Sometimes bloggers or journalists get a bit carried away. They see some data or fact, and run off to declare there’s a trend you need to know about.
The latest one I’ve seen is all about how to reach the generation of “cashless shoppers”. The argument goes that you need to use SMS messaging to reach customers because they are all shopping online – where you obviously can’t pay in cash.
The particular article I’m thinking of uses the fact that the UK spent £114 billion online last year as proof there’s a generation of shoppers who don’t use cash. I checked their facts, and it’s true. The UK spent a ton of money shopping online.
Maybe I’m nit-picking, but I don’t see how that translates to a special group of people who are “cashless shoppers”. So I did what everyone who has a question does these days. I googled about it.
According to a report on the BBC, digital payments exceeded cash payments in 2015. That bundles together debit cards, cheques, contactless and mobile payments. The article goes on to predict that cash payments will drop another 14% by 2024.
But not all sectors are equal. In the same article it says that 83.9% of payments at pubs are in cash. And 78.5% of convenience store payments are in cash. Discount stores receive cash 68% of the time. Travel and transport receive 59% cash. Those numbers are from 2014, the latest I could find with the sectors broken out. Obviously things may have changed some in the last year and a half, but probably not drastically.
Looking into things further, I read a Bank of England report that said while digital payments are increasing, so is the value of the Bank of England notes in circulation. They even created a short video to go along with the report that makes it clear they don’t expect cash to disappear at all. In fact, it may increase as they release new notes in the next few years.
Getting back to my original question – whether the article I read about cashless shoppers is correct – I’d have to say I debunked the concept as a whole. Yes, people are buying more online. Yes, some people are using debit cards more frequently than cash, but not everywhere.
And by ignoring the sectors where cash still dominates, the article is potentially leaving the impression that only online retailers can benefit from SMS messaging.
That certainly isn’t true.
Online retailers can make great use of SMS messaging. But so can pubs, discount stores, travel businesses, and virtually any sector of business. Let’s take a look at how:
- Pubs can send “two for one”, “free appetisers with entrée”, or a percentage off coupon to customers via SMS messaging. Why let customers go to the pub down the road when you can give them a great deal in yours? So they pay in cash, that’s great! They also carry their mobiles wherever they go and love to get a deal from their favourite pub.
- Discount stores can alert customers of new stock, flash sales, or special events in store to increase foot traffic. Many shoppers still prefer to see what they’re buying in a store. These shoppers also carry their mobile everywhere and will see your SMS message virtually the instant you send it. That can entice them to stop by. So what if they pay in cash? It’s more money in your business’ pocket no matter how it looks.
- Travel agents, private hire, and other transport businesses can utilise SMS messaging in a variety of ways. Travel agents can raise awareness of new travel opportunities by sending messages to previous customers. Private hires can send messages to let their fare know when they will arrive. Transport companies can use SMS messaging to track and communicate with their fleet, or let customers know when they’ll be there to pick up packages.
The more you look, the more ways you’ll find to use SMS messaging in every sector. Cash, debit, credit or even bitcoin doesn’t matter. SMS messaging is a tool you can use in your business because just about everyone uses a mobile in the UK. Nearly 77% of Brits will have a smartphone in 2016 and some small percentage have basic phones. By the end of 2017, over 81% will have smartphones.
In the end it doesn’t matter how they pay, so much as how the live. We’re a mobile society now, and SMS messaging is still the best way to reach almost everyone quickly and inexpensively. See, now I’m getting carried away! Of course, I’m doing it deliberately to make a point.
We’d love to hear how you feel about cash versus digital payments. Do you still use mobile coupons if you pay in cash? Let us know in the comments.