Post-COVID e-commerce trends and how they impact payments
Across Europe, COVID lockdowns and social distancing have created a retail environment where e-commerce has thrived. All demographics, across all retail sectors, are now choosing to buy online and it’s likely that behavioural changes will stick, long after the pandemic has abated.
As a result, e-commerce B2C and B2B adoption has leapfrogged forecasts – accelerating take-up levels in some countries by up to five years.
But what does this new ‘normal’ mean for European retailers? How will it impact checkout strategies and what should they look for in their payment partners?
5 key post-covid trends in online payments in 2021
Here are five key trends that will shape online payments in 2021 – and our top tips to keep you on track for success:
1. E-commerce sales are up but consumer spending is down.
European consumers continue to struggle with the economic impact of the pandemic. Four in ten have experienced a decrease in income and around half are planning to cut back on their spending (Spain 56%, UK 43% and Italy 42%). Retailers will have to work hard to get basket revenues to pre-COVID levels.
Tip: Make sure checkout friction isn’t deflating your customers’ baskets. Optimise them with mobile responsive platforms, one-click purchase for returning customers, and self-filling forms. Look for payment partners that support gateways with sales-boosting expertise and unified reporting so that you can see exactly what’s happening at the checkout and where improvements can be made.
2. Customer experience has become a key differentiator
With many more retailers adopting a digital-first strategy, competition has become intense. As lockdown eases and physical stores go live, there will be some migration back to traditional channels. E-commerce businesses will have to lock customers in with richer experiences and smoother sales journeys.
Tip: Strong payment partners can help you customise checkouts, support innovation and integration and help orchestrate multichannel journeys. Importantly, choose one with a wide payment portfolio that lets your customers pay with their preferred payment method for a smooth purchasing experience.
3. Cross border capability is still important, especially for those targeting Millennials
Globally, 57% of online shoppers buy from retailers who trade internationally. Millennials are the highest cross border e-spenders accounting for nearly half (47%) of those spending $500+ overseas in the past year.
Tip: Ensure your payment supplier is able to offer cross border payments and direct currency conversion for overseas customers. SEPA payments are also useful for B2B players looking to offer low-cost faster payments.
4. Chargebacks are leaving retailers more exposed than ever
As consumers exploit online convenience, retailers are reeling from the aftershock of rising chargebacks. It’s estimated that chargeback disputes will climb from $23 billion in 2018 to $35 billion in 2021. The majority are a result of online fraud which has increased by 60% during COVID.
Tip: Make sure your payment provider offers customised risk management that’s built for your specific business model and will assume 100% liability for all fraud-related chargebacks. Good partners will also use a combination of automated and manual monitoring and AI tools to minimise the incidence of chargebacks.
5. Security remains a #1 priority as the race to go digital blindsides fraud
Losses from e-commerce fraud will rise from $17.5 billion in 2020 to over $20 billion in 2021. M-commerce in particular is seen as a lucrative opportunity for fraudsters because many retailers haven’t adapted fraud prevention for the smaller screen or kept up to date with sophisticated attack methods. The challenge is locking fraudsters out without declining or creating excessive friction for genuine customers.
Tip: Make sure your payment provider offers up to date, enhanced and user-friendly security features including 3D Secure Authentication (2.0.), Address Verification Service (AVS) and Zero-sum account verification for Recurring or Card-on-File payments.
Post-COVID e-commerce: Navigating the next normal
It’s easy to see why choosing a strong payments partner is key to your long-term retail recovery strategy. With the right support and solutions, you are better prepared to seize opportunities, optimise your web store and ensure you are able to mitigate risk and manage compliance more effectively.
Find out how TrustPay can help you navigate new e-commerce trends successfully, whatever the future holds in store at www.trustpay.eu or via email sales@trustpay.eu.
