The e-commerce sector is growing, enabled by the rise of new business models based on digital technologies. Traders study in detail the world in which they operate. From digital wallets spearheading the mobile e-commerce revolution to digital currencies used within the metaverse, how consumers can pay greatly influences the experience offered by merchants. More and more brands are waking up to this fact and developing new and innovative revenue models and streams, leveraging a strategic understanding of online payments.
The beginning of the year heralds many more changes for this sector, characterized by intense competition where innovation is key and the potential gains are significant. Decryption of five development positions to watch to thrive in this context.
The tech sector in the grip of many layoffs
Ecological sustainability
At the UN climate conference COP26 in November 2021, 130 retailers including Burberry, H&M and Nike pledged to cut their emissions to half of 2019 levels by the next decade, a 30-year pledge. % higher than their previous commitment. It is possible to see several retailers including ecological sustainability and ethical supply chains at the very top of their list of priorities for 2022. Millennials prefer sustainable brands, so retailers are acting in the interest of all by prioritizing the concept of sustainability at the dawn of this new year.
So what might this progress look like for merchants? While many are investing in carbon offsetting and other large-scale projects, there are also other policy changes with significant effect. Retailers are increasingly looking for ways to combine the resale and rental sectors to ensure their products are in circulation for longer. Payment also has its part to play in this approach, for example the deferred payment options “Buy now, pay later” (BNPL) which make it possible to make ethical and sustainable products – often offered at a higher price – more accessible to everyone.
The successful adoption of social commerce
As more consumers can now discover the services offered by merchants through social media, whether through advertisements or content creation, the way people interact with their products is changing. European investors and merchants continue to grow their adoption of social commerce, especially as European consumers would seem very likely to embrace this trend en masse once it is adapted to them.
The human dimension of e-commerce is essential, as is the seamless experience that social media platforms seek to ensure. It’s for this reason that integrating shopping methods and payment links are increasingly being used by brands to convert potential buyers into purchasing customers, through an in-app, in-app experience. both fluid and secure.
Yet, where opportunities exist, opportunists also exist. And with the rise of social commerce, an ambient skepticism has also emerged among consumers, who sometimes doubt the veracity of the facts put forward about brands on social networks. To earn the trust of skeptics, brands will need to collaborate with reliable partners and invest in robust technical solutions to ensure that every part of the transaction process is secure.
Optimization and diversification of payments
Rather than remaining passive, brands are better off actively investing in innovative or improved payment technologies that drive more sales through the digital checkout process, while avoiding fraud and chargebacks.
Indeed, payments are essential to support merchants’ growth ambitions in new markets. Since most consumers will abandon their cart if they can’t pay with their preferred payment method, payment diversification strategies will be vital for brands to drive more sales. In addition to local payment methods, merchants can also favor the integration of BNPL options, digital wallets – including those compatible with cryptocurrencies – and QR codes. Payments via digital currencies or even the sale of digital assets like NFTs could be offered as a payment option.
The fight against fraud and cyber-risks
As criminals become increasingly adept at fraud methods, brands will need to reduce the risk of fraud and cybersecurity breaches through optimized data analytics technologies and solutions. In 2020, card fraud cost e-commerce professionals an estimated total of $35.54 billion worldwide. This type of fraud was already increasingly common before the pandemic, but its rise has since been considerable.
With the increase in the number of frauds during the year 2021, e-commerce professionals are looking at several solutions to combat this scourge. Minor changes like website encryption, regular software updates, and stepping up the authentication process can all make a huge difference. As competition in the industry evolves in the future, the strategy adopted by brands against fraud will crucially determine their place in the global e-commerce market.
The potential of marketplaces
According to figures from McKinsey, 50 to 70% of online commerce should take place on marketplace platforms by 2025.
Indeed, marketplaces grouping special offers or unique items sold second-hand can see the benefits of the high demand linked to certain specific situations. And e-commerce professionals are feeling these pressures, as the potential loss of market share to these platforms is a major threat. But perhaps this challenge is actually more of an opportunity for brands planning to sell more of their products on third-party marketplace platforms in 2022.
As competition between independent sellers targeting the same customers on these marketplaces intensifies, brands may seek to expand their digital presence to other platforms to maximize their scale.