The Challenge of Catering to the Anything, Anywhere, Anytime Retail Shopper
Ten years ago, retail eCommerce was a fairly simple provision; most retailers’ websites offered a small range of products with long lead times, local delivery and postal returns. Payments were mostly completed by card in the local currency, and the online customer experience was less than slick.
As customer demand for globalization has grown and retailers have expanded their geographic reach, we have seen a massive change in this retail eCommerce model. This transformation has included the addition of international currencies; the development of local language web pages; expansion of payment methods; and the adoption of ever-faster and more varied fulfilment and returns options.
Those retailers who haven’t yet ironed out the creases in their online customer experience will already find themselves losing revenue and market share. With undoubtedly more change ahead, it is vital for retailers to remain forward-looking, to adapt and enhance their online services as customer demand and technology advancements shape the future of eCommerce.
No website is an island
Of course, developing an offering that meets the needs of today’s digitally-connected consumers is by no means an easy task. There are a growing number of challenges for retailers to take into consideration when expanding internationally or improving their current operations. There’s a need for local warehousing and logistics services to support same-day or next-day delivery internationally, as well as enabling free returns in a way that suits the customer.
It’s also no longer acceptable for eCommerce to be treated as a separate channel, as customers increasingly expect to seamlessly shop across channels – transporting their credentials and even their shopping cart contents across mobile and web without interruption. Brick-and-mortar retailers have an even more complex challenge, with customers expecting to browse, order, buy and return across online and physical touchpoints – as it suits them.
Addressing these expectations around customer experience requires the ability to pull data together from across channels to give a single, holistic view of the customer. It also demands the correct strategy across channels, including payments tools and cross-channel tokenization, to help manage, analyze and use customer data to deliver a secure and fast shopping experience. Analyzing customer data can also help retailers decipher patterns around channel preference, what the customer is buying and their spend – valuable information that can help with targeted marketing and personalized customer service to increase spending.
Challenges for 2019
As we move into 2019, retailers will continue to face additional compliance challenges from GDPR and PSD2. Whether Secure Customer Authentication (SCA) is going to negatively affect conversion rates (as 3D Secure did initially) still divides opinion and it is a challenge that retailers must anticipate.
Of course, over the next year or two, Open Banking will gain momentum, which could help remove the friction that SCA may add to the checkout process.
There’s no doubt that retailers are hoping that Open Banking will help drive down the cost of payments processing, but it’s also important to leverage this opportunity to cost-effectively deliver an enhanced customer experience. The ability to potentially accept direct payments means that retailers can get cleared funds instantly – this can enable faster delivery, faster refunds and reduce fraud and chargebacks. All of which can save money and support better service.
Consumers are also driving the adoption of real-time payments. We have seen payment instruments such as iDeal grow rapidly in the Netherlands, now accounting for approximately 80% of cross-channel payments in the region. Bank transfer payments are forecast to grow by 25% YoY and become the second most popular payment method in the UK by 2021 – rapidly catching up with card payment volumes. Presenting the relevant payment instruments at the right time is critical to the customer experience and to optimizing conversion rates. These are trends that retailers must follow closely – and assessing (and deploying) the payment methods that customers want should be a continuous process.
The retail world will undoubtedly continue to digitize and consumers will continue to take more control of how they shop and pay. They increasingly expect to be able to purchase anything, at any time, through any device – and still have a brand experience that is consistent across channels. This is driving the need to switch from a siloed multi-channel approach to a true, seamless omni-channel service. This is something that retailers have to cater for in their operational and technology roadmaps, and a critical part of this is the need to invest in an omni-channel payments platform that helps drive consumer-centricity and grow revenues.
A vision for 2020…. and beyond
Adapting to change and to the increasing demands of the consumer is key. Offering the right payment choices and a slick checkout process form a vital part of this strategy. We’re seeing digitization and the ‘Internet of Things’ (IoT) grow massively and we’re seeing almost every device becoming a payment instrument – smart fridges, smart TVs, and smartphones with voice-activated ordering. Devices such as Alexa are good examples of ‘checkout anywhere’ and are quickly growing in popularity. Embracing these emerging trends and digital commerce opportunities can help retailers differentiate themselves, increase conversion rates and attract new customers by providing the experience and convenience that consumers want.
Of course, this does require careful planning and the support of expert partners, but it is a road that retailers must start on now, or risk falling behind the competition.
Interested in developing an eCommerce payments strategy for 2019 and beyond? Meet with ACI at NRF 2019 Retail’s Big Show, taking place in NYC Jan 13-15.
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