How Does Open Banking Affect the Latest Retail Trends?

Changes in consumer behaviour and the technological landscape are not necessarily altering the way people shop but they are giving them more options and adding to their overall experience. Competition between retailers is likely to get fiercer as they try to stand out in a packed and easily accessible marketplace. Open banking will contribute well to this shift by enabling smaller merchants to accept cardless payments, by proving rich data that gives consumers and retailers a mutually beneficial shopping experience and by streamlining and reducing the cost of the payments process, meaning brands can focus their resources on other key areas instead. Here are a few of the most talked about retail trends.

It used to be that brick-and-mortar stores were the traditional way to shop, with many of them extending their offering online. Now, many stores that started digitally, have opened up physical shops. This shows there’s still a demand for the real thing, especially in big cities. Pop-up shops are also a more affordable version for digital stores that can’t afford the overheads of a permanent retail outlet. Themed ones are literally ‘popping’ up all over the place meaning fans of the brand can turn their visit into a day out. An eco-friendly bag store might collaborate with an organic tea supplier or a vintage brand might collaborate with a retro band, all designed to turn shopping into an immersive experience. That said, those customers that do prefer to shop online are becoming more and more demanding. They want a physical experience in the digital world which is where augmented reality comes in. Clothing retailers are able to enhance their offering with AR technology, helping consumers visualise what something will look like on them.

Artificial intelligence is also getting in on the game. If a consumer sees a dress they like on a photograph, they no longer need to look for something similar by searching ‘floor length blue dress, with a v-neck, Roman style shoulders and silk material.’ Let’s face it, such searches rarely bring up something close. Now, a shopper can simply search for something similar by posting the photograph of what they like. This works well for comparing styles and prices. Eventually it will reach the level of sophistication where it’s clear if it can be shipped affordably to your location as well, without having to go through the whole purchasing process only to find out it can’t. In a previous article we talked about social media influencers. Yes, they are often sponsored by brands and feature a ‘buy now’ link of what they are wearing. But, there are also a lot of authentic posts where the influencer is simply wearing something that fits their style, especially in the case of travel vloggers who are more likely to be sponsored by hotels than fashion brands. This is wear ‘search’ technology becomes even more powerful. 

As mentioned, all of these augmentations to the way consumers shop, are facilitated in many ways by open banking and the data sharing that goes with it. The marketplace is likely to become more competitive in many ways, with fintech companies and retailers partnering up to take shopping to the next level.