitly to sell a product immediately or down the line. Instead, in embedded commerce, the product is part of the story but not the story itself or even the centerpiece of the story.

For example, many James Bond movies feature the titular character wearing an Omega Seamaster watch. It’s essential for Bond’s character to have a luxury watch, but the film isn’t about the watch. However, that watch becomes a powerful embedded commerce opportunity. Fans see it, think it’s cool, and some will want to buy it. Why not give them that opportunity then and there? (Product placement, where companies are willing to pay content creators to use their products as part of the story’s background, is the precursor to embedded commerce.)

Of course, an engaged potential consumer may pause the video, Google the product, and start the research and buying process. But why not make it easy for them?

It might work like this: The consumer sees the product and pauses the video by clicking directly on the watch on the screen. This could let the user save the video image to a personal directory for later shopping. Or, an embedded commerce system could include a back-end plug-in to automatically route that expression of interest to the watch company, a licensed dealer, or a marketplace of licensed dealers and take the viewer directly to a product detail page with an opportunity to buy. Embedded commerce offers new revenue opportunities to multiple value chain links, including the content creator, the streaming or online service provider, and, of course, the manufacturer and its intermediaries.

The possibilities are truly immense. You could use direct links to specific products, like the Omega Seamaster. Or you could offer similar products at a range of price points to target a broader range of potential customers.

Naturally, some content creators won’t want to dilute the power of their content offerings with advertising or e-commerce, and some brands may not eagerly embrace this kind of sales channel. But just as product placement is a well-accepted reality for all kinds of content, turning content into shoppable content may come to be equally acceptable for everything from the obvious – like impulse purchases for clothing, cosmetics, and accessories – to more substantial sales possibilities. I don’t think it’s unrealistic to think that embedded commerce could generate leads for big-ticket items like cars or vacation destinations.

Turning content into shoppable content requires a lot of upfront brand-related thinking and experience design. You’ll want to ensure that an embedded commerce strategy is appropriate to your brand experience as well as your go-to-market strategy. Embedded commerce also requires a lot of back-end technology, such as “you only look once” real-time object detection system, for example, with artificial intelligence-driven video analytics to address matching and mapping. Intelligent e-commerce/referral systems will be required to route requests to the proper jurisdiction or preferred suppliers.

When Messi joined Inter Miami, demand skyrocketed for his jersey. Imagine just how many jerseys Adidas might sell if they embraced an embedded commerce strategy in every match that streams online.

By: Caitlyn Shanahan | Sr. Visual Designer, BORN Group

Since ChatGPT was introduced in 2022, generative artificial intelligence (AI) has dominated the tech landscape and mainstream media with a mixture of hype (“AI will make everything better!”) and doom (“AI will take over the world and destroy society!”). As a designer, I’m particularly interested in the impact of AI on my livelihood. I’ve read a slew of articles, some claiming that AI will be the end of the designer and others assuring us that AI is just a passing trend. One article I found particularly compelling is Jasmine Oh’s “Yes, AI Will Replace Designers” piece that asserts “while AI will replace designers, it will replace the designers of today, not the designers of tomorrow.”

I want to be one of “the designers of tomorrow,” and I’m convinced that AI-powered design tools will help me get there. After looking into the possibilities of AI for product designers – and all kinds of creative work in all kinds of sectors – I’ve come to the conclusion that it’s time to embrace the burgeoning power of this technological revolution.

In other words: Don’t be afraid of AI – put it to work! Take advantage of AI’s ability to synthesize data and ideas and allow you to focus on the value you add as a creative, strategic thinker.

I’m sure we’ll see plenty more use cases for generative AI in the near future, but here are four ways I’m using AI now to streamline the product/visual design process:

1. Workshop Facilitation & Synthesis
2. User Research &  Persona Generation
3. Image Editing & Generation
4. Automated Content Creation

Accelerate the Workshop Process

How do we start the design process? With workshops that bring stakeholders together to define the problem, create a shared vision, and generate ideas for solutions. Whiteboarding tools such as Miro are often used to help facilitate workshops and brainstorming sessions. Miro recently launched the new AI-powered Miro Assist tool that makes workshop preparation, facilitation, and synthesis a whole lot easier. During a workshop, you can use Miro Assist to easily generate mind maps to help kick-start the brainstorming process. After the workshop, you can highlight groups of sticky notes, and Miro Assist will automatically summarize all the ideas and present them as text, images, and even presentations. These AI-powered tools can even help you prepare for follow-up workshops by analyzing previous workshop notes, activities, and outcomes to automatically populate new workshop templates with suggested agendas, user flows, storyboards, and even information architecture.

Digest User Research & Build Personas Much Faster

Understanding users is, of course, a key component of any product or experience design challenge. AI-powered tools like Dovetail are making it easier, and much, much faster, to transform unstructured and qualitative data – such as open-ended survey responses, user reviews, and support tickets – into actionable insights and comprehensive user personas. 

Dovetail uses natural language processing to automatically analyze unstructured data for sentiment analysis (are users satisfied? Or frustrated?). The tool applies topic modeling and clustering to detect common themes and trends in qualitative user feedback, enabling designers to generate insights and identify key pain points and opportunities. It can automatically segment users based on AI-driven insights into behaviors, attitudes, or demographics. Dovetail features an intelligent recommendation engine that aggregates user data and feedback to generate prioritized suggestions on product improvements and features. The solution also automatically generates interactive dashboards and charts to visualize synthesized user insights and metrics, making it easy for designers to spot trends and patterns.

Leveraging tools like Dovetail can significantly cut down the time it takes for designers to parse through data and derive accurate user personas, pain points, and goals. This robust AI-powered data analysis helps designers gain a deeper understanding of their user base, which leads to more informed product decisions, and ultimately better user experiences.

Automate Image Editing & Generation

Most designers are using, or at least exploring, AI-powered tools for photo editing. Adobe’s Firefly, for example, can significantly accelerate image generation, manipulation and refinement, which is a huge boost to designer productivity. My team uses Adobe’s Generative AI feature regularly to edit out unsightly elements, resize images to conform to existing templates, and create variations of images for review and approval. Edits that used to take our team an entire afternoon (and, sometimes, even days) can now be completed in less than an hour.

Adobe’s entire suite of AI tools (Firefly, Generative AI, and Sensei) can do far more than just photo editing. For example, using only simple text prompts, you can easily generate new color palettes, font treatments, icons, and illustrations. Leveraging these AI tools can help kick-start the creative process and provide designers with a jumping-off point instead of having to start from scratch each time. I am excited to continue my exploration of these tools and am confident that in the near future I will be able to leverage them to generate entire wireframes and page layouts.

