Adriana Screpnic, Content Marketing Specialist at G2A PAY tells PCM some key customer behavior trends and how companies can benefit by adjusting their business strategies accordingly.
Speed, efficiency and convenience. These are the main keys to customer satisfaction in our fast-paced, digital-driven society. The statement, as in any other field of activity, is as relevant in the payments and eCommerce space as ever before.
Consumers expect money to move as fast as information, be available in real-time and safe to spend. What’s more, they will easily forget any interaction with merchants, unless the latter provide a customized, uncomplicated and valuable shopping experience. In addition, apart from their high expectations and little patience, industry regulatory updates, coupled with advances in technology, logistics and trust have created a new context, which has led to the reinvention of consumer habits.
The result? Focusing on the right product mix is no longer enough for merchants to attract the new wave of consumers. There is also more to payments than the card customers carry in their wallet or the mobile app on their smartphone. Just the same, there is more to an effective eCommerce strategy than merchants’ choice to add credit cards and/ or PayPal to checkout and calling it a day.
With the rise of the “on-demand shopper” and the presumed decline of the shopping mall, we have entered an era no longer restricted by a single location or channel, but rather defined by the entire shopping experience. In this scenario, in order to thrive, not just survive, merchants have no other option but to adapt and deal with higher complexity in addressing customer demands.
Here are some of the key customer behavior trends and how companies can benefit by adjusting their business strategies accordingly.
1. Shifting shopping channels
The current unprecedented growth eCommerce is going through, coupled with changing customer preferences, have reshaped the traditional business models of retailers. As part of their online buying decision process, consumers are switching channels and devices that best suit their personal convenience. Thus, retail has gone beyond store, laptop, mobile, border and even language barriers.
It has become impossible to discuss eCommerce without mentioning m-commerce, as these two sectors have become so closely intertwined. As recent data suggests, the growth of m-commerce has been tremendous and the trend is set to continue. In fact, m-commerce is expected to account for 45% of the total US eCommerce market by 2020.
Interestingly enough, a recent PwC study indicates that brick-and-mortar stores have still remained a key shopping location. By 2015, only 36% of respondents said they shopped in a bricks-and mortar store on a weekly basis. However, the last 3 editions of the PwC survey indicate an increase in percentage, from 40% in 2016 up to 44% in 2018. ‘Order online, pick up in store’ choices are among potential factors that have maintained the popularity of retail stores, the same research shows.
With consumers shopping across so many different channels and devices, merchants must be committed to knowing their consumers both offline and online in order and bring an appealing perspective to the table.
2. Alternative payments still in the spotlight
It is no longer a secret that eCommerce can grow at a faster rate if payments are made more widely available, but simply relying on few methods to make all purchases online is not enough. The complex variety of payment methods and the specific context their usage implies – per target, demographic group, payment context, vertical and location – have created a diversity most welcome by consumers, which encourages them to initiate payments without hesitation.
Industry experts have been vocal about the growing popularity of alternative payments to the detriment of credit cards, which has resulted in an increasing perception that there is a ready market among merchants and consumers for these methods. According to recent data, by 2021 over 50% of all online transactions will be made using alternative payments.
With cash (almost) no longer king, consumers are leveraging the wide range of payment options. Therefore, it’s more important than ever for merchants to get ahead of the game and hone their digital transformation strategy, streamline customer experiences and operational processes to take their business to the next level. Against this backdrop, the role of alternative payments within the merchant environment has changed: they are no longer strictly transactional in purpose, but rather a key instrument in merchant strategies to meet consumer expectations and address local preferences.
3. “There is a little Millennial in each of us” – Mark Larson, KPMG
Millennials, the largest generation of smartphones users, represent a customer segment for whom shopping is an indispensable part of life. They are price sensitive, know technology better than any previous generation, use mobile to manage key aspects of their financial lives and depend on apps on a daily basis.
They tend to be omnichannel-oriented and often turn to social media for product reviews or recommendations. And they’re typically willing to buy online, where prices are often cheaper than in local stores and product selection may be broader. However, they are not among the biggest digital buyer segments, as they still enjoy the experience of shopping in physical stores.
When it comes to their eCommerce expectations, Millennial consumers ignore stores that don’t cater to the experiences they expect, look for retailers that keep prices low and offer free product deliveries. Almost 58% of Millennials stating that this is the most influential purchase factor, followed by coupons and discounts.
Providing a level of transparency about products or prices on all channels, a mobile-commerce-first strategy, using creative video, constantly publishing on social media, and knowing when to market to their millennial shoppers, are some of the ways merchants can create a Millennial-friendly eCommerce experience.
With the emergence of smartphone-enabled, contactless and/ or alternative payment methods, merchants have come to realize that they have an overwhelming array of choices when it comes to payment methods to support. Investing time and effort in monitoring the shopper behavior is a must, to ensure they can provide the products consumers want, exactly when and where they want them. To that end, merchants pursue various strategies, including bricks and clicks, omnichannel and cross-border approaches.
Understanding shopper behavior is always crucial in creating a business strategy that boosts conversions and increases revenue. It is the only way to thrive in an industry that must tailor its offerings to select customers, having to change the value proposition to allow the customers to become increasingly proactive in their purchase decisions.
About the author
Adriana Screpnic is the Content Marketing Specialist at G2A PAY. An experienced editor, reporter and writer, Adriana Screpnic has been actively involved in covering online payments and eCommerce-related topics, taking on diverse and challenging tasks ranging from market research to writing in-depth analyses and feature articles and becoming involved in large-scale, industry-specific research and content creation projects.
About G2A PAY
G2A PAY is an online payment gateway accepting 200+ global and local payment methods – assisting businesses on their growth path. We provide the tools needed for businesses of all sizes to offer a seamless and localized checkout experience to end users.