Some Merchants Overlooking “Key Point of Business Vulnerability”: Study

Moneris Solutions, a Canadian processor of debit and credit payments, has released highlights from its inaugural
Report to Merchants, which explores factors at point-of-sale that impact customer behaviour. Moneris Solutions provides transaction processing, and point-of-sale hardware, software and systems to more than 350,000 merchant locations in Canada. The research, conducted in March 2003 by Decima Research, finds that payment options play an important role in where consumers decide
to shop.
Among the key findings of the consumer research:
– Most consumers (80 per cent) think Canadian stores provide good customer service, but among those who have also shopped in the United States, 27 per cent think U.S. stores provide better shopping experiences including product offerings, staff attitudes, and prices;
– Almost half of Canadians (48 per cent) agreed that a store’s acceptance of a particular form of payment has a “big impact” on whether they will shop there regularly;
– Almost one third of Canadian consumers (31 per cent) have decided not to purchase a product or service because the merchant did not accept the consumer’s preferred form of payment. In 82 per cent of those cases, it was a debit or credit card payment format that was not accepted;
– Two thirds (66 per cent) of consumers have walked away from a potential purchase because a store’s checkout was too crowded or too slow.
“For many merchant organizations, the focus is getting consumers into the store and to the product,” says Jim Baumgartner, President and CEO of Moneris Solutions. “But this data underscores that the payment processing stage is a key point of business vulnerability. These findings reinforce that merchants should offer the full range of payment options particularly debit and credit,
which combined are far preferred over cash by Canadian consumers.”

Payment Choice Preferences
The research finds that Canadians continue to embrace card payments as their preferred way to pay. Almost three quarters (71 per cent) of respondents selected debit or credit as the payment form they use most frequently for
in-store purchasing, with debit cards leading in popularity at 46 per cent. Yet consumers payment preferences vary by merchant type. Debit was the
most preferred form of payment at grocery stores and clothing stores. Credit cards are the first choice at electronics merchants and home furnishings stores. Cash is the first choice at pharmacies, restaurants, and
barbers/hairdressers/beauty salons but, when combined, debit and credit forms outpace cash at most of these merchants.
“Canadians are among the most enthusiastic users of card payments,particularly debit, and expect to use those payments in almost all purchasing environments,” said Baumgartner. “As a result, Canadian merchants are
expanding their payment offerings – such as adding debit payment in restaurants. We’re also seeing an expansion of debit and credit acceptance in non-traditional card payment locations such as healthcare clinics and
service providers. And, of course, credit cards dominate in the online market.”

Online, Phone and Catalogue Purchases
Moneris has quantified that credit cards are the most frequent choice in online (91 per cent), phone (82 per cent) and catalogue (62 per cent)shopping situations.
Forty-one per cent of Canadians reported having shopped by catalogue, with the strongest clusters occurring in Atlantic Canada (61 per cent) and
Manitoba and Saskatchewan (52 per cent). Twenty per cent of Canadians have shopped online, 18 per cent by mail,
and 17 per cent by telephone.

Price, Products and Points
The research also explored how other key factors impact a consumer’s likelihood to shop at a store on a regular basis.
– A store-specific loyalty program (such as points collection or clubs)impacts more than half (54 per cent) of consumers. Fifteen per cent said it made a “big impact” on their store loyalty;
– Three quarters (77 per cent) are impacted by whether the store accepts their preferred form of payment, with 48 per cent saying it has a big impact;
– Ninety-two per cent say customer service plays a role in store choice, with 71 per cent saying it has a big impact on whether they would shop at a store regularly;
– Product selection has a big impact on 73 per cent of shoppers;
– Price has a big impact for 81 per cent of shoppers;
– Eighty-seven per cent say location plays a role with 64 per cent saying it has a big impact.

Enjoying Shopping
In general, Canadians enjoy shopping. Sixty-four per cent agreed with the statement and 22 per cent agreed strongly. Women outpaced men in their enjoyment – 73 per cent of women said they enjoy shopping while only
54 per cent of men agreed. Most Canadians (80 per cent) believe Canadian stores provide good customer service. Of the 71 per cent of Canadians who have shopped in-person
in the United States, 27 per cent found the American shopping experience to be better and 18 per cent said the American shopping experience was worse.

The top aspects cited were:
– Product offerings;
– Staff attitudes;
– Prices;
– Customer service;
– Staff knowledge and training.

Moneris is Canada’s largest merchant payment processing company, with a staff of over 1,100 employees at its head office in Toronto, Ontario, and offices in Chicago, Illinois, Montral, Qubec, Vancouver, British Columbia
and Sackville, New Brunswick. Moneris Solutions was formed in December 2000 as a result of a 50:50 joint investment between the RBC Financial Group and
BMO Financial Group.
The data in the Moneris Solutions Report to Merchants is from a survey conducted for Moneris Solutions by Decima Research Inc. Research was conducted in March, 2003 over the phone with more than 2,000 adults across Canada
18 years of age or over. Results are considered accurate to within 2.2 percentage points.