WORLDPAY CONSUMER BEHAVIOUR AND PAYMENTS REPORT 2016

WORLDPAY CONSUMER
BEHAVIOUR AND PAYMENTS
REPORT 2016
Essential insights into today’s consumers

5
Welcome
7
In-store:
Shopping as an experience
17
Shopping online:
Choice and trust, or bust
25
Omni-channel:
Seamless success
31
Future:
Harnessing the possibilities of mobile
36
About Worldpay

Welcome
Who are today’s consumers? What do they expect from their
shopping experience?
These two questions underpin the success of every retail business, today and in
the future. With consumers more connected and informed than ever before, it’s
a challenging and competitive environment. Success lies in understanding the
customer journey end to end.
In this report, we uncover what consumers like and dislike about certain aspects
of their shopping journey. In March 2016 we surveyed over 2,500 consumers
across the UK, analysing their behaviour across the different buying channels,
with in-depth insights into their behaviour to give you a deeper understanding of
what they want from retailers.
——
What’s the greatest pain point when shopping in-store?
——
How can online retailers reduce checkout abandonment?
——
How are omni-channel services affecting the shopper journey?
——
How do consumers want to shop and pay in the future?
All these questions and more are answered in this report. We hope you enjoy
the insights.
James Frost
CMO, Worldpay
Consumer Behaviour & Payments Preference Report 5

In-store:
Shopping as an experience
Online shopping offers modern consumers the convenience and
speed to shop any time, anywhere. Mobile devices make location
irrelevant, facilitating an ‘always on’ consumer that can purchase
at their fingertips.
So why do people still shop in-store? Clearly, there’s the tangible element
such as trying things on and browsing products. But just as important
are the social elements, such as shopping with friends and enjoying the
atmosphere of the store. Shopping in-store is a big part of every day life; in
fact, around half of consumers are more loyal to the brands they shop at
in-store compared to online.
But what’s putting people off in-store shopping? A large proportion are
frustrated by queues and waiting to pay. 4 in 5 shoppers won’t wait for more
than five minutes to pay. For businesses, it’s essential that the payment
process is seamless if they don’t want to lose those sales.
Key questions for in-store retailers:
——
Are you giving consumers a compelling reason to visit your store?
——
How are you rewarding your shoppers’ loyalty?
——
Is an inefficient customer journey losing you sales?
——
How could you use technology in-store to improve the
shopping experience?
6 7

So what makes shopping in-store fun and exciting?
And what’s the most frustrating thing about the
in-store experience?
Our consumers love the social aspects of shopping - such as meeting up with their friends - and value the
chance to discover products at first hand. It’s a total experience that (so far) can’t be replicated online.
Consumers are being let down at the final step of their shopping journey. Businesses should focus on
ways to reduce friction at the point of payment, with mobile payment solutions helping consumers pay
anywhere in-store.
39%
Queuing and
payment
process
51W
Being able to
try products
46W
Browsing stores
and items on a whim
30W 25W
51% 46% 30%
25%
Socialising with friends
or family
The atmosphere
of the store
22%
17%
Finding a product
Comparing products
10%
Understanding or trying a product
8 Consumer Behaviour & Payments Preference Report
Consumer Behaviour & Payments Preference Report
9

Big queues? How long will your customers wait to pay?
Chip and Pin is still the way we like to pay.
Despite our national reputation as queue-lovers, having to wait in line to pay is the greatest pain point for
in-store shoppers. Retailers who eliminate long queues will have the competitive advantage, as 79% of
shoppers won’t wait to pay for longer than five minutes.
Since most shoppers always have their card on them, Chip and Pin is obviously the most convenient
payment method - it’s the reliable option. Cash remains popular too and is seen as the quickest way to pay.
4%
Less than 1 minute
41%
3 — 5 minutes
34%
1 — 3 minutes
21%
More than 5
minutes
53%
31%
10%
4%
2%
Chip and Pin
Cash
Contactless
card
QR Codes
Smart phone
10 Consumer Behaviour & Payments Preference Report
Consumer Behaviour & Payments Preference Report
11

