Like customer experience and digital transformation, the need for innovation has become a priority across industries. Retail is no exception.
A new PYMNTS and AEVI survey examined what is motivating retailers to innovate payments. The biggest driver of innovation was competition (84.6%). No one wants to get left behind, and many just want to be on a level playing field. Other common reasons were to increase sales (77.4%) and boost customer loyalty (65.4%).
It's no surprise that smaller businesses (under $250,000 annual revenue) were more motivated by the potential to increase sales (80%). Less intuitive was the businesses with revenues of $10 million or more caring less about customer loyalty than the companies with average revenues (54% and 65%, respectively). In theory, larger businesses have a bigger customer base and can afford attrition. It's also likely that smaller businesses have a closer relationship to their customers.
A recent RSR Research survey also found that competition was driving the need for innovation; 83% of retailers said they felt pressures from Amazon and other retailers. In this study, one conclusion was that the more successful retailers had a higher tolerance for risk and could be more experimental. Aside from price sensitivity, online competitors innovating too quickly is perceived to be one of the biggest in-store retail challenges.
Innovation is tied to investment ability, according to PYMNTS. Larger companies were far readier to innovate; 94% of those with annual revenues between $25 million and $100 million were very or extremely ready, while only 34% with revenues under $250,000 felt prepared.