Jumpstart the Writing Process

Designers often have to take on the role of copywriters, particularly in the early stages of a project. While ChatGPT is probably the most well-known natural language generation tool, I’ve been using Claude to help me create solid draft copy for wireframes and prototypes in my current project. By expediting the initial copywriting process, Claude lets me focus my efforts on more pressing design challenges.

Two examples demonstrate how useful Claude can be. I’ll ask the tool: “Give me 10 different ways to say ‘X’ in 100 characters or fewer.” Or I’ll paste a sentence in Claude and ask the chatbot to “give me 10 different ways to say ‘X’ without using the word ‘Y.’” While the Claude-generated copy will undoubtedly be edited, refined, and polished by a copywriter before the project goes to market, it saves me a lot of time and effort in the early stages of a project.

I’m also eager to explore a couple of more powerful options, including copy.ai and Jasper. Both leverage natural language generation to create new copy that conforms to style and brand guidelines and is SEO-friendly. These tools can also suggest new content for writers to revise and approve, automatically generate translations for global markets, and can build product-specific follow-up email sequences for marketing efforts.

So…will AI mean the end of the designer? I don’t think so, but I do believe that what we’ve seen to date in terms of AI and digital design is just the tip of the proverbial iceberg. I plan to embrace these emerging AI-powered design tools today,

 because I want to be one of the designers of tomorrow. I relish the fact that I am already spending less time on some of the less creative aspects of my work (I’m thinking of you, workshop prep!). Because of AI, I have more time and creative energy to focus on what our clients need as we work to create truly human-centered brand experiences.

For more information about design at BORN Group, please get in touch with us.

In the rapidly evolving landscape of ecommerce, leveraging first-party data has become paramount in delivering exceptional customer experiences. BORN XDS, as the leading ecommerce agency, is proud to announce our new capacity and service designed to help brands succeed by harnessing the power of customer data platforms (CDPs).

With BORN’s award-winning global expertise and experience in UI/UX and digital experiences, our team of industry leaders knows how to unlock the full potential of real-time, unified data activation and omnichannel customer journeys for leading ecommerce sites.   

At BORN XDS, we understand the negative impact that isolated and “siloed” data can have on the growth and success of a brand’s ecommerce experience. By utilizing a robust CDP to break down these silos, businesses gain a competitive edge via better-targeted marketing spending, increased consumer engagement, and elevated customer lifetime value (LTV). BORN’s technology experts are here to guide you in evaluating, implementing, and actively managing the right CDP that aligns with your unique business needs.

How Can CDP Functions Benefit Your Business?  

Unified Customer Profile: BORN XDS seamlessly consolidates all offline, online, and third-party data sources into a single view. This holistic approach provides an in-depth understanding of your customer’s interactions with your brand, regardless of where those interactions take place – website, in-store, app, email, customer service, or elsewhere. By having a clear picture of your audience, you can tailor your strategies to meet their diverse and evolving needs more effectively.

Personalized Customer Journeys: Our CDP services enable you to create coordinated omnichannel experiences for your customers with unparalleled precision. Each touchpoint becomes an opportunity to deliver the right message, through the right channel, at the right time. Meeting customers where they are is paramount in delivering a tailored customer experience. With personalized customer journeys, you’ll enhance customer satisfaction, foster loyalty, and drive conversions.

Marketing Optimization: Customer Data Platforms also optimize the ‘refinement loop’ for your marketing and promotional tactics via techniques like A/B testing and ‘‘next best action’ modeling. As an added layer of analysis, BORN XDS’s integrations leverage research databases to further enrich your CDP’s data to gain deeper customer insights. With data-driven optimization, you can maximize the effectiveness of your marketing efforts, enhance ROI, and make better informed strategic decisions.

Why Choose BORN XDS?

1. End-to-End Expertise: As an award-winning and globally recognized ecommerce agency, our team of leading professionals brings a wealth of knowledge and experience. With a proven track record of helping global brands succeed in the digital realm, we will provide expert guidance throughout your customer experience (CX) transformation journey – we will actualize your new CX vision, from planning to activation of CDP and beyond.

2. Tailored Solutions: We understand that every business is unique. With our platform-agnostic approach, BORN XDS takes the time to evaluate and understand your business objectives, challenges, and customer landscape. With this understanding, we tailor our CDP service solutions to align with your specific functional and technological requirements, ensuring optimal outcomes and tangible results.

3. Seamless Support: Our implementation process ensures a hassle-free transition to a CDP infrastructure. We provide comprehensive service at every stage, from initial evaluation, and full activation to management. BORN XDS maintains the highest status level of partnership or certification with many of our platform partners, ensuring we always have direct contact for support. With BORN XDS by your side, you can focus on your core business while we handle the technical complexities.

BORN XDS is committed to helping you transform your brand’s customer experience through the power of unified data and omnichannel journey orchestration. Schedule a meeting with our data scientist, Spencer Frum, to discover the boundless opportunities and improvements that await your customer experience.

Schedule a meeting with our Data Scientist, Spencer Frum, who is excited to show the possibilities of truly unified data and omnichannel journey orchestration.

Schedule a meeting here

Steeped in tradition, true luxury brands are admired for their dedication to incomparable quality and craftsmanship. They are leaders in white-glove customer service and bespoke shopping experiences. But to rise above the noise of today’s digital marketplace, they need to pair their rich heritage with the latest in digital innovation.      

According to Statista, an estimated 25% of global luxury goods sales will be made online by 2025. Today’s brands must keep up with the technologies and trends that customers have come to expect, from mobile-first web design to a frictionless checkout process. For high-quality – and high-priced – luxury goods, customers expect even more. Luxury brands must differentiate themselves by transforming the highly curated, ‘white-glove’ experience of their brick-and-mortar stores into immersive high-tech online brand experiences. 

Stewards of luxury brands need to understand the three core levels of ecommerce: user experience-driven eCommerce features, end-to-end bespoke customer experience, and brand storytelling.

These levels build on each other to create recognition, drive online sales, and provide the premium experience customers come back for again and again. By taking advantage of the three levels, innovative luxury brands can become leaders in the digital marketplace. The brands that rise above will be the ones that understand that the digital experience is part of the luxury. 

User experience-driven ecommerce features

Robust technology and user-friendly interfaces are the foundation of excellent ecommerce. For customers exploring and purchasing luxury goods, the experience must be seamless. Slow site speed and loading times, disjointed checkout flows, and awkward personalization can frustrate customers. Trust plummets and so do conversion rates. When implemented well, ecommerce platforms create an effortless and meaningful shopping experience. 

The best platforms include flexible and robust features. They enable seamless integration with analytics, data management, and the latest third-party tools – including future-forward technologies such as metaverse connectivity and virtual reality experiences. Coupled with highly customizable personalization features, a carefully designed ecommerce platform can provide the end-to-end white-glove service that complements the in-store luxury experience while seamlessly scaling to support growing product lines and global audiences.

