Q&A: Warren Hayashi – ‘Brands Need to Meet Their Consumers Where They Are At’

Warren Hayashi, the President of APAC at Adyen, talks about how brands can keep up with the latest payment trends in Singapore’s evolving consumer landscape.

Earlier this year, a retail report from Temasek-backed fintech company Adyen found that tech-savvy Singaporean shoppers stood at the front of the queue globally when it comes to payments for retail purchases.

Interestingly, according to the research, which surveyed over 38,000 shoppers and 13,000 merchants in 26 markets, 31% of Singaporeans said they don’t even carry a wallet with them anymore.

Of particular concern for brands: the survey showed a gap between consumer demand for personalization and retailers’ ability to deliver it.


 

To learn more about the findings and what they mean for retailers that want to keep up with the latest payment trends in an evolving consumer landscape, we spoke with Adyen Asia-Pacific President Warren Hayashi.


Why are Singaporean shoppers embracing digital payment methods at a higher rate than the global average? How are brands leveraging this trend to enhance the customer experience in Singapore?

There are a number of reasons for that – not only is Singapore a tech-forward economy, consumers here simply have a lot of payment options at their fingertips. Our Singapore Retail Report 2024 shows that Singaporean shoppers are much more likely to use Tap-to-Pay (52%) and QR Codes (47%), compared to the global average of 23% and 27% respectively.

At the same time, Singaporean consumers also put a premium on trust and convenience. They want to pay through methods that they trust, and if they are not able to conveniently do so, they will simply drop the purchase.

Our research found that 56% of Singaporean shoppers will abandon a purchase if they can’t pay with their preferred method. Clearly, brands have to make it easy for shoppers to pay, or risk their bottom line.


 

“Singaporean consumers also put a premium on trust and convenience. They want to pay through methods that they trust, and if they are not able to conveniently do so, they will simply drop the purchase.”

Our recent partnership with Cotti Coffee is an example of the important role payments play in an outstanding customer experience. As part of its global expansion, Cotti has streamlined payments across all touchpoints with Adyen, providing consumers in each market with their preferred local payment options, online or in-store. Not only does this ensure seamless and hassle-free payment, it frees up store staff to focus on what they do best – providing excellent customer service.

The report highlights the growing importance of social commerce. What strategies can retailers adopt to effectively integrate this into their sales funnels?

Social commerce is growing in popularity. Our research shows that 81% of retailers experienced revenue growth after embracing social commerce in 2023. That said, social commerce is really just a piece of the bigger picture.

Consumer preferences are changing very quickly. Brands need to meet their consumers where they are at, be it social media today or in the metaverse tomorrow. There’s also brick-and-mortar retail, where shoppers continue to frequent. Ideally, they should provide a seamless unified experience for customers across all of these channels.

So the biggest strategic priority is to remain flexible and agile while ensuring a well-connected backend system that can provide a robust, consistent experience for shoppers anytime, anywhere and on any platform they wish to shop on.

“Consumer preferences are changing very quickly. Brands need to meet their consumers where they are at, be it social media today or in the metaverse tomorrow.”

Globally, a significant portion of the population remains comfortable using cash. How can businesses creatively strike a balance between these differing preferences?

It’s all about being flexible and agile. In Singapore, while many consumers still use cash in particular circumstances or transactions, contactless payment methods like tap-to-pay and QR codes are also gaining ground. By offering payment methods that customers feel comfortable with, businesses stand to gain. For instance, businesses that offer payment methods like WeChat Pay or Alipay will be able to gain the patronage of Chinese tourists.

What does the data tell us about resistance by businesses to use digital payments due to additional costs? How are these concerns being addressed?

There are different factors at play when it comes to investment in technology, the costs being one of them. While the upfront costs of any technology investment can be significant, we see from our experience working with enterprise businesses that a well-thought-out strategy leads to long-term benefits and cost-savings.

Investment in the arena of digital payments can grow the bottom line. For instance, by using payments technology to make sense of transaction data, retailers can enable effortless cross-channel transactions that customers want.

“53% of consumers would be more loyal to a retailer that enabled them to shop in store and finish shopping online, or vice versa.

Simply put, consumers get to enjoy digital and physical shopping experiences that allow them to move between channels and pick up where they left off. Singaporean shoppers welcome this model, with our research finding that 53% of consumers would be more loyal to a retailer that enabled them to shop in store and finish shopping online, or vice versa.

Businesses are also looking at payments technology to improve operational efficiency. In physical stores, payment innovation like mobile POS solutions are popular for busting queues especially during peak sales seasons. Customer experience aside, the stability and processing speed of the payment terminals is also crucial for a quicker conversion rate in stores.

Retailers today are warming up to the idea of having more sophisticated payments set-ups in place, especially as their businesses reach a certain stage of maturity that demands more out of payments. Businesses aiming to scale with ease will discover that these investments are well worth it.

With fraud as a growing concern in the digital payments landscape, how can businesses effectively balance security measures with providing a smooth and convenient payment experience?

Fraud affects both consumers and businesses. Specifically for businesses, one of the most common types of fraud they experience is friendly fraud, when a customer commits fraud by (accidentally or purposefully) requesting money back from a business for a purchase without a legitimate reason.

At Adyen we advocate striking a balance between risk and revenue. Having too strict of risk controls will frustrate your loyal shoppers, while having no controls at all will allow fraudsters to slip through the cracks. There are authentication technologies that can help businesses strike that balance between the two.

“One of the most common types of fraud they experience is friendly fraud, when a customer commits fraud by (accidentally or purposefully) requesting money back from a business for a purchase without a legitimate reason.”

For instance, businesses can leverage payment technologies like Dynamic 3D Secure 2 to make smart authentication decisions and assess customers where necessary, minimising disruptions to the checkout process through a frictionless flow. By utilising background information that doesn’t require shopper verification, checkout steps are reduced thereby maximising conversion.

Additionally, machine learning (ML) technology such as RevenueProtect can also provide operational teams with real-time alerts for fraud detection and prevention. This risk management solution combines customisable risk rules with network-wide insights, enabling businesses to detect, prevent and respond to fraud patterns more effectively through automation.

The survey shows a gap between consumer demand for personalization and retailers’ ability to deliver it. What is holding businesses back from bridging this gap and what is your advice to those looking to bridge it?

Personalisation is another important and growing theme for brands. Our research shows that 69% of local shoppers want personalised discounts, among other things, from their favourite retailers. At the same time, more businesses (40%) are admitting that it’s getting increasingly challenging to categorise customers by their behaviours and needs, with only one in three (32%) having confidence in their understanding of the majority of their customer base to personalise items, discounts and services.

The crux of the problem businesses face is in engaging technologies that are robust enough to collect and analyse complex data from multiple touch points, making sense of that data and then creating personalised solutions at scale quickly. Unified commerce is critical for driving personalised experiences because it connects all sales channels to the backend system, and provides actionable insights for brands to create tailored experiences.

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