Tag Archives: Retail

Plenty of Cheer During the 2019 U.S. Holiday Shopping Season

The numbers are in for the 2019 holiday shopping season, the final one of the decade, and retailers were pleased to learn that overall sales increased by nearly 3.5% compared to last year. Starting on Black Friday and culminating with last-minute shopping on Christmas Eve, retailers were definitely in the black this season, and this is despite the period being shorter than last year by six calendar days. E-commerce was the biggest winner with an increase of 18.8%, and the payments industry was pleased to see a greater volume of credit and debit card transactions along with digital payments.

e-commerce merchant optionsEven though online shopping accounted for a little less than 15% of the overall sales volume, it should be noted that the Cyber Monday shopping event continued to grow, particularly in the consumer electronics segment, which experienced a boost of 10.7% on a year-over-yer basis. Specialty apparel was the segment that shoppers expressed greater interest in compared to 2018, but even department stores posted a nice growth of 6.9% despite industry analysts warning that the heyday of American shopping malls is behind us.

According to the MasterCard Spending Pulse survey of retail activity during the holiday season, stores were prepared for the shorter shopping period this year; many retailers stepped up their omni-channel marketing efforts starting in early November. It should be noted that department stores actually saw a decline in their brick-and-mortar transactions, but they posted a 6.9% increase of their online sales.

Now that Christmas has come and gone, retailers are gearing up for the post-holiday blues, which tend to feature many gift returns or exchanges; a typical example is footwear, which tends to see a lot of exchanges because of size issues. Clearance and special discount situations will likely see a migration towards e-commerce channels, but brick-and-mortar retailers are ready to welcome more store traffic that should last through the first week of the New Year. Physical storefronts located within shopping districts have an advantage in this regard when merchants get together to organize entertainment and family events; the idea is to increase foot traffic at a time when many shoppers have time off work.

Wall Street Investors Also Enjoyed Holiday Cheer

The Santa Claus rally on Wall Street was delayed by just one day this year. According to market analysts at Nasdaq.com, exchange-traded funds that focus on the banking sector soared when traders returned to work after Christmas Day. This is good news for the payments industry, which does not exclusively rely on banks to stay busy. Consumers are warming up to alternatives to the traditional banking system; increased regulation and oversight along with a lack of flexibility by banks are driving consumers towards payment systems that they can manage from PCs and smartphones. Since providers of alternative banking services work closely with payments processors and clearinghouses, the future looks good for the payments industry.

5G Communications Could Change the American Retail Landscape [2023 Update]

5G Communications Could Change the American Retail Landscape [2023 Update]

In terms of telecommunications and payment transactions, the United States is strangely out of step with the rest of the world in some aspects. Paper checks, for example, are still used by many companies. The adoption of EMV technology by American retailers was slow enough to cause anxiety among providers of payment processing services. As for the fifth generation of wireless technology, commonly known as 5G, South Korea and China are examples of significant markets that rolled out 5G networks way ahead of the U.S.

How 5G Will Impact Brick-and-Mortar Stores

In major metropolitan areas such as Atlanta, wireless service providers have already upgraded their infrastructure to 5G. Widespread upgrades to 5G technology will take place over the next few years, and retailers have everything to gain from this development. In essence, 5G networks are able to handle vast amounts of data at much higher speeds; while it is easy to see how e-commerce operations can benefit from this technology, it is important to note that brick-and-mortar retailers will also be able to capitalize on this upgrade.

Mobile Payment Processing Systems

Retail storefronts do not have to compete against e-commerce because they can simply embrace it. With the advent of 5G, however, brick-and-mortar stores can give their e-commerce counterparts a run for their money through interactive experiences. Augmented reality features, for example, can let shoppers get more information about products on shelves, and they can also enable trying on clothes and putting on makeup prior to going into dressing rooms or approaching the cosmetics counter.

A more practical benefit of 5G technology as it relates to physical stores will be found at the point-of-sale. Payments industry analysts believe that 5G is the missing ingredient in the perfect recipe of true mobile payments, and this is something that merchant processing companies also believe will result in a digital payments revolution. That current lag experienced by shoppers who wish to pay with their smartphones at POS terminals should go away once 5G is implemented.

Mobile Shopping Trends

The use of digital wallets and other devices that enable contactless payments has been on the rise across Asia and Europe. In China, nearly 50% of retail purchase transactions are settled with digital wallets; in the U.S. only 23% as of July 2019. Another improvement that retailers can expect from 5G technology is to mobile equipment; brick-and-mortar stores that do not offer this option should start looking into ways of implementing it between now and the end of 2020.

The next major retail trend in the U.S. is expected to be a hybrid of mobile shopping and in-store pickups. A neighborhood pizzeria that offers takeout should strongly consider developing a native or progressive web app that enables mobile ordering and payments because this is what many consumers are showing a preference for: they want to browse menus, select toppings, and pay for their orders right from their smartphones, but they also want to be able to stop by the stores and physically retrieve their purchases.