The creation of high-quality online luxury experiences has helped to refine and advance the luxury brand industry online. For example, Fraser Hart is one of the UK’s leading jewelers, specializing in bespoke jewelry and unique, individualized ring customization services since 1936. They needed to reimagine their online digital presence, and in doing so, address several technical challenges: improving site speed and reporting processes; supporting their growing global audience; and capturing their unique product catalog across all devices.

Fraser Hart worked with BORN Group to determine the best digital solution and deliver a world-class customer experience across all Fraser Hart’s products and services. The new site enables a high-quality, unified digital experience across devices. It includes best-of-breed localization features that empower shoppers regardless of their region. Strengthening the connection between their digital and physical presence, the new platform also helps to centralize stock-level management between stores and improve internal merchandising. The design overhaul integrated many unique features of the platform to bring Fraser Hart’s mission of tailoring jewelry to the individual to life. The new design and underlying technology empower a level of personalization and merchandising that the brand had not seen before. Coupling BORN’s design prowess with an upgraded eCommerce platform, Fraser Hart’s new digital presence enabled its audience to experience the luxury of the brand outside of the store, converting and delighting more customers in this new digital space.

End-to-end bespoke customer experience

A strong digital platform enables a strong customer experience. For luxury brands, the customer experience is part of the luxury. Customers who expect white-glove, individualized customer service in physical stores expect the same in the digital space. From the customer’s first glance at the website to the post-purchase emails they receive, every interaction must delight and resonate with them. Customers expect that the messaging and services will cater to their needs and wants. 

A customer-centric, high-quality, end-to-end customer experience relies on a deep understanding of the audience. User data, research, and emotional intelligence — leveraged to evaluate, understand, and influence emotions — can help. This consumer knowledge helps brands deliver the right message, at the right time, through the appropriate channel. Brands can approach their audience in a way that resonates on a deeper level. This is particularly important for luxury brands, where emotions play a key role in purchasing high-quality, high-cost, or bespoke luxury goods. 

Engaging with an emotionally intelligent brand tailored to fit the customer’s needs makes them feel like they’re part of the experience, not just part of a transaction. For generations, the oldest clothing retailer in the United States, Brooks Brothers has been a timeless choice for shirting, suiting, and more. As the breadth and depth of their offerings evolved, they sought out ways for customers to see them as “far more than a store.” BORN overhauled Brooks Brothers’ ecommerce site, redesigning and customizing content to educate, guide, and engage users in the right place at the right time in the customer journey. Part of this work involved customizing the product detail page with “buy online, pick-up in-store” capabilities. This helped to create a more seamless experience between the digital and physical paths in the customer journey. For the shirt-buying experience, the team redesigned the product listing page with filters to direct customers to “their” perfect shirt, amplifying the individualized touchpoints throughout that purchasing flow. In addition, the team also focused on the loyalty rewards and redemption pages. The redesign aimed to inspire excitement, loyalty and repurchasing. BORN’s redesign of key touchpoints in the end-to-end customer experience helped to strengthen customer relationships with the brand and to encourage their return to the Brooks Brothers experience.  

Brand storytelling

Storytelling is the thread that ties the customer experience together. Marketing through storytelling is a powerful strategy to help luxury brands stand out in the flood of online retailers. With their heritage, history, and strong values, luxury brands have strong stories to tell. The key is to tell the brand story throughout the customer’s digital journey, by infusing every touchpoint with the brand’s voice. Successful brand storytelling can be used to build a community of customers who share similar values. Brand storytelling is a way to demonstrate values in an authentic way. Today, people prefer companies that have strong values that align with their own. Studies show that, if cost and quality are equal, more than 70% of customers prefer to buy from a purpose-driven company. The social issues that a luxury brand supports (such as sustainability and ethical resourcing) amplifies its values and brand story. While product and service quality are paramount to a luxury goods brand, it is their story that resonates with its audiences— it builds deep connections, encourages loyalty, and ultimately drives ongoing engagement.

Storytelling is a valuable part of a luxury brand’s digital presence – and the foundation of BORN’s approach to luxury brand design. Since 1860, Frette has produced linens and home furnishings of unparalleled quality, and this rich heritage forms the base of their story. Frette recently approached BORN for a complete site redesign and re-platform. BORN worked with Frette to gain a deep understanding of the nuances of the brand and its product offerings. Leveraging this knowledge with their expertise in the luxury space, BORN infused Frette’s brand essence and heritage throughout the site re-design. The new design integrated content-rich stories featuring designers and inspiring interiors, highlighting the brand’s values alongside customer-centric messaging. Updated content was designed to educate consumers on Frette’s craftmanship, product quality, ongoing innovations, and time-tested partnerships. The finished web design was a Platinum Winner at the dotCOMM Awards. Integrating brand storytelling throughout the end-to-end customer experience, BORN helped to position Frette as the global authority in fine handcrafted linens.

In the digital world of luxury brands, every digital experience touchpoint should bring surprise, delight, and a reaffirmation of the renowned and timeless quality of the brand. BORN’s digital-first approach combined with the richness of luxury brand storytelling helps bring the in-store experience online, seamlessly. With customized ecommerce implementations, end-to-end customer experience design, and brand storytelling, BORN helps luxury brands deliver luxurious digital experiences.  

Shopping is a highly emotional experience. Studies reveal that emotional impulses drive up to 95% of purchasing decisions.¹ The products and services we buy influence how we feel. As society emerges from the pandemic and online shopping continues to flourish, consumers desire a personalized shopping experience where they feel understood. In response, retailers must develop emotional intelligence to attract and retain customers. 

Emotional Intelligence Drives Sales

Emotional intelligence refers to evaluating, understanding, and controlling emotions. There is an immense payoff when companies connect with customers’ emotions. Customers who like the companies they do business with are more likely to continue to buy. Additionally, 78% of loyal customers recommend favorite brands and products to friends and family.² Therefore, retailers must develop emotional intelligence to create a retail experience that is in tune with the feelings of their customers. Harnessing the power of emotional intelligence gives retailers the ability to target customers at the right time, through the appropriate channel, and approach them in a way that resonates on a deeper level. 

Customer Experience is the New Battlefield

In today’s highly competitive market, conventional business wisdom is not enough to succeed. With countless online retail sites, it is increasingly difficult for brands to differentiate themselves. Creating an emotionally intelligent brand with an optimized website makes customers feel like part of the experience, not just part of a transaction. 

For customers, it is critical to feel prioritized by the brands they consume. Research shows that 86% of buyers will pay more for a great customer experience.³ This sentiment has increased the need for brands to take their marketing and websites to a new level by incorporating empathy and emotional intelligence into digital experiences and customer communications. 

