3 Ways Retailers Can Succeed In the Post-COVID-19 World
There’s no question that the pandemic has accelerated the digital shift — from a consumer and business standpoint — that was already underway. According to research by ACI Worldwide, which tracks data from hundreds of millions of merchants around the globe, e-commerce transactions saw a 20% increase January through November 2020, compared to the same period last year. This increase has set a high bar for what is now considered baseline growth, and merchants need to adapt their business models in order succeed in the post-COVID-19 world.
The pandemic has shown us that merchants, regardless of vertical, need the ability to respond to new shifts and refocus or refine their offerings quickly. Consumers are now more channel-agnostic than ever, expecting similar experiences digitally and in stores, and retailers must ensure they are adapting to offer the growing variety of checkout and payment options customers now expect. Businesses that have a strong digital presence and strategy, whether they are big or small, will have the edge in today’s competitive environment.
To be ready for the post-COVID-19 world, merchants and retailers must consider the following:
1. A Frictionless, Personalized Experience
Digitally-savvy, mobile-native millennial and Gen Z consumers were already leading the way in adopting new customer payment journeys, wanting to try before they buy and minimize their “payments admin,” which is further driving subscriptions, recurring payments, and installment payments growth.
Even for more traditional generations of shoppers, there has been a huge surge in demand for omnichannel buying experiences. For example, buy-online-pickup-in-store (BOPIS) and curbside pickups have seen an enormous boost in adoption from shoppers across all demographics in 2020.
Industry giants like Uber, Amazon and Starbucks have also rolled out embedded payment experiences, where payment is not the culmination but rather part of the customer journey. With shoppers demanding more touchless, frictionless, personalized experiences, the trend toward “invisible payments” is likely to continue.
2. Managing Fraud in an All-Digital Environment
During the pandemic, we saw an increase in the value of fraudulent transactions, even though the number (of fraudulent transactions) has decreased. With changing customer and fraudster behaviors, plus the increased risks that come with greater digitization, merchants need to work intelligently and more proactively to optimize conversion rates while accurately blocking fraud.
Innovations like positive profiling can reduce false positives and enable merchants to quickly identify good customers from bad, speeding and securing transactions for both long-time and new customers. It also allows merchants to remove unnecessary barriers to purchase. Ultimately, a multi-layered approach of machine learning, analytics, AI and human strategies is required to address varying channels and fraud types while also staying compliant with regulations.
3. Social Payment Methods
Studies show that 67% of consumers have made a purchase after seeing an advertisement on social media. During the pandemic, 30% of consumers surveyed spent an additional 1-2 hours per day on social media. This has become an increasingly powerful e-commerce tool for merchants, especially as many retail sales continue to either occur online or be digitally influenced offline post-pandemic.
By making payment options available via social media platforms, merchants can combine the ease of online shopping with greater flexibility.
What’s Next Post-Pandemic?
The pandemic drove more consumers to seek contactless means of acquiring goods and services, whether it was getting groceries home-delivered or buying products online for curbside pickup. As a result, more retialers added these and other methods for consumers to acquire goods without having to go in-store.
As we come out of the pandemic, merchants will need to evaluate the new needs of their customers and be prepared for continued online presence with social payment, immediate payments and installment payments options, as well as digitization of the physical store — whether through endless aisle apps, walk-by checkout or pay-in-aisle checkout.
In addition, retailers must recognize the need to deliver a seamless and consistent customer experience regardless of channel, as consumers increasingly switch between channels to browse and buy. Any retailer looking to grow, domestically and especially across borders, must focus investment in these areas in 2021 and beyond.
This year, in particular, inflation and changing consumer behavior are making the holiday retail season even more unpredictable than usual. With no crystal ball, retailers need to adapt quickly so they can maximize peak season sales.