For online retail, success hinges on striking a delicate balance. Deep dive into the interplay between operational efficiency and exceptional customer experience, exploring how they drive sustainable growth.
The Quest for Efficiency in Online Retail
The opportunity
After years of focus on expansion and hyper-growth during the pandemic, Online Retailers are shifting their focus from scaling their business to unlocking additional revenue.
When it comes to online retail, efficiency is multi-faceted encompassing several key areas. On the one hand, it fuels business growth and expansion by helping you manage international, cross-functional teams, streamline complex operations, and optimize sales across diverse channels.
On the other hand, efficiency tackles complexity by consolidating multiple contracts, suppliers, and reporting methods, making everything run smoother.
But it doesn't stop there. Efficiency also plays a crucial role in risk management, allowing your business to detect, prevent, and quickly respond to fraud, protecting your revenue and maintaining customer trust.
Our research sheds light on some key trends:
Emerging channels: While traditional channels (websites, apps and marketplaces) remain prominent, new channels are gaining traction and bringing revenue. Online retailers report significant growth through social commerce (76%) and subscription services (75%).
Customer experience focus: Online retailers are increasingly prioritizing customer experience, with a significant portion offering features like digital wallets, international payment methods, and one-click checkouts.
Personalization: Personalization remains a challenge. 32% of online retailers struggle to categorize customers effectively and 27% lack the technological infrastructure for personalized experiences.
Social commerce is taking off
of online retailers reported revenue growth after enabling social commerce
of consumers used social media to buy in the last 12 months
of shoppers buy 10 times or more a month through social media
is the average people use social media to shop globally
is the average spend when buying throughout a social media channel
The solution
Payment fee optimization By offering transparent pricing and a variety of cost-effective payment methods, Adyen helps businesses minimize transaction fees and other payment-related expenses.
Fraud prevention Advanced fraud detection and prevention tools minimize fraudulent transactions, protecting revenue and reducing operational costs associated with chargebacks and disputes.
Streamlined operations Consolidating all payment needs with a single provider simplifies reconciliation processes and reduces the complexity of managing multiple integrations.
Data-driven decision making Access to comprehensive payment data enables informed decisions regarding marketing strategies, inventory management, and resource allocation, ultimately contributing to overall business efficiency.
"We need to serve the customer as much as possible by making any step not relevant to their consumer experience invisible to them. Adyen assists us in making payments a seamless part of the journey so in the end the customer is only focused on the luxury experience they’re having and not the checkout process."
Captivating Customers: The Power of Experience in Online Retail
The opportunity
For the online retailers, customer experience (CX) has become a differentiating factor. Consumers have high expectations, demanding convenience, personalization, and seamless interactions. Failing to meet these expectations can lead to cart abandonment and lost sales.
Our data reveals several key insights:
Personalization matters: 42% of consumers prefer retailers who remember their preferences and tailor the shopping experience. This emphasizes the need for leveraging data to personalize product recommendations, marketing messages, and loyalty programs.
Subscription services: 1 in 3 consumers are more loyal to retailers offering subscription services, indicating an opportunity for recurring revenue models and stronger customer relationships.
Payment options are crucial: More than half of consumers abandon their purchase if they can't pay using their preferred method, highlighting the importance of offering a diverse range of payment options including digital wallets, buy now, pay later services, and international or regional payment methods.
The rise of emerging technologies is reshaping customer expectations. Social commerce is booming, with 44% of consumers having used social media platforms like TikTok Shop, Instagram Shop, and Facebook Marketplace to shop in the past year. This surge highlights the growing importance of integrating a seamless social media shopping experience into the customer journey.
Furthermore, the demand for frictionless checkout is undeniable, with 1 in 5 consumers prioritizing one-click checkout options. This underscores the necessity for businesses to streamline their checkout processes, minimizing friction and maximizing speed and conversion rates.
The solution
Payments methods & checkout experience Convert any shopper globally by offering the right mix of payment methods per region. Create a checkout experience in line with the business' brand, reducing cart abandonment and increasing conversion in every digital sales channel (web, app, socials, etc).
Personalization tools Adyen provides data-driven insights that enable targeted marketing campaigns, help on fraud prevention, payments performance optimization and foster deeper customer engagement.
Securely store customer information Use different tools to tokenize your customers cards, removing friction and allowing them to pay in a single click. Accept recurring payments and automatically update payments data to avoid involuntary churn.
Create loyalty at checkout Offer a way to store your customer's payment details, increasing loyalty and conversion for next purchases. Offer the opportunity for your customers to do good by donating to causes in the checkout.
Subscribing to loyalty
consumers are more loyal to a retailer that offers a subscription service
of online retailers already offer some kind of subscription to their consumers
online retailers registered increase in revenue after implementing subscription services
of online retailers intend to adopt a subscription model to increase revenue in 2024
"We are currently conducting a pilot with Adyen in which we use payment data to obtain new shopper insights," says Arn. 'And that changes a lot. We are looking at how we can link online and offline data so that we can enrich individual customer profiles and improve the customer journey.
Conclusion
The Evolving Landscape of Online Retail
Optimizing payments brings direct impact on revenue and is a crucial puzzle piece in every retailers' growth strategy–and should be prioritized. By optimizing payments, businesses can experience huge financial impact, increasing efficiency and accelerating growth. Leveraging payment technology in the right way can drive strategic growth for online retailers.
Navigating the online retail landscape requires more than just internal efforts. Partnering with the right solutions providers is crucial for achieving your goals.
Comprehensive solutions: Seek providers that address your needs with a unified platform and integrated functionalities, centralizing all your payments information across every digital channel. This will bring an unified view on customers and the whole business operation.
Data-driven insights: Look for partners who provide in-depth analytics and reporting to gain valuable customer behavior insights and inform strategic decision-making.
Global reach and expertise: If you have international aspirations, choose partners with extensive experience and a global network to support your expansion efforts.
By prioritizing both efficiency and customer experience, and by partnering with the right solution providers, online retailers can unlock their full potential and secure a competitive edge in the digital landscape.