Emotional Motivators

As eCommerce companies craft their websites, they must remember that customer purchases are inherently driven by emotional responses. A study by the Harvard Business Review studied customers’ interactions with hundreds of brands across all categories. It concluded that more than three hundred “emotional motivators” influence consumer behavior.⁴ Learning which emotional motivators lead to sales help brands strategically target the feelings that motivate customers to make purchases. These motivators provide retailers with valuable insights that can be applied when designing and improving a company’s products, services, and retail site. 

Broaden Customer Reach through Digital Channels

Brands must be accessible to their customers on the internet and through their smart devices in this digital age. Tech companies like Amazon, which offer a hassle-free experience and expedited shipping, have encouraged some consumers to skip in-person shopping altogether. To compete with the convenience of retail giants like Amazon, Retailers must focus their attention on developing emotionally intelligent websites to win over shoppers and drive sales. Data shows that 86% of customers with high emotional engagement want access to a brand through numerous channels.⁵ Brands must become both emotionally and digitally intelligent so customers return for the experience as well as the product. 

Multiple Payment Options Increase Sales

For a business to succeed, it is critical to offer easy and convenient ways for customers to pay. Providing customers with multiple payment options encourages sales. While credit cards are still the dominant online payment form, accepting alternative payment methods such as PayPal, debit cards, and cryptocurrencies maximizes sales. According to a study by PPRO 42% of consumers in the U.S. say they would not follow through with a purchase if their preferred payment method is not available.⁶ Retailers can also offer deferred payment through Buy now, pay later platforms that make purchases more achievable for some customers. Providing as many choices as possible allows customers to choose the way that works best for their needs at the time. 

Building Trust

There is a significant connection between trust and closing a sale. To build trust, retailers should include extensive contact information on their website, provide chatbots, FAQs, and call center phone numbers to answer customer questions, and display customer reviews prominently. Online consumers rely on reviews when making purchasing decisions. Studies show that 93% of customers read reviews before buying a product.⁷ Additionally, retailers should promise shoppers a safe and secure checkout that protects them from fraud. 

Incentive Programs

Customer loyalty is essential to growing a business. Repeat customers are extremely valuable to brands. Research shows that 70% of emotionally connected customers spend twice the amount when they are loyal to a brand.⁶ Retailers operating in markets with multiple competitors can set themselves apart from the competition by developing loyalty programs. Creating a customer loyalty program helps incentivize customers to become repeat customers by providing rewards for making repeated purchases. Discounts, rebates, rewards, free merchandise, and coupons motivate customers to spend more with brands and reinforce the consumer/brand connection. Focusing on loyalty programs helps brands align themselves with the segment of their customer base spending the most and deepens the relationship. 

Consumers are looking for digital retail stores to go the extra mile and cater to their needs. Approaching the customer experience with emotional intelligence is necessary to drive sales and win repeat customers. Personalizing sales techniques to fit customer needs, being transparent and helpful, and creating incentives to encourage customers to be part of a digital community will drive sales and lead to future purchases. Building websites that connect with the emotions of their customers will lead to a significant return on investment. 

Footnotes:

1)https://www.idslogic.com/blog/2017/11/using-emotional-intelligence-to-power-your-ecommerce-website.html

2)https://www.semrush.com/blog/word-of-mouth-stats/

3) https://www.forbes.com/sites/danielnewman/2020/06/23/4-actionable-customer-experience-statistics-for-2020/?sh=25c72d391a84

4)https://hbr.org/2015/11/the-new-science-of-customer-emotions

5) https://cxindex.com/company/blog/emotional-intelligence-the-key-ingredient-to-great-customer-experience/

6) https://www.volusion.com/blog/why-accepting-multiple-payment-methods-is-vital-for-ecommerce-success/

7) https://www.shopify.com/blog/15359677-why-online-store-owners-should-embrace-online-reviews

Airports are undergoing an evolution to improve the customer experience and generate profits. Realizing their potential to be more than just travel hubs, airports are exploring innovative ways to make guests feel safer, provide unique shopping experiences and make time in the terminal more meaningful. Imagine a space similar to a lounge or upscale shopping mall where travelers can relax, eat, drink and shop as they wait for their flights. Airports can provide a personal and stress-free experience through physical and virtual interaction based on passenger data. Deeper engagement made possible through digitalization and modernized infrastructure would allow airports to improve relationships with travelers.

Improving Airport Infrastructure 

The airport experience should be an enjoyable part of the journey rather than a processing station getting passengers to their destinations. Though many airports around the country are dated and offer limited shopping and dining options, there is a renewed focus on updating existing infrastructure as travelers return to airports following the COVID-19 pandemic. In 2021 the U.S. Department of Transportation released US$76 million in grants to upgrade airport infrastructure. Although the offerings apply to only three U.S. airports right now, these are just the first of a series of more than 1,500 grants that will infuse US$3.2 billion into hundreds of airports around the country.¹ Even without the grants, many cities are reimaging existing facilities to support an ever-growing number of travelers.

Focus On Health And Safety

In addition to improving airport facilities, lessons learned from the COVID-19 pandemic play a significant role in enhancing customer experience. Features such as automated passenger processing and touchless services have become increasingly popular. Passengers also desire a sense of space instead of overcrowded lines and limited seating. Airports, including Changi, are implementing bright colors, natural lighting, and large open spaces.³ With a focus on health, contactless TSA checkpoint entry and more open spaces have already begun changing the passenger experience.

Improving The Customer Journey With Data 

Airports can provide a more enjoyable customer experience by better understanding the movement of passengers through their airport journey. Data from WiFi, cameras, people counters and other data sources provides real-time information about movement, occupancy and standing time in various airport areas.² These insights can help airports optimize staff schedules, reduce waiting times, reduce stress and encourage spending in retail locations. Additionally, data collected from guest WiFi networks enables targeted marketing from nearby retailers to be sent directly to passengers for an increased chance of making a sale.

Business Opportunities In Travel Retail

Modern airports recognize the critical economic role of travel retail for growth and development. They have the advantage of a captive audience looking for ways to pass the time. Airports offer brands an opportunity to maximize visibility and customer engagement. While most retail has shifted transactions and fulfillment online, physical airport storefronts can provide strong customer interaction.³ These retail spaces can display products and engage with customers in meaningful ways to aid in conversion and retention. By creating personalized and unique experiences, brands can expect further engagement and sales after customers leave the airport. 

Aligning Luxury With Everyday Products

Airports are undergoing renovations by designing footpaths and atriums to maximize exposure to retailers. Mass-market and luxury retailers are now joining popular duty-free stores, newsstands and gift shops. High-end luxury retailers see airport storefronts as a way to market their products to international audiences and generate more sales. According to Allied Market research, airport retail sales are expected to top US$40 billion by 2027, with perfume and cosmetics leading the way, then wine and spirits following.⁴ Luxury retailers have a massive potential for profit by opening shops within airports and targeting travelers who are shopping to pass the time.