Contactless technology: how often do you tap and go?
Would you like to use contactless to pay for transactions
over £30?
Ahead-of-the-curve Londoners use contactless payments more often. But consumers are wary of using it for
9%
More than
once a day
150+90=
Greater
London
15%
higher-value transactions (over the current £30 limit) because of security concerns.
11%
Once a day
180+110=
Greater
London
18%
40%
22%
A few times
a week
A few times
a month
400+400= 40%
180+220=
Greater
London
Greater
London
18%
63%
No
63X
37X
37%
Yes
19%
Less than
once a month
90+190=
Greater
London
9%
12 Consumer Behaviour & Payments Preference Report
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13

M45
48% would like to pay anywhere in-store if staff could take
payment with a mobile payment device. Only 27% have ever
experienced this. For those that had experienced this service:
Could retailers make the shopping experience better by using
technology? 80% of consumers think so.
67%
67+33M
helped them get what they
wanted quicker 63%
found it very personal
and engaging 61%
got better information
on the product / better 55%
service
were able to
order an item that was out
of stock in-store
55+61+39M63+37M
Mobile technology is now part of everyday life in the UK. But are retailers making the most of it? Going
mobile in-store has so much untapped potential: it enables staff to engage with shoppers, helps them
find what they’re looking for and takes payment on the spot, immediately eliminating the pain points (like
queueing) that frustrate consumers.
Nearly half of consumers
say they are more loyal to
the brands they shop at
in-store than they are online
Most consumers are concerned about the decline of their high streets as online shopping takes over. This
is not the end of brick-and-mortar retailing however - shoppers still feel emotionally connected to in-store
shopping and are more loyal to those brands, including a healthy 58% of 16-20 year olds.
14 Consumer Behaviour & Payments Preference Report
Consumer Behaviour & Payments Preference Report
15

Shopping online:
Choice and trust, or bust
It won’t be a surprise that 73% of consumers enjoy online shopping
because of the convenience of shopping from home, and over
half value the increased choice and chance to shop around for
deals. We’ve become a nation of savvy online shoppers, and today
internet retailers have to work ever harder to retain customer
loyalty in a highly competitive environment.
Although we all love to shop online, there are still sticking points which can
often lead to abandoned shopping carts and lost revenue for retailers. The
average checkout abandonment rate is a staggering 67%.
So why aren’t retailers always able to close the deal? The checkout process
is a key improvement opportunity, given that 1 in 5 customers find it a
major obstacle in their shopping journey. Faced with the hassle of creating
a new account, paying extra card fees, or simply not trusting the site with
their financial details, many consumers will simply give up and shop on
another site.
Simplifying the end to end journey is crucial if online retailers are to stay
ahead of the competition.
Key questions for online retailers:
——
Does your checkout have too many steps?
——
Are you providing the right payment methods for your customers?
——
How can you simplify your customer journey?
16 17

Why is shopping online fun and exciting?
Which part of online shopping frustrates you the most?
People love online shopping because it’s convenient, and they can easily shop around to find their perfect
choice. Our lives are inextricably connected to the internet, and shopping is an essential element of that.
The online customer journey can be long and painful, at a time when consumers are demanding
convenience and speed. Delivery - particularly when it costs extra - is off-putting, and a tricky checkout
process can often be the last straw. Checkout abandonment runs at a costly 67%.
73%
Shopping in the comfort of
their own home
49%
Finding the best
possible deals
55%
Having access to
more choice
27%
Getting products or
services quickly
17%
28+23+19+17+13+U
Understanding a product
19%
14%
Finding a product
?#@*&%!
Checkout & payment process
28%
Delivery
Comparing products
23%
18 Consumer Behaviour & Payments Preference Report
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19

What makes you abandon an online purchase before
you finish it?
Being forced to create an account is often one step too far for the busy consumer - they perceive it as a slow
and annoying process, even if it isn’t. Could providing guest checkouts be the answer to eliminating this pain
point? Another deal breaker is additional card or payment fees, which put off 25% of online shoppers.
58% feel that their payments are secure online but 56% believe that extra security checks like Verified by
Visa and MasterCard SecureCode are necessary.
Interestingly 16-20 year olds are the most security conscious with 41% stating they only make payments less
than £100 because they are concerned about security (more than any other age group).
www.myfavouriteonlineshop.com
www.myfavouriteonlineshop.com
Your Basket
Proceed to Checkout
20%
The payment failed
33%
16%
I had to create an account
I had to input too many payment details
25%
15%
Retailer charged extra fees to use my payment methods of choice
The payment process was too difficult
23%
14%
I didn’t trust the site’s payment security
Retailers didn’t provide my payment method of choice
20 Consumer Behaviour & Payments Preference Report
Consumer Behaviour & Payments Preference Report
21

