Alternative Payment Methods Help Build-A-Bear Workshop Adjust to New Consumer Spend Trends

The very nature of commerce itself is changing.

We’re no longer doing everything online, and the post-pandemic economy demands that a broad — and growing — range of payments options be on offer, no matter where consumers are shopping. The payments modalities and data analytics on the payments consumers prefer to use are especially critical for companies as they look to navigate the current economic environment.

Nuvei Senior Vice President of Commercial, North America, Steve Vincent; Build-a-Bear Workshop Senior Vice President and Chief Technology Officer Dara Meath; and Zenni Optical Chief Technology Officer David Ting told PYMNTS that a smooth continuum of digital and in-store shopping is critical for many merchants.

“Even prior to COVID, consumers were expecting a seamless experience between online and offline” channels, Vincent said. “We’re seeing the adoption of omnichannel commerce where retailers and restaurants, too, are stepping into areas where they’ve never been before.”

Starbucks, by way of example, has its mobile order and pay program. Uber, meanwhile, has used its platform approach and invisible payments to revolutionize ride-hailing and food delivery.

Zenni Optical offers up a microcosm of the challenges and opportunities of the current environment. Ting noted that the company, which has been around for two decades as a purely eCommerce play, has become a juggernaut in the space, selling roughly 1in every 5 pairs of prescriptions sold online in the United States. The pandemic was a boon, as sales grew 30%. That growth rate has slowed as more people go back to the opticians to get their frames and lenses.

“We have to really innovate and perfect the customer experience, improving the selection and the price points … so that we can still grow,” Ting said.

The company is mulling branching out beyond the U.S., he said.

Meath noted that Build-a-Bear aims to increase its more than 500-store count by 50 locations this year.

“Many retailers today are looking at their expansion models and are taking their targets ‘outward’ [to] become experience centers … and that’s what we’re looking at,” she said.

The Build-a-Bear buildout will emphasize the omnichannel shift as more consumers are shopping online and picking up in-store, she said.

As for Nuvei, which is a payments processor enabling 700 payment methods across 200 markets globally and across 150 currencies, Vincent said there has been growing use of embedded finance and real-time payments.

“But where we’re really helping innovate is around alternative payments, which allow merchants to reach their consumers where they want to be met,” Vincent said.

Digital wallets, buy now, pay later (BNPL) and pay-by-bank are tailwinds to the growth in alternative payments, as more than 90% of Nuvei’s merchants are offering at least one of those modalities — and more than a third of merchants are adopting all three. The merchants that provide at least three “payment data points,” said Vincent, are seeing 20% increases in revenues and as much as 10% gains in profit margins.

There’s also potential for “partial approval” payments, as a transaction still can be approved, paid for, and the goods or services received, and the remaining payment reserved for a different payment modality or date.

“The partial approval method, especially internationally, is allowing merchants to increase revenue and improve customer experience,” Vincent said.

The data, as always, give a nod to what customers want when they’re mulling a purchase. And what they want right now is affordability and the ability to manage cash flow. Zenni, said Ting, is seeing consumers opt in to BNPL when paying for glasses, as the economy and inflation are still taking a toll on household financing.

“We’re moving it ‘up’ in the shopping process, so customers can see pricing transparency with approval ahead of time … and we believe this raises the conversion rates quite a bit,” Ting said.

Consumers at Meath’s Build-a-Bear are using digital wallets and tap-to-pay functions at the register in a bid to check out quickly.

“We’re a very mobile environment, and we want to make things as efficient as possible,” she said.

Similar to Zenni, Build-a-Bear sees BNPL as a way to let consumers spread transactions out over time, whether the payment is being made in-store or online.

“The way these consumers shop, digitally, is the way they are looking to shop in-store,” she said.

Although the holiday shopping season is months away, and volatility may be a hallmark in retail, Vincent remarked that “no matter how the economy goes, I think the expansion of digital wallets and alternative payment types” will allow companies to grow and stabilize precisely “because there will be more opportunities to spend.”

The post Alternative Payment Methods Help Build-A-Bear Workshop Adjust to New Consumer Spend Trends appeared first on PYMNTS.com.