Technology And Automation

Nowadays, most brands generate sales through digital marketplaces, and it’s the same for airport retail. However, airport storefronts benefit most from digital marketplaces that enable remote ordering and automated check-out. Currently, retail giant Hudson Group is testing Amazon’s Just Walk Out technology in select locations. These Hudson locations allow customers to tap a credit card on entry, pick out items, and exit, all while avoiding check-out lines.⁵ Automating the process allows for easy transactions and reduced labor costs. However, retailers must have a robust digital marketplace to handle all transactions. During the 2020 Black Friday holiday, customers spent US$160 million shopping on digital marketplaces powered by Mirakl, which maintained 100% uptime, showing the importance of having strong technology as demand increases.⁷ It’s also about using a combination of technology that gives retailers an edge. Other providers, including FetchyFox, offer intuitive digital marketplaces that enable speedy contactless shopping and features artificial intelligence (A.I.) for data collection.⁶ Using a digital marketplace with automation and data capabilities will help airport retailers keep up with demand and modernize their business strategy.

The Future Is Now

Airports worldwide are starting to elevate the travel experience. As COVID-19 fears are dissipating, passengers are eager to travel, and airports are busier than ever. Government funding is being used for improving infrastructure and health safety. Passengers want fewer crowds and more open spaces to relax while waiting for departures. They also want to shop, and the time-honored tradition of duty-free isn’t going away. In fact, airport retail is growing faster than ever and now includes high-end luxury brands. However, the traditional storefront is changing, and customers can now shop from digital marketplaces that offer more options, automation and no lines. This is the time for airports and consumer brands to join forces to create an unbelievable experience for everyone.

Footnotes

1)https://www.travelagewest.com/Industry-Insight/Business-Features/New-Airport-Upgrades-Will-Change-the-Air-Travel-Experience

2)https://skyfii.io/blog/how-data-can-help-convert-an-airport-passenger-into-a-retail-customer/

3)https://www.moodiedavittreport.com/sense-of-space-reimagining-the-airport-retail-experience-for-the-new-world/

4)https://www.barrons.com/amp/articles/a-luxury-retail-revival-at-airports-around-the-world-01628279303

5)https://www.businesswire.com/news/home/20210608005195/en/Hudson-Nonstop-Arriveshttps://skyfii.io/blog/how-data-can-help-convert-an-airport-passenger-into-a-retail-customer/-In-Chicago-Using-Amazon’s-Just-Walk-Out-Technology

6) https://www.fetchyfox.com/

7)https://blog.mirakl.com/mirakl-achieves-record-gmv-growth-extends-sizable-lead-in-the-enterprise-marketplace-category-in-2020

We continue our exploration of the current and future shape of retail around the globe as brands commence the lengthy road of recovery for some and normality for most.

What will the new retail landscape look like? Now that the wide scale lockdowns are mostly over, supply chain issues and staffing woes still abound, hampering a return to retail as we knew it. How will brands adapt to these new consumer behaviors and are they here to stay? Read on.

Physical Stores Still Have Their Place

Despite the normalization of online shopping and home delivery during lockdown, many consumers were counting the days before they could walk through the doors of physical stores again. Tomorrow’s retailers still need to win hearts and minds in the real world and shouldn’t give up all their store space just yet. 

One of the reasons for this might be just how much people love browsing. Shopping online tends to be goal-based and transactional, but people browse in-person not only because they need something, but because they enjoy it. A study by Michael Guiry,¹ Associate Professor of Marketing at West Chester University of Pennsylvania, suggests that for some of us shopping forms part of our self-concept, cementing, and playing back, our ideas of who we are. Although customers appreciate the best efforts of online retailers in creating browsing journeys, they are still only a facsimile, lacking in the excitement and sensory details that are so much part of the experience in real life. 

For all the news headlines on the rise and rise of online shopping, most retail is still taking place in physical spaces. In the US, by February 2021 it had settled at around 15% of sales.² And although many retailers have closed branches and reduced shoppable space they’re unlikely to get rid of it completely. The digital and physical stores of the future will have a symbiotic relationship, with digital driving footfall to physical stores that support online sales.

A Future Of Experiential Retail

Real-life shopping at its best isn’t just about making a transaction, it’s about entertainment, about entering a different space and socializing with friends, family, and community. Physical retailers can offer many of the things we’ve all missed during the pandemic: the excitement of new discoveries, human connections, personal service, sensory moments. These experiential retail experiences, powered by new technologies, will be center stage in the next couple of years as retailers try to tempt consumers back, and with footfall likely to be reduced, they will be looking to squeeze every drop of value out of the customers who come through the door. 

For example, Nike, always ahead in experiential experiences, have launched Nike Rise in Guangzhou, China and in Seoul, South Korea: technology-driven retail hubs that work with the Nike App to create experiences powered by customer data.³ Dick’s Sporting Goods in the US opened its biggest-ever store in the spring of 2021 in a bid to drive deeper engagement with customers. The ‘House of Sport’ site in Victor, New York includes an indoor rock-climbing wall, golf driving bays and a putting green, as well as a health and wellness shop and a track and turf field.⁴ 

In London, with the pandemic still on everyone’s minds, Lush’s redesign of its Oxford Street store includes tech innovations imported from its Shinjuku store, with QR codes and video displays creating an interactive experience that doesn’t have to be hands-on – no mean feat for a cosmetics retailer.⁵ Meanwhile, shopping mall Westfield London is launching Situ Live, a ‘discovery playhouse’ where customers can try out new products.⁶

In the post-Covid world, retailers will be looking to use technology to examine footfall, drive sales and create new customer experiences. LiDAR technology uses infrared light to sense movement, meaning that retailers can measure footfall and dwell time as well as analyzing the success of visual merchandising and customer engagement, tracking individuals with no loss of privacy as only an outline is ever recorded. Simultaneous Localization and Mapping (SLAM) technology can help anyone with a smartphone navigate around a mall, but it can also be utilized by furniture retailers. IKEA’s newly revamped IKEA Studio app not only enables the user to see a chosen piece of furniture in situ in their home, it allows them to redesign the entire room.⁷ In-store QR codes can provide product information, special deals or an easy way to buy online in a bid to lessen the practice of ‘showrooming’, i.e. looking at goods in physical stores before buying them at a lower price from an online competitor. 

