European e-commerce had a buoyant year in 2020. Not only did digital retailers see exceptional revenue growth, but they gained exposure to whole new markets and consumers.
It was not all smooth sailing though. 43% of merchants said they weren’t prepared when new markets within Europe wanted to buy their goods, but they didn’t have the necessary payment methods in place to capture that demand and revenue.
This means 50% of merchants spent last year expanding their localised payment offerings and many plan to continue doing so.
It has put the pivotal power of payments directly into the spotlight. But cross-border sales data also indicates that a surge in online shopping has introduced millions of European consumers to products, not available on their local shopping districts, yet easily accessible to them nonetheless.
As stores reopen consumers will find themselves tethered to the world of choice that exists in cross border e-commerce retail. And this revenue potential is set to grow for retailers who keep up.
New research by Checkout.com is a ‘wake-up call’ for online retailers, as the majority predict the shift towards online shopping, accelerated by the pandemic, is here to stay.
The study reveals that across Europe, three-quarters (74%) of consumers have no intention to significantly reduce their online shopping now that they can revisit the high street.
E-commerce retail leaders agree as three-quarters (75%) believe the future of shopping is solely online.
The data comes from the report, The New State Of Retail, which gathered the views of 10,000 European consumers and 550 senior executives at Europe’s top e-commerce retail organisations.
Progressive e-commerce leaders take advantage
In 2020, lockdowns across the world accelerated the shift towards online retail. Merchants rushed to pivot online, investing in new infrastructure and logistics to meet spikes in consumer demand.
The study shows that, as the shift towards online retail continues, e-commerce leaders recognise the importance of staying agile: 97% say that to remain relevant, resilient and profitable, they will need to evolve their business models within the next 18 months.
Merchants are taking action to ensure they keep pace with the changing retail landscape. One-quarter (25%) say they are creating new local fulfilment centres to meet demand, whilst half (50%) have responded to increased cross-border demand since the start of the crisis by expanding the range of payment methods they offer.
Yet, 60% of e-commerce merchants feel they still don’t have the payment insights needed to drive better performance.
The new wave of consumer demands for digital payments
Online shopping is now ubiquitous across European households. Consumers are increasingly seeking new ways of paying online and using financial services to empower themselves, whether this is through new solutions for credit, budgeting, or security.
The report reveals that the growing demand for new and emerging digital payments is set to soar: three in 10 (31%) Brits plan to purchase with buy now and pay later in the next 12 months.
80% of European consumers intend to use a digital wallet such as Apple Pay, Google Pay or PayPal in the next 12 months and 40% plan to do so regularly.
- 43% of ecommerce merchants lost revenue because they couldn’t offer local payment methods in countries where they saw a surge in demand. Learn why payments are now a fundamental strategic priority like never before.
- 97% of ecommerce CEOs believe the industry needs to innovate its business models if it is to stay relevant, profitable and resilient in the next 18 months. Leaders believe digital payments will be the number one enabler for ecommerce model innovation, learn why and how.
- 75% of consumers in Europe and the UK say the future of retail is digital and 30% are actively looking to try new digital payment methods in the next 12 months. 61% of consumers say retailers must invest more online if they want to survive. Get granular data about what consumers want and how to deliver.
- 59% of retail merchants don’t receive a transparent breakdown of the costs of payments and 40% say they have been significantly hurt by interchange fees in the past 12 months. Unpack the costs merchants face and how to take control.