Only 36% trust that stores will safely save their payment details.
As security-conscious consumers, we’re now feeling more at ease with online payments, although over half of
us still aren’t comfortable with storing card details online. This conflicts with the 56% of consumers who are
convinced of the convenience of one-click purchases - something that’s not possible without stored details.
So retailers must build trust, reassuring consumers that their sensitive financial information is being properly
protected online.
It’s critical to offer consumers a convenient journey when paying online. Having too many steps at the
checkout, not providing adequate delivery options and setting up an account, all drives poor customer
experience. Businesses that offer a simplified journey whilst providing the flexibility and convenience to all
different types of shoppers will end up with happy customers.
67W
52W
38W
Step
67%
of 16-35 year olds
are more likely to
purchase on mobile
optimised sites
56W
BUY
52%
would abandon their
online purchase if
their preferred delivery
option was not offered
52W
GUEST CHECKOUT
8 / 10
38%
think that paying online
is often slow/ there are
too many steps
56%
52%
think one-click
purchasing and buy
buttons are great
prefer to buy from sites
where they don’t have to
set-up an account
22 Consumer Behaviour & Payments Preference Report
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23

Omni-channel:
Seamless success
Shoppers are now taking technology for granted, and expect
retailers to offer flexible services that enable them to shop
however they want, across any channel. This is highlighted by the
fact that 92% would like to be able to check stock availability on a
retailer’s website before they visit the store.
The blurring of channels have been further fuelled by click and collect,
providing customers with the greater choice offered online together with
the convenience of trying and buying in-store. The introduction of the click
and collect service has been highly successful for most of the UK’s big
retail brands, with 43% of our consumers (and 52% of the 21-35 year olds)
agreeing that it means they now shop online more.
If retailers don’t adopt a truly omni-channel approach, they risk losing their
competitive edge. Consumers expect to be able to shop on their terms,
and see buying as one experience regardless of channel.
Key questions for the omni-channel approach:
——
Can you offer better shopping services than your competition?
——
Are you using technology to enhance the customer journey
across channels?
——
How integrated and consistent is your online and offline experience?
24 25

57+43 39+48 20+66
Click and collect has encouraged 43% of consumers to shop
online more often.
Click and collect means maximised convenience and (generally) free delivery - ideal for busy
consumers. Retailers then benefit from the ‘impulse purchase factor’ when consumers collect in-store.
It’s a win-win situation.
Percentage of people
who use ‘Click and Collect’
Why do you use
‘Click and Collect’?
Percentage of people who end
up purchasing an additional
item when they collect their
item in-store
66%
In the last
month
48%
Convenience
43%
Purchase
additional items
20%
More than 4
times in a month
39%
It’s free
57%
Only what they
intended to buy
Technology is impacting the customer experience, with 21-34 year olds leading the way for omni-channel
shopping. The smartphone is the enabler here, facilitating the blurring of online and offline channels.
47%
62%
People who have
downloaded an
app to get better
discount in
a restaurant,
bar, shop
56%
64%
People who
regularly research
products in-store
then find the
cheapest price
online
46%
53%
People who have
downloaded
vouchers and
coupons while
shopping
in-store
61%
59%
People who have
taken a photo to
get advice from
friends/ family
before buying
16 - 20 year olds 21 - 34 year olds
26 Consumer Behaviour & Payments Preference Report
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9 out of 10 consumers would value being able to check online if
a product was in stock in-store.
Technology - particularly mobile - is changing how consumers approach the shopping journey, online and
in-store. Shoppers now use the internet to compare products, read reviews, ask advice and get discounts.
How retailers can add value for these highly informed consumers is crucial to a successful sale.
92W
92%
58W
58%
People who would like to use
their phone to scan a barcode
in-store and then paying online
People who say they’d like the ability to
check if an item was in-stock before they
went into the store simply by looking on the
retailer’s website
28 Consumer Behaviour & Payments Preference Report
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29

