A new era in retail has begun
Amazon Pay VP Patrick Gauthier discusses the future of shopping in a post-pandemic world.
For many, if not all, retailers, COVID-19 has radically changed the way they do business, as customers lean more heavily into digital experiences than ever before. According to research from PYMNTS, consumers think it will be an average of 426 days before they will return to shopping in stores again. But there’s also an opportunity in this dramatic change -- an additional 114 million people have shifted to online shopping since the beginning of the pandemic -- meaning retailers have the opportunity to reach new customers as never before.
Patrick Gauthier, the head of Amazon Pay, recently sat down (over Zoom, of course) with Karen Webster, CEO of PYMNTS for a wide ranging discussion around the future of retail in a post-pandemic world. A few highlights below, lightly edited for length and clarity.
On customers moving online during COVID, and what that means for retailers who operate physical stores:
“Going digital is what we at Amazon would call a ‘no regrets’ strategy. Whether you believe people are going to come back rapidly in store, or whether they’re going to remain in the safety of their home, going digital is going to improve the experience of the customer either way, even when the customer goes in store.”
On decision fatigue and the consumer mindset:
“Here’s the reality of what’s happening with customers right now. I think we know they’re stressed. We’re all stressed. Right? There is clear evidence across the board of the effect of decision fatigue. Everything we do in our day-to-day life requires more brain power because decisions appear to be higher stakes.”
On omnichannel experiences, and how they can help during the pandemic:
“It’s incumbent upon a provider to customers, a retailer, to look for ways to reduce stress. And I think in rolling out some of the tools, the services, and the experiences that leverage the digital experience that consumers have already been using, you potentially create more familiarity and a less stressful situation. And when you do that, you not only gain new customers potentially, but you also gain more loyal customers.”
On trust, and reducing stress for the customer:
“We show that security interests trump pure price selection. We know that it cuts across demographics, from millennials to baby boomers. And we understand how the customers are using certain markers like brand to decide whether or not they’re in a safe space.”
On what retailers can learn from changing shopping patterns during the pandemic:
“There’s plenty of neurological studies that show that we have what I call a decision-making budget. We have a certain amount of energy that we can dedicate to making decisions… and I think the research that you’ve done in this most recent round shows that this time high level of uncertainty is going to continue, and requires us to think of this as not just a short term transition period. Now, the beauty of this is, as I like to tell my team, if you train for the Olympics, you’re really good for the regionals. And my point here being, that if we’re able to create those digital experiences - whether in the home, across channels, or in the store - that are more familiar to the consumer and therefore less stressful, then even when the situation with the pandemic has been resolved we’ll have created this step function improvement for the customers.”
On establishing trust with newly online customers:
“I’m a strong believer that trust is not an option. Trust is a necessity. Trust is the foundation on which commerce is built. Because without trust, there’s all sorts of breakdowns in the relationship that a merchant-buyer transaction is about. So trust is a combination for me. Trust is established as a function of the experience that I’ve had in the past and what I know I can rely on, as well as the behavior of the person or the entity that I’m interacting with.
“We found that globally in our own research, 85% of consumers rate trust and security as somewhat or very important in their decisions to buy. We also found that 70% of consumers will switch away from a seller where the experience is disappointing or unpredictable or untrustworthy. And importantly, in many instances customers will tell others about it. They will tell the people who trust them.”
On Amazon Pay as a proxy for trust:
“Because of the investments that we’ve made in customer trust around all of the Amazon services for so long… we are [able to] export the capital of trust that we have created and allow other merchants to leverage that. And why are we doing this? Because at Amazon, we believe everything starts from the customer. If you solve a customer problem, good things happen to all parties involved. And in this case, we are solving a customer problem, which is ‘How do I feel safe in a world that is otherwise feeling very unfamiliar?’”
On staying connected to the customer during a time of uncertainty:
“Connecting the merchant to the shopper, establishing that relationship, remains critically important. It’s important when you’re on Main Street, it’s important when you are across the world. And it’s on us to help both of them connect.”
On multichannel shopping experiences:
“We believe in this notion of the shopping journey that has multiple touch points. That did not start at the beginning of the pandemic. I think the pandemic has just shown customers that there are new ways to use more of those touch points. And, we anticipate therefore that multichannel is going to be the lingua franca. It already was in many ways, but it’s going to be the lingua franca of retail moving forward.”
On Amazon Pay’s relationship with retailers:
“The situation we see now is customers exploring a wider range of retailers, as well as the possibility to use new digital tools. And by that, I don’t just mean shopping online, but using tools such as Alexa. I see this as a great opportunity for retailers.
“We see it as one of our responsibilities to bring innovation to our merchants. How can we help them connect with those customers that are inherently expecting a digital experience? We’re constantly looking for ways to connect our newly digital customers, as well as mature digital customers, with our merchant partners.”
On trust and the future of voice commerce:
“In the same way mobile was the future more than 10 years ago, [voice commerce] is going to be a journey. I think the time that people have spent over the last few months at home probably gave them the opportunity to try new things, but.. it’s going to take a number of months and years. There’s a flywheel in which a customer gets familiar and comfortable with the new experience and the merchants and then moves to the next level of innovation of what Alexa can do for you. And that flywheel gradually accelerates. I am personally convinced that there’s a point in the future where commerce via voice will overtake commerce via keyboard.”
Join Amazon Pay and PYMNTS.com for more discussions on the state of commerce and future of payments.