Andrew Torre, Visa’s regional president for Central Europe, Middle East and Africa, shares perspectives on how post-lockdown retail trends are creating new opportunities for online merchants on the path to recovery.
This year’s holiday shopping season has taken considerably greater global significance with retailers of all sizes, sectors and geographies seeking a welcome boost during this uniquely challenging year. Optimism abounds that festive spending can remedy some of the painful declines merchants experienced during lockdowns, while providing a barometer of confidence as we enter the new year.
While most bricks-and-mortar stores across Central Europe, Middle East and Africa have felt the impact of restrictions this year, eCommerce momentum continues. For example, Visa recently published the COVID-19 CEMEA Impact Tracker highlighting the effect the coronavirus pandemic has had on commerce for consumers and small merchants in Nigeria.
Nigerians started shopping online for the first time for essentials. 71% of consumers surveyed said that COVID-19 led to their first online grocery purchase, while 69% made their first online purchase from pharmacies. Overall, the report points to a shift towards online commerce, with cash transactions replaced by digital payments. Immediately following earlier lockdowns, we saw a similarly consistent move online in many geographies, from Moscow to Maputo, and Lahore to Lagos.
As consumers stayed home and merchants remained shuttered, online became not just a convenient way to shop, but often the only way. These behaviors have since persisted. More people are now shopping online, and those who already had experience with ecommerce were buying a larger range of goods and services online. This presents enormous opportunity for merchants looking to engage with consumers. It also marks the start of a new era of eCommerce, where a merchant’s speed of response to changing consumer behaviors is ever more essential.
Payment experiences remain at the heart of this evolution. Having an online presence isn’t enough. Consumers rightly expect speed, safety and convenience in how they pay and that experience is a key driver for whether they will stay and return. Here are five of the defining features for this renewed period of online opportunity:
Right experience, first time: Necessity brought many people online, but the quality of experience will keep them there. Recent research showed 81% of people are willing to pay more for a positive shopping experience, whereas 67% who abandoned their online cart never make the intended purchase. With so many people now online, we need to make those visits flawless – from finding products to frictionless payments.
Delivery opens new doors: Retailers need to ensure delivery and fulfillment is as seamless as the point of order. Cash-on-delivery is fast being replaced by contact-free options driven by consumer and employee demand for hygiene and convenience. This is an area of great innovation with new mobile and online payment solutions – from card-on-file to using smartphones as payment terminals – offering improved, more personalized and faster online and real-life experiences for shoppers.
Buy Now Pay Later (BNPL): Meeting consumer expectations for new flexible ways to both pay and finance purchases is essential in a post-recovery world. Installments are growing in popularity, giving consumers the option to divide total purchase amounts into smaller payments without fee, alleviating the stress of larger purchases, and helping retailers expand sales and grow revenue and loyalty.
Shifts to social commerce: Online marketplaces offer fast and convenient platforms for small merchants to quickly and effectively reach consumers on the social media platforms where they already are. Facebook, Instagram, Google and other platforms provide new online services and opportunities to embrace social commerce, meaning it has never been easier for merchants to come to consumers, rather than expecting consumers to find them.
Broader acceptance: Consumers will fast abandon purchases if a familiar, trusted payment method isn’t available or they don’t feel secure. Merchants need to respond to how consumers want to pay by adding payment options such as cards and “pay” buttons. Services like Visa’s Click to Pay removes the hassle of entering payment details for each transaction, while tokenization and secure remote commerce are increasing security and reducing friction, replacing sometimes cumbersome checkout forms.
While 2020 has been an incomparably difficult year, it is also one which has shed light on clear future opportunities for merchants of all sizes. Moves to digital payments we would typically see over a number of years have accelerated into a few short months, and many of these behaviors are here to stay. While more merchants than ever have an online presence, it will be those who are first-movers and who remain in-step with changing consumer demands that will remain best placed to reap the greatest rewards, and emerge even stronger from the disruption and complexity.