Local Shopping For Local People

Repeated lockdowns and the shift towards home working has meant a new focus on shopping locally. In the UK the number of independent stores grew in the first half of 2021 for the first time since 2017,⁸ able to take advantage of government support measures, such as business rates relief and furlough schemes, as well as deals on rent offered by landlords keen to fill spaces vacated by failing chain stores.

There’s an opportunity for local main streets to evolve to serve new needs: a return to the times before out-of-town malls and retail parks. Even before the pandemic, city planners across the world including Paris, Barcelona, Portland, and Melbourne were responding to climate change by encouraging ‘15-minute cities’, creating blocks where people can access all their everyday services within a short walk or bike ride, reducing traffic and pollution and creating more space for trees.⁹

Larger chain retailers are already responding to new patterns of hybrid working. In the UK Sainsbury’s has recently announced a new partnership with Itsu, Leon and Wasabi, trialling ‘lunch stands’ across 300 stores, aimed at consumers working from home or in the office. Sainsbury’s Food for Later category planner Frances Hughes said: “As a hybrid style of working becomes more normal, we’ve been working hard to analyze customer needs when it comes to their lunchtime meals…the introduction of the in-aisle lunch stand makes it easily accessible for anyone to pick up an affordable and balanced meal, no matter what your daily ritual is.”¹⁰

Downtown Areas Need New Purpose

Downtown areas that were once busy with office workers are significantly quieter since the pandemic. In the future they will need to find new reasons to attract visitors and fill space, with shops, grocery stores and restaurants alongside medical centers, community, leisure, housing and workspace. 

There needs to be a greater emphasis on flexibility and sharing, finding purpose for underused spaces, and providing the amenities that communities need, supporting small businesses, creatives and social enterprises who might otherwise find it impossible to have a physical presence. And it’s the perfect time for experimentation, finding out what works as we move into our post-pandemic future. In some ways the lasting effects of Covid could give a new lease of life to physical retail locations that had been declining over the years. 

But it’s not just down to stores and other businesses to create the successful downtown shopping areas and main streets of the future. Governments and landlords will need to work with them to create areas suited to local communities and their changing needs. They also need to relook at rates and rent models that have decimated businesses unable to operate during lockdown. The alternative is yet more businesses going under, boarded-up shops and the hollowing out of retail areas. Some landlords have already offered their retail tenants turnover-based rents in a bid to save main streets. In the UK, the government are under pressure from within their own party to reform business rates, and the opposition Labour party has already announced their wish to scrap them in favor of a new system that increases the digital services tax on tech giants.¹¹

Footnotes

1. Defining And Measuring Recreational Shopper Identity, SpringerLink, https://link.springer.com/article/10.1177/0092070305282042

2. State Of Retail, National Retail Federation, https://nrf.com/topics/economy/state-retail

3. Nike’s Latest Retail Concept Powered By The Pulse Of Sport, Nike News, https://news.nike.com/news/nike-rise-retail-concept

4. Dick’s Sporting Goods Just Opened A Massive Store With A Virtual Driving Range And Outdoor Track. Here’s A Look Inside, CNBC, https://www.cnbc.com/2021/04/09/dicks-sporting-goods-new-store-has-a-driving-range-and-outdoor-track.html

5. In Pictures: Lush Oxford Street Reopens With Innovative Global Concepts, The Industry.Fashion, https://www.theindustry.fashion/in-pictures-lush-oxford-street-re-opens-with-innovative-global-concepts/

6. “It’s Not A Store, It’s A Venue”: How Situ Live is Transforming The Way We Shop, Charged Retail Tech News, https://www.chargedretail.co.uk/2021/05/19/its-not-a-store-its-a-venue-how-situ-live-is-transforming-the-way-we-shop/

7. IKEA’s Fancy New App Lets You Design Entire Rooms, Wired, https://www.wired.co.uk/article/ikea-studio-ar-app

8. Independent Retail Sector Returns To Growth, Drapers, https://www.drapersonline.com/news/independent-stores-benefit-from-chain-closures

9. The 15-Minute City – No Cars Required – Is Urban Planning’s New Utopia, Bloomberg, https://www.bloomberg.com/news/features/2020-11-12/paris-s-15-minute-city-could-be-coming-to-an-urban-area-near-you

10. Sainsbury’s Launches News In-Aisle Concept With Over 20 Lunch Meals, The Grocer, https://www.thegrocer.co.uk/sainsburys/sainsburys-launches-new-in-aisle-concept-with-over-20-lunch-meals/660142.article

11. As Macy’s and Sephora Flee the Mall, Will Other Retailers Follow?, The Motley Fool, https://www.fool.com/investing/2020/02/13/as-macys-and-sephora-flee-the-mall-will-other-reta.aspx

Towards the end of October 2021 Facebook announced big news: the corporate business was changing its name to Meta, while Facebook the social media platform would remain. 

Mark Zuckerberg has solid reasons for the rebrand. The company needed a broader title, now that it also includes Instagram, Whatsapp and Oculus VR as well as mobile web analytics company Onavo, and Messenger precursor Beluga. Meta reflects a new focus on the metaverse and demonstrates the ambition to lead the way in this future digital realm. As an aside, it’s also worth noting that Facebook the social media site is more popular than ever, but it’s not attracting young people like it used to. A shrewd operator like Zuckerberg knows that it’s better to shift focus when a successful product is at its peak rather than on the decline.

All of this makes sense. First imagined in a 1990s sci-fi novel and conjured up in movies from Total Recall to Wreck-It Ralph, the future metaverse is an exhilarating concept, a place of boundless possibilities and experiences. Zuckerberg wants his company to be its guiding light. Yet many people are sceptical. Was this really the deciding factor for the name change, or was it to distance the business from negative press? 

Trust in Facebook was already low after testimony from whistle-blower Frances Haugen hit the press, telling of polarizing algorithms, understaffing in key areas concerned with safety and a culture that ignored known problems. The rebrand hasn’t helped its cause. A survey by SightX reported that 37.5% of respondents did not believe the name change would bring any real changes to the organization. Many believe it was because of poor public perception, rather than to better fit the company’s future goals and vision. Still, 2022 is a new year and as people start to see the metaverse taking shape they may be more accepting of the reasons behind the rebrand. 

The good, the bad, and the need for regulation

Like Coca-Cola, Facebook the platform is nigh-on universal; open to anyone with internet access. Most of us have been Facebook users at one time or another and have had largely positive experiences. We’ve enjoyed its window into the lives of friends, family and colleagues, the way it has re-connected us with those we had lost touch with and enabled groups of people from all over the world to create communities around niche interests. But there’s no ignoring the bad stuff.

That bad stuff has been coming from all angles. Privacy and a lack of transparency over user data is one issue; the company’s low tax contributions is another. Cloning competitor apps like TikTok (Instagram Reels), and Snapchat (Facebook Stories), has also attracted criticism. Content moderators brought a lawsuit after reporting poor working conditions and post-traumatic stress disorder; some have now been compensated for their experiences. 

