Understanding Payment Preferences: Insights from Xero's Report

15-Feb-2025

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Understanding Payment Preferences: Insights from Xero's Report

Amid the evolving landscape of consumer habits, payment preference is a major consideration for smaller businesses looking to succeed. And as luxury brands attempt to assert themselves in a crowded marketplace, they can add to customer satisfaction and increase sales significantly — by incorporating multiple payment methods. Fortunately, this is something that Xero, – according to the Xero payments report – can help any business dealing in luxury to do. Let's talk about it!

The shifting landscape of consumer payment preferences

The current expansion of the digital economy has helped reshape the way that shoppers pay for goods and services. In its latest report, Xero has uncovered the news that many shoppers are now prioritising the need for multiple ways in which they can pay — and in the UK, 65% percent of shoppers are more likely to support businesses which offer more than one payment option. This highlights the way that today’s luxury consumers are adapting to the current demands — which in turn means that brands, too, should adapt to keep pace, if they are to remain both relevant and accessible.

The importance of offering diverse payment options

Today’s customers expect an easy route to purchase whatever it is that they are buying — and this includes the method of payment. They want to pay how they want, when they want, where they want. This is certainly the case for luxury goods — a sector loved by such a wide variety of people, all with different preferences. Whether shoppers prefer to pay by card, digital wallet or even cryptocurrency, the incorporation of multiple payment methods will increase the engagement and loyalty of any consumer.
This is certainly the case within the luxury market — which often sees a high average transaction value. As the report shows, 52% of 18-34 year olds are choosing to rely on digital wallets, a preference that clearly points towards ease of payments and fast transactions. Here, luxury brands will need to incorporate Apple Pay, Google Pay, and other payment apps.

The role of security and trust

Security is the most important aspect of luxury retail transactions. Shoppers need to be sure their payment information is protected. When shoppers were asked what makes them trust an online purchase, 68% of UK online shoppers feel more comfortable if the payment method is recognisable, 48% look for purchase security information, and 25% trust sites with recognisable logos. This means luxury retailers should offer secure, recognisable payment options that are user-friendly. The luxury consumers are likely to trust more recognised payment methods and are encouraged to complete the purchase without reluctance.

Enhancing customer experience and streamlining operations with Xero

Xero is a strong player in the business and accounting software industry. It holds an advantageous position when it comes to payment technology. Xero has a user-friendly platform that can allow small business owners to send invoices and quotes, track bills and expenses, and give customers several payment options. By using Xero, small businesses can improve their operations and scale with the changes in the payment behaviours of their customers.

Real-time insights for better decision-making

Integrating Xero with a payment processing solution can provide real-time data, to enable business owners to learn from customer payment activity and make the necessary changes. Business owners can learn from consumer behaviours to analyse how they can understand where they need to improve. The ability to take learning directly from customers empowers retailers to look at trends and directs them ahead of others.

Moreover, with Xero automating invoices and payment reconciliation, it can help small business owners lessen the amount of admin work they have to do. This integration can help operations as it will enable luxury retailers to focus on good customer service instead of drowning in admin work.

A case for automation: Quick payments for luxurious offerings

“In luxury, a timely payment can make or break the deal. The ability to send out an invoice and collect payment electronically contributes significantly to cash flow, a critical fuel required to ensure luxury businesses can provide the amazing products and services that their customers love.” Businesses that have adopted digital platforms can experience up to 15 days quicker payment terms than those operating manually according to the Xero report.

Adapting to the future of payments with Xero

With the growth of the luxury market well underway, the onus is on businesses to understand their customers better and align their payment preferences with them. The Xero report offers many insights to help business owners navigate change. Luxury retailers in leveraging multiple payment solutions and automation can attract a larger customer base while increasing customer satisfaction. Businesses seeking to adapt and take on the market to equip themselves with their contemporary tools, choosing Xero as the dedicated platform is the most natural choice to deliver operational efficiency and user experience and drive growth in the luxury market. Running a business with the right payment solutions will not only be aspirational but entirely possible.

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