As luxury fashion breaks down borders, and
brands continue their international growth strategies, they will need to be
acutely aware of the fiscal policies and preferred payment methods in new
territories.
In an increasingly competitive marketplace,
it’s important retailers and brands get all parts of the customer proposition
right – but understanding what is required at the point of sale, the final
touchpoint where conversion can be achieved or lost, is crucial.
Popular methods of payment can be very
different between the Western and Eastern world, with China very much leading
the way when it comes to a mobile-first attitude, but there can be equally
contrasting fiscal patterns from one European country to another.
Below, we’ve highlighted some of the trends to
be aware of in major European markets and further afield that might just help
luxury fashion players to avoid the unexpected and ensure they are set up for
serving consumers seamlessly wherever they target sales growth.
Offering receipts for goods purchased in France
is not common practice. Whereas in Italy, the UK and the US, for example, customers
expect to receive a receipt once they have bought from a shop, in France the
shopper will typically need to request the paperwork if they want it.
It is one of several features that constitutes
normal payment processing in France. Timetric
research suggests that debit card payment continues to remain a leading payment
method in France – more so than more
cash-oriented markets like Italy, which GlobalData recently described as “the
most cash-dependent market in Europe”.
When it comes to paying for online orders, open
invoice is a favourable method for German consumers – it’s one of the
distinctive fiscal patterns associated with German retail.
It is a particularly popular way for people to
pay in sectors with high return rates, such as fashion, where there is a
widely-acknowledged trend among German shoppers to order multiple items and pay
only for those they keep without the perceived inconvenience of having to
secure a refund.
In UK it is commonplace to offer receipts to
customers and there are fewer instances of open invoice transactions, but there
is arguably a growing trend in the country for digital email receipts to be
sent to customers who have purchased items in store.
Alongside a growing debit card payment culture,
this move towards greater distribution of digital receipts – arguably started
by consumer electronics titan Apple – is viewed by many in the retail industry
as a way of facilitating future conversations and marketing opportunities with
shoppers online once they have left the store.
The big shift in the US in terms of retail
payments in recent time is the shift towards EMV – Europay, Mastercard and
Visa – which is a global standard for cards equipped with computer chips and
the technology to authenticate chip-card transactions.
For years, US retailers took a swipe of the
card and the customer’s signature to authenticate payment – a process that the
UK all but wiped out with the evolution of Chip and PIN in the early 2000s.
Authorities argue that EMV is more secure and will result in fewer instances of
fraud, and US retailers from across sectors are rolling out payment upgrades in
accordance with the standard.
As a previous blog of ours suggests, as luxury fashion brands look to sell further afield, the more they’ll need to prepare for new ways of doing business and, consequently, facilitating payment. With China now the world’s largest market for smartphones, that nation’s consumers have effectively gone straight from cash to phones in terms of payment method preference – in many cases skipping over card culture prevalent across much of Europe and the US. Other Asian markets are similar.
In the Netherlands, too, consumers have a favoured way to pay unique to the country. Ideal – an e-commerce payment system based on online banking which allows customers to buy on the web using direct online transfers from their bank account – has a 50%-plus share of the market. It’s clear that payment and fiscal strategy must be amended for each territory a brand expands into – sometimes it’ll be a small shift from the norm, but sometimes it’ll look fundamentally different to what they’ve had to deal with before.
Understanding these nuances will put luxury brands in a prime position to connect with and collect more customers as they embark on new growth opportunities abroad.
