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While the pandemic has inflicted adversities on almost every industry and sector imaginable, the retail industry is amongst the hard hits. This situation has convinced most of us to digitize as it is the only technological phenomenon that can save the ship from drowning. Owing to this, most retailers have resorted to digitization while the rest still find themselves in a soup with traditional business models and methods of conduct. 

The Global Digital Transformation Market in Retail was valued at US$ 143.55 billion in the year 2020. Anticipatively, this growth can boost digital infrastructure. One acceptable reason for being hesitant about digitization can be intimidation, while another reason is a feeble sense of security in the digital space. But as it is known that nothing can be devoid of drawbacks, a digital space can be a safe place if operated properly. 

Retailers often hesitate to invest their businesses in the digital domain as not every one of them is well-equipped with the digital know-hows. However, in a post-apocalyptic world where digitization is the only effective alternative to continue operations in the market, retailers need to give this topic some serious thoughts.

To ease out the overwhelming feeling of digital adoption for retailers, there are some expert companies that play the role of smart assistants to make digital adoption and integration easy. Several surveys have shown that retailers that collaborate with loyalty programs to facilitate digitization of business tasks are the big winners in the market. Following the same principle, the international multipartner loyalty program PAYBACK is now emerging to be a kin to retailers who want to resort to the digital space. 

PAYBACK, headquartered in Munich, Germany, and operational in ten countries worldwide, encourages the retail industry to digitize. Staying true to its name, it understands the needs and demands of the customers and in building bridges between the offline and the online world, it emerges as an ideal partner in times of crises and facilitates high savings through its loyalty programs. 

A Platform that Encourages and Assists Multichannel Retailing 

For the retail sector, the first lockdown in March 2020 was and still is a watershed of historic proportions. From one day to the next, everything that was not considered of systemic importance was closed. Images of empty city centers went around the world. The world's liveliest cities were deserted all of a sudden. 

“PAYBACK encouraged and paved the path for the digitization of the retail sector, understanding the immediate need to do so,” says Dominik Dommick, Managing Director of PAYBACK. With the comprehensive expansion of its online partner portfolio and the complete mobilization of the entire loyalty program and services through the PAYBACK app, the platform had to spare some time in convincing retailers about the importance of digitization. The platform functions with an objective to bring together offline and online - bridging the gap between brick-and-mortar and online retail. 

Ability to Connect with Millions of Customers 

Digitization is advancing with an unstoppable progress. But the fact that it is possible to be faced with completely closed stores was previously unthinkable. PAYBACK operates in this unique partner network and can leverage the reach of more than 31 million active customers in Germany alone. The platform is able to react quickly with its partners and cushioned the sales shortfalls in stationary retail with digital offerings. Contactless point collection and payment with the app has led to an increased sense of security among many customers to keep threats at bay, as the pandemic has thus become an accelerator of digital trends and, above all, mobile services.

Thriving on Customer-Centered Approaches 

PAYBACK, since the outbreak of the pandemic, started addressing uncertainties. “We needed to offer customers orientation,” explains Dommick and adds, “Such as: Where is what available? Is the partner business open? What can I expect as a customer on site and how can I protect myself from infection? We worked very intensively with our partners to quickly provide customers with the relevant information.”

When circumstances change overnight, the content that is important to customers changes immediately, too. Keeping the uncertainties of the world in crisis-mode in mind, PAYBACK changed their approach to provide customers with what they needed when they needed it – such as information, but also saving opportunities and coupons. Because of this, the company was able to maintain the high relevance it is known for.

PAYBACK creates milestones in being a good partner that proves for itself in a crisis, maintaining loyalty. With PAYBACK, customers are more exposed to saving opportunities and coupons as they collected points worth EUR 473 million in 2020, even surpassing the number acquired in the previous year. 

Understanding the Consumer Behavior 

PAYBACK has observed the alteration in patterns of shopping behaviors during the lockdown, when consumption and purchases had increased. While older people avoided offline shopping, parents preferred online shopping. Couples, on the other hand, are reluctant to shop on site. Singles have shown more stable shopping behaviors. Food retailers, drugstores and pet supplies were busy throughout the year. Beverage stores took the top spots. PAYBACK observed the low mobility of people last year when stores in the cities lost out. The influx from surrounding areas, which usually provides strong sales, has dropped significantly due to the lockdowns. Consumers have shopped much more in their own neighborhoods, which in turn has benefited brick-and-mortar retailers in small towns.

The big winners are sporting goods, bicycles, furniture and furnishings, consumer electronics, and meal delivery services. Tourism and the event industry were hit hard along with food and restaurants.  

Preserving Shopping Diversity

PAYBACK values freedom and variety which have been disrupted during the pandemic. The platform also understands the need for both online and offline shopping, as shopping is always a social interaction and a central experience in city centers and neighborhoods. “Because as convenient as online shopping may be, we need the local shopping experience just as much,” Dommick says. “Customers want to be inspired and advised in the stores, they want to be able to touch and smell goods – and to stop at an ice cream parlor on the way home.” The platform wants to prevent images of empty pedestrian zones to become a permanent fixture and deems digitization of retail as an effective alternative to counter it while maintaining diversity in eCommerce.