Contactless payment, membership model to reshape Singapore retail in 2021: Adyen

CONSUMERS increasingly favour technological retail experiences, but brick-and-mortar stores are not obsolete, global payments company Adyen said in a media roundtable on Thursday.

In the session on 2021 retail trends in Singapore and the Asia-Pacific region, Warren Hayashi, president of Asia-Pacific at Adyen, espoused the adoption of a unified commerce approach to better appeal to customers. "Power is being able to put the shopper in the middle, instead of transactions," he said.

As the "seamless experience" afforded by one-click payments, same-day delivery options and QR menus raise expectations of consumers, contactless will be cemented as the new normal, Adyen predicted.

The Covid-19 pandemic has accelerated the use of contactless payments. According to Adyen's 2020 Agility Report, 58 per cent of Asia-Pacific respondents and 72 per cent of Singaporeans preferred to use contactless payment methods because of hygiene concerns.

The company said the use of e-wallet payments through services like Apple Pay has risen, citing research by market research company Kantar, which found that the frequency of e-wallet transactions across six South-east Asian nations rose from an average of 18 per cent pre-Covid-19 to 25 per cent post-Covid, while the number of cash transactions fell.

Adyen also suggested that businesses can leverage on subscription models to collect customer data and cultivate brand loyalty. While streaming services already operate on a subscription basis, the company found that 38 per cent of Singapore respondents are interested in retail and food and beverage subscriptions to reduce shopping frequency.

Leading the way are Singaporean millennials - 46 per cent expressed interest in subscription passes. The Asia-Pacific region, however, lags behind with 27 per cent.

A "buy-now-pay-later" approach by retailers will also continue to be a lure for customers this year, with the flexibility and control providing a push to those who might otherwise choose to abandon a transaction, Adyen said. In Singapore, 1.1 million people have used a "buy-now-pay-later" service, a Finder survey conducted by market researcher Milieu found last year.

In 2021, the distinction between offline and online stores will continue to blur, Adyen added. Technology will be integrated at stores to make checkouts a less prominent part of the shopping experience.

"Ultimately, the winners are going to be the ones that can provide contextual and experiential experiences for consumers," Mr Hayashi said.