Consumer-merchant engagement is fundamentally changing, becoming more digital and more open. Shoppers from all age groups increasingly purchase goods and services at home, at work, or on the go, via eCommerce and mCommerce in lieu of buying from physical shops.
Before purchase shoppers learn about products through online review sites and afterwards use social media to praise or disparage them. And to complete purchases simply and securely, shoppers have a variety of payment methods and mobile wallets to choose from. This, in a nutshell, is digital commerce, the primary driver of retail sales growth in many markets around the world.
Digital commerce has been a growth opportunity for retailers and brands for more than 20 years.
But today’s demographic shifts and unparalleled advances in smartphone technology have created unique opportunities. Millennials, the generation of digital natives who do not remember a world without the internet, are now the largest segment of the US population and comprise 24% of the European Union’s citizens.
Other important changes include the facts that more people now live in cities, automobile ownership in developed markets is decreasing, high-speed internet connections are more prevalent, and smartphone ownership has exploded.
The net result of these shifts is that digital commerce is consistently growing 10% to 20% annually, while in-store sales are flat or declining in some markets by as much as 5% per year. As a consequence, retailers are focused more intensely on growth through digital.
However, not every merchant has the same starting point or the same motivation, so growth strategies vary. This paper, a joint offering from ACI and First Annapolis, presents five growth paths, with the aim to inspire readers to exploit the opportunities that come from digital channels.
Although winning strategies are highly specific and no two merchants should expect the same success with the exact same approach, this paper describes common growth scenarios and illustrates how successful merchants mastered the accompanying payments challenges.
- Brick-and-mortar retailers going online for the first time
- Successful domestic online merchants that optimize eCommerce by diversifying channels and distribution models
- Multi-channel retailers investing in mobile
- Domestic merchants expanding internationally
- Digital merchants delivering omni-channel experiences and expanding into point of sale
“Digital commerce creates many unique challenges relative to in-store commerce and it is imperative that merchants expanding into or within digital commerce have the right payments platforms and partners to solve these challenges,” comments Joel Van Arsdale, Partner,First Annapolis.
“Merchants and their partners must also evolve over time from prioritizing speed to market to optimizing the trade-offs between conversion and fraud. Leveraging open technologies and building global capabilities are keys to success.”
The paradigm of payments being overlooked has changed with the arrival of eCommerce,” continues Mike Braatz, Chief Product Officer, Merchant, Biller and Risk Solutions, ACI.
Online shopping is extremely convenient, yet so is abandoning a full shopping cart before or during payment. After all, another store is only a click away and there are many things vying for our attention while we shop online. Payments, and the role they play converting shoppers into buyers, became more integral to merchants’ bottom lines and growth trajectories.”
Download the White Paper HERE