The e-commerce sector is growing, thanks to the emergence of new business models based on digital technologies. Traders study in detail the world in which they operate. From digital wallets driving the mobile e-commerce revolution to digital currencies used within the metaverse, the way consumers can pay has a huge impact on the experience that merchants provide. 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 start of the year heralds many changes in this sector, which is characterized by intense competition where innovation is key and the potential gains are significant. Decoding of five development positions to watch to thrive in this context.
With a comprehensive European directive, France wants to protect consumers online
At the United Nations climate conference COP26 in November 2021, 130 retailers including Burberry, H&M and Nike pledged to cut their emissions in half to 2019 levels by the next decade, a 30-year pledge that is 1% higher than their previous commitment. It is possible to see many retailers including environmental sustainability and ethical supply chains high on their list of priorities for 2022. Millennials prefer sustainable brands, so retailers are working for the good of all by prioritizing the concept of sustainability at the dawn of this New Year.
So what might this progress look like for traders? While many are investing in carbon offsets and other large-scale projects, there are also other policy changes with significant impact. Retailers are increasingly looking for ways to combine the resale and rental sectors to ensure their products can be traded for a longer period of time. Payment also plays its part in this approach, for example ‘Buy Now, Pay Later’ (BNPL) deferred payment options which make it possible to make ethical and sustainable products – often offered at a higher price – within everyone’s reach.
Successful adoption of social commerce
As more consumers can now discover the services that merchants offer through social media, whether through advertising or content creation, the way people interact with their products is changing. European investors and traders continue to increase their adoption of social trading, especially since European consumers are very likely to adopt this trend en masse once they adapt it.
The human dimension of e-commerce is essential, as is the seamless experience that social media platforms strive to ensure. For this reason, the integration of shopping methods and payment links is increasingly being used by brands to convert potential buyers into purchasing customers, through an in-app and in-app experience. Smooth and safe.
However, wherever there are opportunities, there are opportunists too. With the rise of social commerce, ocean suspicion has also emerged among consumers, who sometimes doubt the veracity of facts put forward about brands on social networks. To earn the trust of skeptics, brands will need to collaborate with trusted partners and invest in robust technology solutions to ensure the security of every part of the transaction process.
Optimize and diversify payments
Instead of staying passive, it is better for brands to actively invest in innovative or improved payment technologies that drive sales through the digital checkout process, while avoiding fraud and chargebacks.
In fact, the payments are essential to support the growth ambitions of merchants in new markets. Since most consumers will abandon their cart if they cannot pay with their preferred payment method, payment diversification strategies will be vital for brands to increase sales. In addition to local payment methods, merchants can also prefer the integration of BNPL options, digital wallets – including those compatible with cryptocurrencies – and QR codes. Payments can be made via digital currencies or even sell digital assets such as NFTs as a payment option.
Anti-fraud and cyber risk
As criminals become more adept at fraud tactics, brands will need to reduce the risk of fraud and cybersecurity breaches with improved data analytics technologies and solutions. In 2020, card fraud cost e-commerce professionals an estimated $35.54 billion worldwide. This type of fraud was already increasingly common before the pandemic, but its rise has been significant since then.
With the number of scams increasing during 2021, e-commerce professionals are looking for several solutions to combat this scourge. Minor changes like website encryption, regular software updates, and ramping up the authentication process can make a big difference. With the development of competition in the industry in the future, the strategy that brands adopt against fraud will decisively determine their place in the global e-commerce market.
According to figures released by McKinsey, 50-70% of online commerce should take place on market platforms by 2025.
In fact, markets that collect specials or unique items sold used can see the benefits of higher demand associated with some specific situations. E-commerce professionals feel this pressure, as the potential loss of market share from these platforms is a huge threat. But this challenge may actually present a greater opportunity for brands that plan to sell more of their products on third-party market platforms in 2022.
As competition intensifies between independent sellers targeting the same customers in these markets, brands may seek to expand their digital presence to other platforms to increase their volume.