BROOKFIELD, Wis.— A new study has found that increasingly cost-conscious consumers are driving demand for omnichannel experiences, retailer apps, and embedded finance offerings that add value “without incremental expense.”
The results were released as part of Fiserv’s 2023 Carat Insights report.
“Advances in technology have put more ways to pay, including digital wallets, retailer apps, and alternative payment methods at consumers’ fingertips,” Fiserv said.
The company added that with each innovation adding complexity to the customer journey, today’s consumers want the businesses they buy from to “simplify commerce” by offering a streamlined experience that integrates every part of the purchasing process from ordering to payment to reward redemption.
The Findings
Among the findings:
- With inflation stressing wallets, consumers have become more attentive to costs. Among consumers, 59% said price is their biggest consideration when determining which channel to shop. Price is the top factor for both high-income earners (60%) and low-income earners (58%).
- When shopping via app, 44% of consumers choose retailer apps over third-party apps because they offer lower fees. Consumers are comparing prices before they order. In fact, 46% of consumers who ordered directly from a retailer’s app also searched on a third-party app, a 6% increase from 2022, Fiserv said.
- Omnichannel is on the rise. Consumer demand for omnichannel commerce continues to show staying power as experiences that combine digital and physical interactions remain popular. In total, 59% of U.S. consumers said they used Buy Online, Pickup In-Store (BOPIS) in the preceding month, up 2% from 2022, the report found. BOPIS usage is most popular at Restaurants (59%), Retailers (47%), and Grocery Stores (47%). BOPIS is nearly ubiquitous amongst Millennials and Gen Z, with 85% of consumers leveraging the service
- More orders placed. Fifty percent of U.S. adults have ordered ahead on a retailer app in the past month, an increase of 3% from 2022. This capability is particularly embraced by Millennials (69%) and Gen Z (66%), according to the Fiserv report.
Appeal of Digital Wallets and Retailer Apps Grows
Meanwhile, Fiserv said as digital ordering grows, retailers are driving more commerce by enhancing in-app experiences and integrating their apps with digital wallets. With consumers buying digitally more often, businesses are investing in these experiences.
Among the findings:
- 64% of consumers have used digital wallets to purchase online in the past year, up 4% from 2022
- Ease of use (56%) is the most important attribute for consumers when using a retailer app, followed by ability to pay in-app (46%), integration to loyalty programs (44%) and the option to pick-up in-store or order delivery (41%)
- Within an in-app retailer loyalty program, customers cite the appeal of quantity of offers (44%), app-only discounts (43%), and personalized rewards (39%)
Embedded Finance is Deepening Customer Relationships
“Businesses are exploring opportunities to embed new financial experiences throughout the customer journey,” Fiserv said. “Two popular opportunities include the instant issuance of digital cards at checkout and the ability for consumers to transfer funds from their bank account as a payment method.”
Among the findings:
- 61% of consumers say a credit card offer at checkout with instant approval is appealing, including 68% of Millennials and 66% of Gen X
- 34% of consumers report having used Pay by Bank, including 46% of high-income earners. Consumers choose Pay by Bank because of consumer protections (40%), no debt accrual (40%) and ease of use (38%)
For more info: Carat Insights 2023.
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