We sat down with Leanne to discuss how PayPal is viewing the current state of the economy, what they’re hearing from their consumers and what lessons we can take from the last recession to get us prepared for the future. Here are a few key takeaways:
THE MINDSET OF THE CONSUMER
I think consumers are highly anxious [right now]. Consumers feel very overburdened by the task of managing their money; the line is very thin between being in control and out of control. And what we're hearing consumers say to us is, “help me simplify my money management, create clarity in my choices, and help me get more from my money.”
HOW TO PIVOT WITH THE CHANGING ECONOMIC SITUATION
What was important to the consumer six, twelve months ago has shifted – and we have to shift with them. And I think it's going from big moments to the micro-moments that really matter to the consumer. So how do we give them the opportunity to save a couple of dollars on every transaction? How do we help them optimize their reward points and the reward points that they can earn through choosing to fund in different ways? How do we help them understand how to responsibly use a pay later type funding option?
An example of that is [pay later] was funding holidays and fashion. And now the fastest growing category in the pay later area is groceries. So I think it is being really, really in tune with customers and then shifting the products that you're helping them with. And then the way that you're talking to them in a very, very empathetic way.
In terms of channel mix, something that we're really focusing on at the moment is the power of partnerships. We work with a whole lot of merchants and we're all…navigating this space together. And it's having really honest conversations with our partners to say ‘Hey, how can we leverage each other's channels and each other's customers to really help them during this time?’
Quite often we have shared customers, so [the focus is on leveraging] the combined value of our assets? How can that unlock new value for customers? And that's really opening up some real innovations. And why did it take a recession for us to be having these conversations? But it's opening really fertile territory.
I can give you an example of one that we did with Uber for vaccinations. We knew that a percentage of the population were disadvantaged in their ability to get vaccinated because of their inability to access transport. So we teamed up with Uber to provide free rides to one of our other partners, CVS, to get access to those vaccinations. So that was a three way partnership [where each partner was] fulfilling a very different need for the customer and it just felt great to do and delivered real value to the communities that we service.
LEARNING FROM THE PAST
I was working for an airline [during the last recession] and one of the first categories that consumers pull back on their spending is travel. And so very similar themes of using that. First of all, knowing that it always comes back. Anything that comes up must come down and vice versa. So it's playing the long game and having the confidence in the long game and your core proposition. But it's also using it as a chance to shore up the foundations and work on the things that you may not have the space to in messy periods of grace. So it's core infrastructure projects.
Something that we're really focused on at PayPal at the moment is - we've got incredible reach and engagement through our own channels - so how do we make sure that every channel is performing its socks off and that every piece of creative that leaves our door is just delightful, and really putting the energy around the things in our control versus out of our control. And that's where I'm focusing my team at the moment to say, Hey, let's not [focus on] what we don't know: geopolitical environment, inflation, etc. These are all things we can't control, BUT we have a whole lot of levers and things that we can focus on in our control and put our energy and get some momentum around those.
MESSAGING TO YOUR CUSTOMERS
I've just had a day of meetings on this exact topic, so it's super timely. The first thing is to do it just so empathetically. It would be so tone deaf to not be aware [of consumer sentiment regarding inflation and the economy].
The first of the three things that we talked about today is, ‘How are we providing customers with simplicity?’ So, friction free experiences and leveraging our risk management capabilities to bring benefits to customers. Decline anything that's going to cause them stress, really taking that out of the situation - and we've got huge risk management capabilities that we can apply. So, how do we weigh the risks so that customers don't get embarrassed at checkout or don't have those situations of declined payments.
The next pillar that we're focusing on is flexibility. How do we give the customer choices that empower them to make decisions? Can they pay later? Can they pay with their points? Can they get a short-term line of credit? And really making those options clear to them in a very, very simple way.
And then it's how do we bring value to the customer pre-purchase, at-purchase, and post-purchase? And thinking about that really, really consciously as ways to just continually be delivering value to the consumer in new ways.
GenZ IN FOCUS
The side hustle is [not only] well and truly alive, but increasing. So in terms of the behaviors of this generation, that “flow of money in” is super important and it's coming from multiple sources. And the side hustle is as important to them as their main source of income - so that is a really key behavioral difference.
PAYPAL FUN FACT
A little-known fact is that on PayPal you can use all your accumulated credit card points to pay as a currency. So if you're short of cash, you can use that as a source of free money over time!
Leanne Sheraton is a global business leader and passionate global citizen, having worked in and led commercial teams in multinational businesses across the world.
In her role as Chief Marketing Officer at PayPal, she is responsible for leading a team of marketers across the globe to unlock new sources of growth for both PayPal and Venmo through inspiring consumers and businesses with new and innovative ways to grow their participation in the global digital economy.