Is it time for retailers to hop on the cryptocurrencies trend? – RetailWire – RetailWire

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Pacsun in early October became the first major teen retailer to accept Bitcoin and other cryptocurrencies, believing it is “one of the major trends” working with its young customer base.
The California-themed retailer said it aims to keep on top of fashion and lifestyle trends “to really give customers what they want.” Recent examples include collaborations with the ROBLOX metaverse and investments in livestream shopping, TikTok and shoppable ads on Instagram.
The retailer said celebrity endorsements and the accelerated online shift over the last year are driving crypto’s appeal with younger generations, citing a recent study from Pymnts.com showing 54 percent of current or former crypto owners are Gen Z.
“The Gen Z audience, our primary consumer, is very tech oriented, and we dedicate a lot of our efforts towards social media and e-commerce to align with their lifestyles and resonate with them on a more personal level,” said Mike Relich, Pacsun’s co-CEO, in a statement.
Piper Jaffray’s “Taking Stock With Teens Fall 2021” survey found only nine percent of teens have traded cryptocurrency, but 70 percent are aware of them. Of the crypto traders, 78 percent are male.
Prices of Bitcoin and other digital coins have rallied in recent months on reduced regulation fears.
Other advantages of blockchain payments cited by advocates includes faster transaction settlements, reduced fees and greater security than credit cards. The technology also promises greater transparency as blockchain tracks a product’s lifecycle, ingredients, storage conditions and ownership history.
While Pymnts.com research finds cryptocurrencies’ use for purchases is low even among “highly connected consumers,” intent is high and expected to grow as more retailers accept such payments.
Overstock, Starbucks, Newegg, Whole Foods, Nordstrom, Home Depot and GameStop are among retailers accepting crypto payments. Walmart and Amazon.com are believed to be exploring the technology.
Walmart earlier this month began piloting the sale of Bitcoin at Coinstar kiosks in some U.S. stores.
“Bitcoin ATMs have been around for a while, including in many supermarkets,” Sam Doctor, chief strategy officer at crypto brokerage BitOoda, told Bloomberg. “Walmart expands Bitcoin access to more people, though, and gives it further legitimacy among skeptics, should they roll it out beyond an initial pilot.”
DISCUSSION QUESTIONS: Will the appeal to Gen-Z prove to be a major driver of the adoption of cryptocurrencies as a payment mechanism for retailers? Are the concerns over their use as a payment method heightening or easing?
10 Comments on “Is it time for retailers to hop on the cryptocurrencies trend?”
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I find it hard to believe that 9 percent of the surveyed audience has traded cryptocurrency. What on earth are they buying with it?
I think I make the same connection between Piper Jaffray and teen trends as I do between financial advice and Tiger Beat.
Offering crypto as a payment method isn’t likely to be a differentiating reason for anyone to choose to shop at a specific retailer, but it doesn’t hurt the brand to have that capability. It can only help in terms of allowing a more convenient shopping experience for the consumer, and the data trail it leaves is certainly a benefit. This is a prime example of how technology may not be gratuitous but it also isn’t a must-have at the particular moment. In another year or so, though, that must-have status will likely change since Gen Z’s spending power is growing.
Plan for accepting digital currencies, sure. Offer for payment, no. The markets remain highly volatile and many of the currencies are thinly traded, meaning the retailer may not be able to quickly exchange the payment for dollars. The one tipping point for cryptocurrencies as a payment mechanism is when suppliers start accepting them. Then at least there’s a bit of confidence that the retailer can exchange Bitcoin or others for products.
Many retail chains, like H-E-B, have begun to install cryptocurrency machines in their stores knowing that its use and frequency will increase in the near future. I believe this will become as normal as debit cards did many years ago.
Crypto is still far from wide adoption as a payment method. Retailers may find cryptocurrency fluctuations a boon or a bust compared to the good old fashioned dollars. But one thing we’ve learned over time is that retailers must adapt to the times or risk becoming irrelevant.
No, Gen Z will not be able to drive the acceptance of crypto. Just because your business is sensitive to online marketing, social networking and modeling doesn’t mean that cryptocurrency is also part of your business model. In fact, the wild swings in the cryptocurrency markets will teach most retailers and young (read poor) consumers that using an unstable currency for your business’ transactional mainstay has dire consequences. Ask Elon Musk on any particular day which cryptocurrency he favors (Bitcoin, Dogecoin, Shiba Inu, or Ether) and watch the value shift wildly. Throw in the bans from the Chinese government on cryptocurrency, and one can see why these currencies are sheer folly to buy, own or even invest in. Oh yeah, until these can be tracked, traced, taxed, and universally accepted on a global scale with a stable price basis, they will never be accepted by the financial markets.
The question is whether the ability to accept cryptocurrency will influence shopping behavior. There are probably more effective ways to drive sales and create loyalty.
What I am realizing with owning cryptocurrencies is that, with the same amount of investment, one day it can buy me a can of Coke and another day it can buy me their bottling plant. I am exaggerating of course, but that is exactly what I feel cryptocurrencies are as a form of payment – an exaggeration.
As we were asked/told/taught as children — supposedly, as I’ve never actually met anyone who experienced it — “if everyone else jumps off a cliff, will you do it too?” It now appears the answer is yes.
(And just as a practical matter: how much use is something currently valued at >$60K to a retailer like Starbucks? Do you get $63,648.34 — or whatever — in change with your latte purchase?)


How likely are Bitcoin and other cryptocurrencies to become a much more commonly accepted method of payment at retail over the next two years?

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