But the biggest concerns are to do with the disconnect between Facebook’s mission statement of bringing the world closer together, and the real-world damage caused to individuals, minority groups and sometimes entire nations because the business hasn’t done enough to take down and prevent the spread of fake news and harmful content.

A Wall Street Journal investigation found that changes to Facebook’s content algorithm stoked division and did not do enough to reduce Covid 19 vaccine hesitancy. In addition, Instagram was harming the mental health of teenage girls. UK natural beauty company Lush recently took the radical step of quitting Facebook and Instagram alongside Snapchat and TikTok, citing the negative impact the social media sites have on young people’s mental health.

Comments made by ex-members of Facebook staff together with the company’s own leaked research and that of many other organizations also suggest that not enough is being done to deal with misinformation and malign content. Former Facebook executive Chamath Palihapitiya didn’t pull any punches about the seriousness of the issue, saying ‘We have created tools that are ripping apart the social fabric of how society works’. 

Meta/Facebook stress that they make robust efforts to deal with negative content. The company has just announced the development of a new AI which is quick to ‘learn’ to spot harmful content, rather than taking months of training. 

However, the company has been criticised for placing too much emphasis on reacting to problems and not enough on preventing them. So far, AI does not seem to have been able to spot harmful content before the damage is done. Is it possible to do enough? And how can they be confident about policing behaviour in the future metaverse, with its billions of tiny interactions in every moment? We just don’t know the answers yet. 

Meta’s Horizon Worlds platform may provide a clue as to how moderation of the metaverse might work. Users in this colorful virtual space can report harmful behavior and send recorded data from their device as evidence. They can also activate a ‘safe zone’, a personal space where they can take time out and mute, block, or report users if necessary. Users can be suspended or permanently excluded if they are found to be breaking the rules. Community Guides with their own avatars inhabit the space and keep an eye on things. It’s a mostly reactive rather than preventative approach, but then it’s hard to see how prevention could work. Though some warning signs can be noted, we can’t – yet – predict crime in the way shown in Minority Report.

People might just have to accept that a future virtual world, like social media, reflects society and so will never be perfect. Techdirt editor Mike Masnick put it like this: content moderation is impossible to do well at scale, because in a situation where there are billions of interactions, even if 99.9% of content decisions are ‘right’, the 1% of ‘wrong’ decisions could still represent thousands of negative experience. It will be up to individuals to decide how much time they want to spend in the metaverse and, to a degree, how to keep themselves safe.  

But more regulation will be needed. Businesses exist to make money; it’s governments who must take charge of putting in measures for the sake of the public good. Future metaverse users will be under constant surveillance. VR headsets will be tracking what users see, hear, feel and how they react, both physically and mentally. This puts current concerns about how much Google and Facebook/Meta know about us in the shade. In the metaverse, users could be subject to a constant deluge of exceptionally nuanced marketing that taps directly into the emotions felt during virtual experiences. It needs regulation to ensure that users can control who their data is shared with and always know when they are being marketed to, whether they’re watching a video or talking to an avatar. Somehow, limits for manipulation, whether political or commercial, need to be set, so that people are free to enjoy the metaverse without fear of exploitation. 

The metaverse must be built

The consensus is that the Metaverse should be built by communities, rather than by one corporate entity with a guiding hand at best, or ultimate power at worst. Even Zuckerberg seems to agree, stating in his Meta Founder’s Letter that ‘The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies’. Though it’s hard to see Facebook’s name change to Meta as anything other than an attempt to ‘own’ the space. 

Just in 2021, Meta spent $10 billion developing metaverse technologies. The company is creating 10,000 jobs in the EU as part of its growth program. It recently invested more than $50 million in non-profit groups to help ‘build the metaverse responsibly’. Other major players turning their attention to the metaverse are Epic Games, creator of Fortnite, Pokémon Go developer Niantic, graphics technology company Nvidia, blockchain-based virtual world Decentraland, Microsoft, and Apple. 

Meanwhile Elon Musk believes that his own Neuralink brain interface products will eventually offer a better way to experience virtual reality than spending much of the day trying to move around in a VR headset.

So, the issues of the future metaverse, the problems around trust, privacy, transparency, manipulation, and possible harassment are not just Meta’s to solve. All the more reason why it’s important that government regulations keep up with the technology. 

The metaverse will transform our lives. It could enrich our day-to-day experiences, and even reduce our environmental impact by allowing us to be ‘present’ in the office, ‘attend’ concerts hundreds of miles away, and ‘travel’ to see the world’s sites without ever leaving our homes. 

Like the internet in general, and social media in particular, the metaverse will hold a mirror up to our world. There’s extraordinary potential for good, and equally for bad. Meta and others cannot just go through the motions. To create trust, companies need to demonstrate that they are truly doing all they can to keep users safe. 

Above all, metaverse businesses and governments must work together to build the metaverse we want – a creative, inspiring space worthy of exploration, a place where we feel safe and protected, but have the freedom to make up our own minds. 

1. Founder’s Letter, 2021, Meta, https://about.fb.com/news/2021/10/founders-letter/

2. Facebook Wants To Attract Young People, But Gen Z Teens Say It’s A ‘Boomer Social Network’ Made For ‘Old People’, Insider, https://www.insider.com/facebook-gen-z-teens-boomer-social-network-leaks-2021-10

3. This 29-Year-Old Book Predicted The ‘Metaverse’ — And Some Of Facebook’s Plans Are Eerily Similar, CNBC, https://www.cnbc.com/2021/11/03/how-the-1992-sci-fi-novel-snow-crash-predicted-facebooks-metaverse.html

4. Facebook Whistleblower Hearing: Frances Haugen Calls For More Regulation Of Tech Giant – As It Happened, The Guardian, https://www.theguardian.com/technology/live/2021/oct/05/facebook-hearing-whistleblower-frances-haugen-testifies-us-senate-latest-news

5. Facebook’s Name Change Receives Poor Marks In New Poll, Forbes, https://www.forbes.com/sites/edwardsegal/2021/10/29/facebooks-name-change-receives-poor-marks-in-new-poll/?sh=30c5c49a444b

6. Facebook Will Pay $52 Million In Settlement With Moderators Who Developed PTSD On The Job, The Verge, https://www.theverge.com/2020/5/12/21255870/facebook-content-moderator-settlement-scola-ptsd-mental-health

7. The Facebook Files: A Wall Street Journal Investigation, https://www.wsj.com/articles/the-facebook-files-11631713039

8. ‘I’m Happy To Lose £10m By Quitting Facebook,’ Says Lush Boss, The Guardian, https://www.theguardian.com/business/2021/nov/26/im-happy-to-lose-10m-by-quitting-facebook-says-lush-boss

