Founded in 2010, Secret Escapes offers discounted luxury holidays through its membership-only eCommerce site. Now operating in 21 different countries, the e-tailer's head of payments, Juan Andrade, describes the complexities of rolling out payment technology methods for different territories across the globe.
How does payment technology and luxury travel retail fit together?
Looking at the share of payment methods, the US and UK are predominantly reliant on credit and debit cards, while PayPal has made a dent into this card share. But we operate at around £400+ retail value, so we're heading into luxury, and this brings about a consequence in terms of process.
Some international customers are far more comfortable using pay-later methods. And in Central and Eastern Europe, as well as Asia, those customers are more accustomed to paying cash at the hotel or via bank transfer. In the UK we don't need to do anything like that at the moment, but we're looking into how we can make it easier for customers to buy their dream holiday.
Tell us more about the differences between international customers?
So the level of adoption of Mastercard and Visa is lower in some non-UK/US countries and the banking infrastructure means customers have become accustomed to paying in a specific way.
Our brand is still very new, we launched in 2010 and went into Asia and Central and Eastern Europe last year. We launched in seven or eight territories in a space of a couple of weeks – we're a start-up so we're quite agile. And in Germany we recently enabled bank transfer and seven-day invoice, and we saw a huge pop in conversion almost that same week – we were doing those customers a disservice for not having that option. Meanwhile, the Nordics favour Klarna and the payment method we're looking at in Belgium is called Mister Cash.
We're also looking at China. And if you're not using social payments like Alipay, it's going to be more difficult. I'm looking at the key players in our territories because it's all very country specific.
What about mobile wallets like Apple and Android Pay?
There's anecdotal evidence that there was a high adoption when those both emerged, but the usage has now gone down. We've delayed the implementation because it's not just about thinking what's the new and shiniest thing out there, but what's the trend and how will it benefit your customer and your conversion?
The majority of our users are on a mobile device, but they won't buy on mobile, the conversion on desktop is much bigger – so we could stick Apple Pay in and hope that will fix it, but it's not that simple.
I also remember getting excited about Apple Pay's Safari launch, but again, what does that mean for your business and customers? Only people using the Safari browser on their iPhone or a Mac would be able to buy using this service – but how many are using those browsers and devices and shopping on our site?
Are you deploying technology to help customers transact with you quicker online?
With discretionary goods, like holidays, initially I thought we would need to get our customer journey as slick as possible. But our research shows nine out of 10 people who booked with us were intending to go on holiday, but weren't intending on booking with us. We believe this is down to the great sales that we curate from within our network of suppliers.
People look at our booking form 2.5 times before they book and from different surveys and focus groups, we've found they're quite committed. You could add a two-second lag and it wouldn't make that much difference. So we focus more on inspiring them to take a holiday with us and focus more on the product page than the booking form.
And finally, what about the future of the relationship between retail and payments?
Payment methods are almost irrelevant without the right retailer support. As a customer, there's almost no benefit in using Apple Pay with contactless so widely available, so you have to incentivise the customer to change their habits. The incentive can come in the form of loyalty, maybe extra points, But look at Tesco's Payqwiq – are they going to be able to change their customer behaviour by offering loyalty points, maybe some will, but what about the rest?
Looking at Blockchain and Bitcoin, I'm extremely interested in what that can do in the consumer spending sector, but it's a little bit out there to say Bitcoin will take over the world.
At some point in five or ten years, with regulatory changes like PSD2 coming into play, I believe that there will be less reliance on MasterCard and Visa. Businesses that understand this are embedding themselves in Blockchain R&D projects, and looking at this technology today.