Competitive pressures and the drive to increase sales are motivating small merchants in the food and accommodations markets to adopt the next generation of acquiring services, according to the new edition of the PYMNTS Retail Innovation Readiness Index, a PYMNTS and AEVI collaboration.
But how ready do small merchants feel about innovation?
A survey of 500 merchants in those markets indicates many are lagging in readiness to innovate. PYMNTS surveyed food and accommodation companies, including coffee shops, bars, quick-serve restaurants (QSRs) and sit-down restaurants, hotels, hostels and bed and breakfast facilities.
The survey included questions on their knowledge and use of smart point of sale systems, which was defined to them as a potential innovation that combines payment and value-added apps on smart devices. While larger businesses in these segments have been quick to adopt point of sale (POS) solutions with integrated apps, smaller merchants are lagging behind.
Interest in smart point of sale systems
Relatively few smaller merchants have adopted so-called Smart POS systems, but it is not due to lack of interest. Among those with annual revenue of $250,000 or less, 40.2 percent say they have not previously heard of a smart POS solution, but when informed of the possible features available with these systems they are interested in putting them to use. Another 28.2% of merchants in that category have heard of smart POS solutions but are not currently using them.
“The survey provides insight into a ready market for smart point of sale solutions, but a merchant base that needs guidance and assistance in sorting through all the new options available,” said Nicky Koopman, vice president content and value added services, “Acquirers have an opportunity to position themselves as trusted advisors who can sort through myriad options to tailor suites of value-added apps and services that please consumers and optimize business operations.”
What do merchants expect from merchant services?
The report shows merchants expect a point of sale system to be cost-effective, both to implement and to operate. But convenience is the most important factor to look for according to majorities of both accommodation (56.6 percent) and food merchant (54.6 percent) businesses. Overall, two-thirds of those surveyed say ease of use is a major appeal of smart POS systems.
These all-in-one, next-generation solutions can transform the traditional merchant countertop into a dynamic Point of Interaction (POI) that can integrate purchases with consumer-pleasing features such as coupons, promo codes and QR scans, and online features like enabling customers to book appointments and services, order products and track deliveries. They can also improve business operations with apps to improve customer loyalty, manage inventory, know when promotions are likely to be most successful, and identify top performers in their workforce.
What can you expect from the report?
The report provides valuable insights for anyone interested in understanding merchants’ motivations, challenges and needs when selecting their payment solutions. It includes a ranking of consumer-facing features and back office features they are most likely to shop around for.
Learn more about merchant needs in food and accommodations, download the full Retail Innovation Index report by clicking on the image below.