ACI Blog

How to Recession-Proof Your Retail Business in 2021

Supermarkets, for example, initially struggled to keep shelves stocked and faced challenges to get shoppers to adhere to social distancing rules; they were also unable to accommodate delivery slots as the demand for online shopping, home delivery and click-and-collect options skyrocketed overnight. But for those that adapted quickly to serve and service their customers in this “new normal,” it has also been a year of new opportunities. But even as vaccines become available, retailers still face considerable hurdles as they approach a new year, and here are three steps they should take to stay ahead of the game in 2021.

Strong digital presence and strategy are crucial to having the edge

Since COVID-19 restrictions were put in place, global eCommerce sales have seen a dramatic rise, which has led to massive increases in digital transaction volumes. ACI’s monthly eCommerce tracker, based on hundreds of millions of eCommerce transactions from global merchants, showed sustained spikes in eCommerce spend in the months since March. In the U.K. and Europe, consumers shopped online for many types of items, including groceries, electronics, DIY and home furnishings. Even as brick-and-mortar stores reopened with restrictions in place, online sales have continued to rise.

For this year’s Christmas shopping season, ACI projects a 27 percent increase in global eCommerce transactions (October through December). We also forecast a 40 percent increase in click-and-collect sales.

We expect these changes to outlast the pandemic, and banks and merchants will need to adapt their business models to succeed in the post-COVID-19 world. Today, a majority of consumers expect a digital-led shopping experience, a global trend that has been accelerating in 2020. Businesses that have a strong digital presence and strategy, no matter what their size, will have the edge.

A robust payments strategy across all channels is essential

When it comes to payments, there has been a palpable shift away from cash and towards the use of digital payments. A YouGov survey of U.K. consumers commissioned by ACI revealed that 63 percent of U.K. adults had made more card payments since the beginning of the lockdown; 80 percent had made more contactless payments and 24 percent more mobile wallet payments.

The study also revealed that safety is a priority for consumers; 57 percent of respondents said that “digital payments feel safer” and 53 percent said that the shops they are visiting regularly had stopped accepting cash payments in many cases.

When asked about ways retailers can reduce the need to touch surfaces when shopping and paying for items in-store, 39 percent said they want retailers to remove minimum card spending limits, 42 percent want a greater range of delivery options with more time slots and 31 percent want more click-and-collect options.

Consumers are now more channel-agnostic than ever, expecting similar experiences through digital channels and in physical stores. Retailers should learn from the lessons of the first lockdown and make sure they have a robust payments strategy in place across all channels to keep up with demand. Now is the time to shake up checkout options: COVID has led to growing awareness of “buy now, pay later” online payment options (i.e., Klarna, Afterpay) and retailers must ensure they’re adapting to offer the payment options customers are coming to expect in-store, too.

By now, retailers should have also learned the benefits of reassigning critical real estate. During lockdown, the modus operandi has been safety and security first, customer experience second. With the majority of high street stores closed again, there will be a sharp decline in footfall. But instead of letting prime real estate go to waste, retailers should look to repurpose it to meet changing consumer demand – from click and collect to fulfilling online orders more efficiently.

Sophisticated fraud prevention is a must-have to win in a highly competitive eCommerce world

The digital swing has opened up new ways to expand merchants’ market reach by enhancing the consumer’s shopping experience. But it has also created more opportunity for fraudsters. While click and collect and paying via eWallets in-store are major draws for consumers, merchants need to increase their fraud protection measures across all channels.

The constant battle between keeping customers’ details safe and creating a frictionless shopping experience rages on. But it is possible for retailers to be sure that legitimate transactions are let through as quickly as possible with the least amount of friction. With the help of today’s sophisticated fraud prevention and monitoring solutions, retailers can win the battle — with a multi-layered fraud strategy that uses a combination of consortium intelligence, profiling, machine learning and rules. Such a strategy will allow businesses to separate legitimate customers from fraudsters and increase their conversation rates.

Ultimately, while this has been a challenging year for merchants and the retail industry, there is some light at the end of the tunnel. By having a strong digital presence and a robust payments strategy in place — and ensuring that fraud prevention measures are robust across all channels — retailers can adapt to the new world of shopping and succeed in the new year. That’s a New Year’s resolution we can all get behind!

Find out more about how ACI delivers seamless, secure payments across multiple merchant shopping channels with ACI Omni-Commerce.

VP Sales, SaaS Solutions

Andrew leads business development efforts in Europe for ACI’s Saas Solutions. His strong track record in the payments sector spans omni-channel payments, card acquiring, Card Not Present fraud solutions, POS & ATM outsourcing, prepaid card solutions and security printing. Andrew is highly attuned to the changing needs of European merchants, and the role of payments strategy – and payment technology – in securing success for these merchants.