by Frank Keller, SVP, Enterprise Solutions and Merchant Platforms
Pre-pandemic, brands were embracing e-commerce as the way of the future, a separate sales channel to help grow their business. Today, in a new digital era defined by convenience, ease and individualized choices, brands are quickly realizing that e-commerce also has an important role to play in-store and on mobile.
An omnichannel payments strategy is a critical step for any business wanting to effectively compete and maintain pace with consumer’s evolving preferences. At PayPal, we’ve seen this strategy be successful time and time again as millions of small and large merchant locations globally now accept PayPal and Venmo at the point-of-sale. This is in addition to millions of merchant locations accepting PayPal Cash Card Mastercard, PayPal Business Debit Mastercard, Venmo Mastercard Debit Card and the Venmo Visa Credit Card. This extends across verticals including grocery, convenience, gas, quick service restaurants, apparel, retail and travel.
Here are several ways brands are expanding their use of digital solutions in-store to help drive customer conversions:
Accepting a limited number of payment methods no longer cuts it. In a study conducted by Forrester, they found that a majority (71%) of consumers are more likely to buy and feel positively toward the brand (62%) if they have a choice of payment options and digital wallets1.
Merchants in quick service restaurants like Pressed and Panda Express are seeing variety in the payment methods they offer correlate to their ability to create a connection with the modern-day consumer.
Pressed recently added PayPal and Venmo as payment methods at checkout and within the first week, more than half of their transactions were on PayPal and Venmo via a mobile device. Moreover, they saw an increase of 69% in conversion rates and 40% higher average order value (AOV) compared to traditional card payments2.
Other industry-leading retailers like Big Lots, Bloomingdales, Carter’s, Five Below, Foot Locker, Levi’s and Macy’s have recently begun to work with PayPal to enhance their in-store experience and offer more variety at checkout.
Millennials and Gen Z’s make up more than half of the nation’s total population3. For retailers looking to reach a younger demographic, having access to the latest tools like Venmo is particularly valuable. There are more than 83M users on Venmo, which equates to nearly 1 in every 3.5 people who use Venmo in the U.S.
Specialty retailers like Hot Topic and BoxLunch have recently added PayPal and Venmo into the checkout experience to reach their audience of young adults. Recent Venmo research shows that shoppers are 19% more likely to complete a purchase with Venmo than with traditional payment methods, and in the clothing and fashion industry, Venmo can increase unplanned purchases by as much as 34%4.
Next-generation fashion retailer REVOLVE is working with Venmo to offer their online experiences in-person. By offering Venmo QR Code, Venmo Debit and Venmo Credit Card payments at the REVOLVE Social Club pop-up in Los Angeles, Venmo and REVOLVE cater to their highly engaged audience of Millennials and Gen Z. Since opening in early March, more than half of the payments at the pop-up have been through Venmo QR Codes5. The addition of in-person payments helps bring the experience full circle for customers who can also now checkout with Venmo and PayPal at REVOLVE.com.
The in-store experience extends to the friendly skies as travel merchants like United Airlines use PayPal QR Codes to reach customers in a touch-free and safe way. It used to be that airlines only accepted a physical payment card in flight for food and beverages, but customers can now use PayPal QR Codes to purchase United’s refreshed buy-on-board menu. Since launching in late 2021, United Airlines has built on the checkout experience to include loyalty offers such as cashback for in-flight purchases when checking out with PayPal QR Codes.
PayPal has also become a staple in consumers' everyday lives as they have started to use PayPal & Venmo QR codes at gas stations, grocery stores and convenience stores. Merchants including Phillips66, Giant Eagle, Fareway and CVS all offer QR codes at checkout.
It’s not just the mega-merchants who are optimizing their in-store and online experience.
Micro and small businesses like Speakcheesy, The Bullpen and Windybush Hay Farms recently switched to PayPal Zettle, PayPal's point-of-sale solution, which allows these companies to accept PayPal and Venmo in-store without much technical integration. The Zettle card reader also helps manage sales, inventory, reporting and payments across online and physical retail channels.
Solopreneurs and businesses who are looking to reach a younger demographic in-store and online like pickle ball facility, The Picklr, are using Venmo business profiles to manage and organize their business. More than 1 million sellers have a business profile on Venmo, which has helped them to take advantage of the inherent social network that is the foundation of Venmo.
According to McKinsey & Company, more than one-third of Americans have made omnichannel features such as buying online for in-store pickup part of their regular shopping routine since the pandemic, and nearly two-thirds of those individuals plan to continue6. In order to stay relevant and thrive, retailers need to focus on creating cohesion among all sales channels, or risk extinction.
PayPal provides retailers with a flexible and scalable solution set to help convert consumers at the moment of purchase whether online, on a mobile device or in-store.
1Increase mobile revenue by offering consumers a choice of payments. (2021, April): https://www.paypal.com/us/brc/article/enterprise-solutions-increase-mobile-revenue
2Case Study: PayPal and Pressed innovate the digital and in-store experience. (2022, May): https://www.paypal.com/us/brc/article/enterprise-solutions-pressed-case-study
3Frey, William H. (2022, March). Now, more than half of Americans are millennials or younger: https://www.brookings.edu/blog/the-avenue/2020/07/30/now-more-than-half-of-americans-are-millennials-or-younger/
4Edison Trends behavioral panel of email receipts from +300K US consumers and +3.4M purchases at a vertical level between Pay with Venmo and Non-Venmo users during a 12-month period (April 2020 to March 2021): PayPal Market Research Study
5Netfluential survey in June & July 2021 of consumers from a 3rd party panel who made an online purchase in the past 2 weeks for 1,010 consumers (half Pay with Venmo and half non-Venmo): PayPal Market Research Study
6McKinsey & Company, “Omnichannel: The path to value “ April 30, 2021: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-survival-guide-to-omnichannel-and-the-path-to-value
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