LONDON, United Kingdom — Recent research conducted by Worldpay from FIS, a payments solutions firm that processes over 31 million payments daily, found that 90 percent of shoppers are changing their purchase behaviour this year — not by choice, but rather lack of choice.
Indeed, consumers’ paths to purchase are more diverse than ever before, and payment transactions are far less standardised, potentially taking place at numerous points in the shopper’s journey and utilising a variety of technologies and business models.
“The younger generations are changing everything. Gen-Z were born online and so it is all integrated — they will push innovation and help drive this digital disruption to the next level,” said Maria Prados, vice president of global retail and B2B at Worldpay, in her opening remarks.
From social commerce through to livestreaming strategies and evolving biometric payments, successfully plotting new paths to purchase and providing payment methods that reduce friction may be crucial in retention and conversion. “It can come down to losing customers — your competition is one click away,” she continues.
The behavioural shifts driving this evolution were already underway prior to the pandemic. However, 2020 has been “the year of radical, catalytic change,” said consumer forecaster and London College of Fashion lecturer Shanu Walpita. “We’re seeing some behaviours become much more heightened and enunciated.”
Here, BoF shares four key insights from the event.
Social Media as a New Sales Channel
While social media has always been a key discovery tool and means of providing customer feedback, it is now a growing sales channel in and of itself.
“Worldpay research suggests that 53 percent of online shoppers globally are using social to buy a product. Pre-pandemic, the mobile device was already a key driver, but now, it’s really the new desktop,” says Prados. “Shopping via mobile — m-commerce — represents 50 percent of our online retail spend right now.”
Prados believes Facebook is a best-in-class example in facilitating payments in this space. “Its recent launch of Facebook Shops is impressive — an e-comm platform for any business and works across all their platforms, including Instagram. Since the pandemic, Facebook has reported a 70 percent increase in messenger users. [Now] it must consider, ‘How do you create chatbot integration and convert it into purchase without the customer leaving the space?’”
Indeed, to create successful, seamless sales channels in previously non-commercial, conversational communities requires a compelling strategy from brands and retailers alike. “The onus is on the social side of social — something that is borderless and frictionless. We want retail moments in this space to feel very human. The key is to lean into authenticity. Niche platforms such as Grailed or Depop are popular because they put the focus on the consumer and creator becoming one,” says Walpita.
Video and Virtual Selling Drive Engagement
By 2019, livestreaming sales in China had reached around $61 billion, according to mobile internet research firm iiMedia — a figure predicted to rise to $129 billion in 2020. “We’ve talked about video in commerce for a long time — as with television shopping channels, it helps to see other people interacting with the product if you are unable to,” says Prados. “Livestreaming carries video into the product experience but takes it to the next level in a more community-focused way.”
For Walpita, this represents an interesting shift away from the traditional modes of selling. “We’re seeing this buzz being built around new ways of accessing brands. Younger generations are using online virtual selling platforms such as NTWRK, while Gucci are creating in-store experiences through video.”
In the past, the payment piece has been difficult to navigate, says Prados. “Television shopping channels required shoppers to dial-up to complete the purchase, which was an awkward way to engage. Now, digital payment methods foster seamless one-click payments via Apple Pay. In China, they have taken it to the next level. [The shopper] can watch on their phone, interact with their friends, colleagues and social community, then tap on the product and have digital payment methods enable the purchase to be made right there.”
“T-mall — the luxury arm of Alibaba — offers a very impressive see now, buy now capability within their videos and livestreams,” adds Walpita. “Last year, an event attracted 87.8 million views.”
Indeed, as livestreaming capabilities gain traction, the biggest media players globally are beginning to invest. “Amazon is rolling out this functionality within its Amazon Live product, and YouTube — so far, the least monetised media giant — is also being primed to become a commerce tool with product and payment links. We’re going to start to see this innovation [at] a significant scale,” says Prados.
Frictionless Payment Is Crucial to Conversion
As shoppers have grown accustomed to shopping for all goods online, they increasingly anticipate a continuation of this level of convenience — something that Walpita refers to as “heightened attainment.”
“The old ‘buy’ button doesn’t work — particularly within social commerce. You are taking your shopper away from their online experience to fulfil a purchase. In taking the customer out of that moment, you burst the bubble,” says Prados. “You create what we call an ‘abandoned basket effect.’”
“The need for convenience ease and accessibility become an important part of the shopping experience,” says Walpita. “We’re seeing an expectation of retail to be much more nimble, reactive and fast. As shoppers become more channel agonistic, [retailers] need to consider one space that incorporates strategies that span all the new touchpoints within the shopper journey.”
Strategic partnerships can provide a means of easing payment frictions for smaller brands and retailers. “SMEs or one-person businesses should rely heavily on a partner with the appropriate existing infrastructure such as Shopify, who offer streamline payments. However, this is an ‘out of the box’ solution. More corporate businesses should consider devising their own strategies with their payment providers and bringing payments in-house to control more of the experience.”
Litmus Test Innovation
For Prados, the pandemic has spurred retail 5 years ahead in just a few months. “While it will be painful for the industry and economy at scale, the situation allows for so much necessary innovation. Payments can be an afterthought, but we are talking about the very end of your conversion funnel — it could not be more key.”
“Now is the time to invest in everything, even if you are a smaller retailer,” says Prados. “Build your USP around whichever channel is new and upcoming — better to do this than replicate what was working ten years’ ago and spend time playing catch-up.”
For Walpita, there are clear consumer shifts that drum up the desire for innovation in this space. “The main thing we crave is connectivity and social interaction and community. The pandemic has equalised all of us. In some ways, we are leaning into things that we really miss. We are at [a] pause — you have time to consider these sentiments and think about your strategy.”
This is a sponsored feature paid for by Worldpay as part of a BoF Partnership.