Four tech trends that will define retail, mobile payments, loyalty marketing and the customer experience in 2019

| December 12, 2018 | By

The high street can be saved, how mobile payments will be driven, the rise of data-led loyalty schemes and the increase in customer segmentation. Check out Yoyo’s predictions on which tech trends will have the biggest impact on retail in 2019.

Four trends that will define retail, mobile payments, loyalty marketing and the customer experience in 2019

1. The high street can be saved


2018 was the toughest year for the high street to date. The consumer shift towards digital shopping experiences has, of course, had a dramatic impact – with online retail growing annually by a massive 10%, according to the BRC. However, the government’s failure to reform a broken business rates tax system has significantly contributed towards the creation of this “perfect storm”.

In this environment, 3,000 stores are expected to have closed by the end of 2018 and we’re bound to witness more casualties throughout 2019 – but the high street certainly isn’t finished if the right steps are taken.

As part of the fight back, we’re seeing the spread of technology that identifies and segments in-store purchasing behavior and preference data – and several high street brands, including John Lewis, Waitrose, Starbucks, Dunkin Donuts, Caffe Nero, easyCoffee and Patisserie Valerie (to name but a few) have been delivering new and innovative personalised offerings through transformative digital experiences in 2018.

Utilizing this data to deliver seamless, rewarding and measurable experiences that betters the daily lives of customers is fast becoming the norm and will become a demand rather than a nice-to-have in 2019.

The government could match this tech-led response in 2019 by getting rid of business rates for high street retailers and replacing it with something that puts them on a more even tax footing with their online competitors. Sadly, I wouldn’t hold my breath on this one.

2. Mobile payments will no longer be driven by the phone manufacturers


Popularity around mobile payments has increased throughout 2018, but unlike China, where volume totalled US$13 trillion last year, adoption is still proving to be a slow burning candle in the west.

In fairness, much of this success in China is due to its unregulated financial environment, where the likes of WeChat and Alibaba have been able to leapfrog the banks, as well as the Visas, Mastercards or UnionPays of this world – a unique set of circumstances that can’t be replicated in the US or Europe.

So far, mobile payments have primarily been driven by the phone manufacturers in the west, but compare Samsung Pay, Google Pay or Apple Pay adoption with the user base of their respective smartphones, and the numbers remain tiny.

Why is this? Well, the likes of Apple Pay, Google Pay and Samsung Pay have still yet to add any real value to the overall payments experience – none of us can really see the difference between tapping a contactless card or using a smartphone at the point-of-sale.

But take a look at services that have successfully added real value to the mobile payments experience and you see a different story.

This year, eMarketer predicted that 23.4 million people in the US will have used the Starbucks payments and loyalty app to make a point-of-sale purchase by the end of 2018, placing it ahead of 22 million Apple Pay users, 11.1 million Google Pay users and 9.9 Samsung Pay users.

According to the marketing research firm, “not a single one of the biggest mobile payment platforms is bigger than coffee, in terms of user base”. And TechCrunch has gone on to say that one of the major reasons why there’s been such high user adoption of the retailer-specific Starbucks app is because “payments are tied to loyalty”.

TechCrunch’s view backs up our own findings. Environments where Yoyo’s combined mobile payments and loyalty experience is accepted are averaging anywhere between 15% and 25% share of payment volume in the first 12 months. In these same environments, Samsung Pay and Apple Pay usage hss long remained at less than one percent.

So going into 2019, any increases in mobile payment adoption will not be driven by the phone manufacturers. Instead our digital devices will be used by tech-savvy retailers and banks to embed data-driven technologies that can provide that crucial added value to mobile payments, whether its an in-store, e-commerce or banking experience.

3. Data-led loyalty schemes are on the rise


In 2018, we’ve seen several big name brands re-focus their attention on the value of customer loyalty, as retail looks to fight back against dwindling footfall.

Following their rebrand John Lewis and Waitrose announced plans to merge their loyalty offering, Pizza Hut launched a completely new app-based loyalty scheme, Costa Coffee extended its Coffee Club loyalty programme to Costa Express machines and launched a reusable cup with a built in payment chip, and across the pond Dunkin Donuts said it was investing $100m in “next-gen stores”, with a distinct focus on its 8 million-strong app-led DD Perks Loyalty Programme.

And after admitting that its old loyalty scheme was too confusing, M&S plans to “restart Sparks properly”, according to chief executive Steve Rowe, and will place customer behaviour data at the centre of its new loyalty strategy.

In the same year, research found that the Starbucks payments and loyalty app had more users than Apple Pay in the US, and the Caffè Nero app was already taking more than 10% share of checkout in the UK just a year after launch.

The trend continues as we move into 2019, with easyCoffee and Patisserie Valerie both announcing that they’ve partnered with Yoyo to deliver a combined mobile payments and loyalty app experience to their customers.

It sounds simple, but retail loyalty schemes exist to deliver experiences and rewards to customers so that they return to spend another day. With brick and mortar retail as it is, achieving this now requires three things – technology, data and a seamless payment experience (the same three reasons why Amazon is winning online). Expect to see many more retailers follow the example of M&S, easyCoffee, Dunkin Donuts and Patisserie Valerie in 2019.

4. Behaviour-led customer segmentation will dominate loyalty marketing


Whether a shopping outlet, a canteen, a coffee shop or a bank – indeed anything that is a regular touch point for consumers, demand will continue to grow for hyper-relevant services and experiences in 2019.

With this in mind, one dimensional loyalty schemes or ambiguous cashback offers, which are based purely on spend, will struggle to be sustained in 2019 – the data returned to the retailer having showed itself to be insufficient to deliver targeted and meaningful relationships with customers.

Instead, we’ve seen this activity gradually replaced with the rise of preference and purchase data extraction in 2018, both on and offline, so that companies can identify behaviours and create these hyper-relevant services and experiences.

However, some of these companies have continued to stumble when faced with the sheer amount of data presented to them. Indeed, a rising trend in 2018 has been retailers coming to us and saying: “Yes, we’re beginning to know what our customers are doing, but what do we do now?”

Deciphering, segmenting and actioning customer data insight in real time is now becoming essential for retailers, caterers and banks alike.

CRM technology that can segment customers based on multiple behavioural preferences, including time, day, spend, product, visit frequency, etc, and then respond with personalised loyalty marketing campaigns, rewards and offers that react to and positively change these segmented behaviours in real time has only begun to take off in 2018…

…Expect this level of CRM technology to become a must-have in 2019. 


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