Future:
Harnessing the possibilities
of mobile
Who knows how we’ll all be shopping in 50 years time? However,
it’s clear that in the next few years it’s all going to be about the
smartphone.
Over half of shoppers (and 62% of 16-20 year olds) expect that their
phone will replace their card as their main method of payment. Even
now, 54% would happily leave home without their wallet, using their
phone for payment.
Simplicity, speed and connectivity will become ever more essential.
3 out of 5 shoppers would like to instantly buy products simply by
scanning on-screen TV codes and ordering via their phone. Whilst
a large majority (74%) want to see same-hour delivery on products
they’ve bought.
Technology will help unlock the future of retail. The important
question for businesses is which technology to prioritise for
investment.
30 31

54% think that mobile phones will replace cards as the main
method of payment, rising to 62% for 16 - 20 year olds.
Mobile is proving to be the catalyst in an omni-channel world. But will the phone disrupt payments; could
it make the need for cards obsolete? There is already a belief that this will happen, and with more than
half of consumers happy to leave their wallets at home, it’s surely just a matter of time.
76W
76%
would like to walk into a store and scan an item with their phone,
pay/checkout instantly all through their mobile phone and walk out
the store without queuing up to pay.
54W
54%
would like to leave home without their wallet - being able to pay for everything
through their smartphone (card details stored on your phone)
32 Consumer Behaviour & Payments Preference Report
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Speed is fundamental to today’s shoppers, who want to
buy anywhere, anytime. They demand instant gratification, even
expecting same hour delivery.
Technology for a connected generation.
Consumers are clearly not ready for a facial recognition payment method. However we are clearly in a buy anywhere,
anytime phase of shopping. As TVs get smarter, they will be more connected to commerce, with consumers able to buy
items from adverts or TV shows using your phone. With the rise of Apple Pay, consumers are more welcome to biometric
payment technology. Speed is fundamental to today’s shoppers, who want instant gratification, shown here by the strong
desire for same hour delivery.
So, what do these insights tell us? Well, consumers have a greater expectation on technology and how businesses
should use it to improve the shopping experience. Crucially, they expect this across all channels, making a connected
and complementary journey key to happy customers. Technology has an essential role in enhancing the shopping
journey across in-store, online and mobile.
74%
69%
64%
59%
56%
would like same hour delivery
are NOT interested in technology
that would allow them to pay
with your face
would like to store all loyalty
cards/ programmes on one card
or smartphone App
would like to scan a code from
a television screen to redeem
a coupon and instantly buy
something after
are interested in using
biometrics to pay in-store and
online using a fingerprint, palm
or Iris scanner
34 Consumer Behaviour & Payments Preference Report
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35

About Worldpay
Worldpay is a leading payments company with global reach. We provide an
extensive range of technology-led payment products and services to over
400,000 customers, enabling their businesses to grow and prosper. We manage
the increasing complexity of the payments landscape for our customers, allowing
them to accept the widest range of payment types around the world. Using our
network and technology, we are able to process payments from geographies
covering 99% of global GDP, across 146 countries and 126 currencies. We help
our customers to accept more than 300 different payment types.
Worldpay UK has a 42% market share in the UK and helps businesses of all sizes
sell more to their customers by accepting card payments in-store, online, via mail
or telephone, and on the move.
Find out more at www.worldpay.com/uk
#1
UK payment
services provider
300,000
Worldpay customers
in the UK
30
Years experience
in payments
© Worldpay 2016. All rights reserved.
This document and its content are proprietary to Worldpay and may not be reproduced, published or resold. The information is provided on an “as is” basis for information purposes
only. Worldpay makes no warranties of any kind in relation to the content. Terms and conditions apply to all services. Worldpay (UK) Limited (Company No. 07316500 / FCA No.
530923), Worldpay Limited (Company No. 03424752 / FCA No. 504504), Worldpay AP Limited (Company No. 05593466 / FCA No. 502597). Registered Office: The Walbrook Building, 25
Walbrook, London EC4N 8AF and authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Worldpay (UK)
Limited is authorised and regulated by the Financial Conduct Authority for consumer credit activities. Worldpay B.V. (WPBV) has its registered office in Amsterdam, the Netherlands
(Handelsregister KvK no. 60494344). WPBV holds a licence from and is included in the register kept by De Nederlandsche Bank, which registration can be consulted through www.
dnb.nl. Worldpay, the logo and any associated brand names are all trade marks of the Worldpay group of companies.
36
Consumer Behaviour & Payments Preference Report

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