How Fintech is Paving the Way for Unprecedented Operational Efficiency for Brick and Mortar Retailer

Despite the rise of digital transformation and eCommerce, the future still looks bright for brick-and-mortar retailers. Thanks to new technological innovations in the field of fintech, it’s possible for stores to embrace some of the efficiencies of the online counterparts of offline stores. 

Statistically, brick-and-mortar retail is still as popular as ever. According to a CX Trends Survey, 70% of shoppers still visit retailers weekly and ICSC data shows that 79% of consumers prefer to shop in store. 

Despite this, there’s little doubt that the growing convenience of online shopping is a formidable force for retailers to contend with. However, thanks to advances in fintech, it appears that many brick-and-mortar stores are beginning to go toe-to-toe with their digital counterparts in offering similar levels of operational efficiency. 

With this in mind, let’s take a deeper look at how fintech is helping brick-and-mortar to adopt some of the efficiencies of its eCommerce counterparts:

Transformative CX

It’s extremely challenging for brick-and-mortar stores to compete with their online rivals when it comes to delivering convenience and cost effectiveness. Advances in online payments and the lower costs associated with eCommerce have forced more retailers to excel in other areas. 

This means that customer experience (CX) is a key facet of operational efficiency for brick-and-mortar, and modern fintech services are helping more businesses to excel in this key area. 

Fintech can be utilized to deliver transformative CX for retailers and can be used to create a series of touchpoints that promote customer interaction and build loyalty for the physical store. 

Crucially, point-of-sale (POS) data can be used to monitor customer behavior and trends to create a more engaging loyalty scheme that rewards in-store visits with exclusive discounts in departments that could be of interest to each individual based on their preferences. 

This POS data can also help to leverage more targeted ads and in-store promotions through intelligent loyalty apps that can understand when a customer is visiting a physical location.

Next-Generation Inventory Management

With the help of integrated POS systems or RFID tags, it’s possible for brick-and-mortar stores to gain unprecedented control over their inventory to easily keep track of stock. 

Intelligent systems can actively monitor customer purchases to automatically update inventory levels in real-time. This means that retailers can protect against instances of stockouts or overstocking products that aren’t selling as frequently. 

This helps brick-and-mortar stores to retain tighter control over their budgets while maintaining a positive CX by preventing them from visiting a store only to find that the product they want has sold out. 

Unified Payments Data

With so many alternative ways for customers to pay for products in store, fintech firms have been hard at work to create solutions that combine different tools. Innovations in open finance have helped to unify payment systems for retailers to emulate much of the convenience afforded to customers when making purchases online. 

PPAAS offers a payment automation solution that’s hardware-agnostic and cloud-based, helping brick-and-mortar stores to conveniently utilize the technology and expand the range of payment services offered to customers. 

These unified systems can help brick-and-mortar overcome its reliance on legacy payment solutions and help to provide a more simplified customer experience when it comes to the checkout process. 

Potential for Dynamic Pricing

In the post-pandemic landscape, eCommerce has been able to utilize dynamic pricing to appeal to the growing price sensitivity of customers. While this has traditionally been difficult for brick-and-mortar retailers to replicate, the widespread availability of fintech-powered data insights is helping more stores to become in tune with the pricing of their products. 

Overpricing and underpricing can be damaging to retail stores, but AI and fintech solutions are helping to gain a more comprehensive understanding of the price customers will be willing to pay for products. 

Factors like online surveys, social media, and interactive outlets can all help retailers leverage data insights to adjust pricing in real-time. Likewise, data-driven tools within advanced POS technology can help retailers determine the most appropriate price for products while keeping seasonal spending patterns in mind to adjust prices accordingly. 

This can help more brick-and-mortar stores to make their budget stretch further and fend off competition both online and locally. In gaining more power to identify market demand shifts, retailers can adjust prices and capitalize on opportunities to grow their revenue in-store. 

Driving Retail Into the Future

At times, it can seem as though brick-and-mortar retail and eCommerce operate on an uneven playing field, with digital transformation helping to leverage far greater convenience and payment flexibility online. 

However, fintech innovation is helping to grow the relevance of brick-and-mortar while enhancing its strongest asset: the customer experience. This, in turn, is helping retailers to win more customer appeal and nurture a more loyal base of shoppers. 

As digital transformation helps to grow the open finance landscape, we’re likely to see more retailers emulate the payment flexibility that’s become commonplace online, paving the way for even more success in the future.