9. Ex-Facebook Executive Chamath Palihapitiya: Social Media Is ‘Ripping Apart’ Society CNBC (via YouTube), https://www.youtube.com/watch?v=MakEIlvlyfE

10. Our New AI System to Help Tackle Harmful Content, Facebook/Meta, https://about.fb.com/news/2021/12/metas-new-ai-system-tackles-harmful-content/

11. Horizon Community, Oculus, https://www.oculus.com/facebook-horizon/community

12. Masnick’s Impossibility Theorem: Content Moderation At Scale Is Impossible To Do Well, Techdirt, https://www.techdirt.com/articles/20191111/23032743367/masnicks-impossibility-theorem-content-moderation-scale-is-impossible-to-do-well.shtml

13. Founder’s Letter, 2021, Meta, https://about.fb.com/news/2021/10/founders-letter/

14. Facebook Says It Expects Its Investment In The Metaverse To Reduce Its Profits By ‘Approximately $10 billion’ This Year, Insider, https://www.businessinsider.com/facebook-metaverse-investment-reduce-profits-by-10-billion-2021-10

15. Investing in European Talent to Help Build the Metaverse, Facebook/Meta, https://about.fb.com/news/2021/10/creating-jobs-europe-metaverse/

16. Building the Metaverse Responsibly, Facebook/Meta, https://about.fb.com/news/2021/09/building-the-metaverse-responsibly/

17. Breakthrough Technology For The Brain, Neuralink, https://neuralink.com/

Elon Musk Sits Down With The Babylon Bee, The Babylon Bee (via YouTube) https://www.youtube.com/watch?v=BaRKd4U6Ixg

As the popularity of online shopping continues, buy now, pay later (BNPL) platforms are becoming a popular way for businesses to offer their customers flexible payment options. Though larger companies traditionally used this service, BNPL is becoming increasingly popular with companies of all sizes.¹ Providers like Klarna, Affirm, and Afterpay enable shoppers to purchase products online from participating merchants and pay for them through a series of installments, often interest-free.² This app-based hybrid version of layaway and credit is growing in popularity with retailers and consumers alike as brands like Amazon, Walmart, and Target offer installment plans to increase sales.

Buy Now, Pay Later is Gaining Momentum 

The continued growth of online shopping resulting from the pandemic has catapulted BNPL into the mainstream. While BNPL was gaining popularity leading up to the pandemic, BNPL deals exploded when retailers were forced to close brick and mortar stores. Covid-19 produced a shift in consumer spending habits as an increased number of consumers spent more time at home and embraced e-commerce.³ BNPL generated almost $100 billion in transactions in 2020 as millions of shoppers financed their purchases.⁴ The pandemic left millions of consumers out of work and in need of greater flexibility with their purchases, which increased the demand for easy online financing options. Unlike credit cards which were intended to be used multiple times, BNPL solutions are applied to individual transactions, which appeals to consumers wanting to make less of a financial commitment.

Advantages for Consumers

Consumers are more likely to make significant purchases if they can pay for them in installments rather than the total price upfront. Popular among people under thirty with tight finances and less available credit, consumers welcomed the ability to delay payment for goods and access financing.⁵ Many consumers see BNPL as an appealing alternative to racking up another high credit card balance. BNPL services claim they are a better alternative to traditional banking and credit cards because it is easy for consumers to get approved for this type of loan, even with a low credit score.⁶ Provided consumers stick to the payment terms, BNPL offers the chance to pay in interest-free installments. Though BNLP offers many advantages to all parties involved, consumers should ensure they understand the repayment terms. Late payments have the potential to affect an individual’s credit score, and customers who default on their payments may be banned from future purchases.⁷ BNPL is a loan, and consumers should plan their purchases with their income and expected expenditure in mind. 

Advantages to eCommerce

Just as BNPL is a preferred payment method for many consumers, it can also be useful for businesses. By integrating BNPL, companies can attract new shoppers, improve customer relations, and increase sales. It is important to provide many different payment options to give customers their preferred choices and appeal to as many potential first-time shoppers as possible.⁸ Consumers increasingly utilize BNPL platforms, which means companies willing to work with BNPL providers will appeal to a new set of customers. Millennials and Gen Z are more likely to use BNPL platforms when shopping online than any other age group, so if a business is interested in attracting these age groups, they should strongly consider using a BNPL platform.⁹ Additionally, customers are more likely to return to a business that offers BNPL options, and with so many companies providing this service, it is essential to remain competitive. 

BNPL delivers a quick and straightforward payment process and is a viable alternative to traditional payment methods. BNPL platforms allow a business to get paid in full immediately, while the consumer has the instant gratification of receiving the product directly at a low upfront cost. In exchange for providing interest-free loans to customers, these platforms take only around 5%-6% of the purchase cost from retailers.¹⁰ If the customer does not make the payment on time or the payment is not collected, businesses do not have to worry about lost revenue. 

Why Buy now, pay later platforms can be a valuable tool for both businesses and consumers. The potential for BNPL platforms to drive sales and increase income with no risk to the company is an appealing prospect, and customer demand for this payment method is high. While consumers must be mindful of their purchases and not spend beyond their means, BNPL can be a great way to finance items if used responsibly. With research from Kaleido Intelligence estimating that online consumers will double the amount of money they spend using BNPL to $680 billion by 2025, there is a massive opportunity for businesses to profit.¹¹ BNPL is here to stay for the foreseeable future.

Footnotes

1) https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

2)https://www.wsj.com/articles/when-to-buy-now-pay-later-and-when-to-just-pay-now-11631957401

3)https://www.cnbc.com/2021/09/21/how-buy-now-pay-later-became-a-100-billion-industry.html?utm_term=Autofeed&utm_medium=Social&utm_content=Tech&utm_source=Facebook#Echobox=1636972847

4)https://www.forbes.com/sites/ronshevlin/2021/09/07/buy-now-pay-later-the-new-payments-trend-generating-100-billion-in-sales/

5) https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

6)  https://www.investopedia.com/buy-now-pay-later-5182291

7)https://www.wsj.com/articles/when-to-buy-now-pay-later-and-when-to-just-pay-now-11631957401

8)https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

9)​​https://www.cnbc.com/2021/08/07/why-millennials-and-gen-zs-are-jumping-on-the-buy-now-pay-later-trend.html

10)https://gocardless.com/en-au/guides/posts/how-does-buy-now-pay-later-affect-your-business/

11)https://www.businesswire.com/news/home/20200922005066/en/Buy-Now-Pay-Later-Digital-Spend-Led-by-Klarna-PayPal-Afterpay-to-Double-by-2025-Reaching-680-Billion—Kaleido-Intelligence