Take a look at the top e-commerce companies today. Amazon and Google make the cut, of course, but so do many brick-and-mortar retailers and grocery stores. Whether by design or circumstance, nearly every business is now an e-commerce business.
In 2020, merchants of every size shifted quickly to digital business models and accelerated their e-commerce strategies. Contactless payments, online ordering and curbside pickup were just the start for consumers insisting on omnichannel digital experiences, especially in a socially distanced world.
But a true omnichannel experience, in which every touchpoint is connected on every device, is exceedingly difficult. As the boundaries between physical and digital commerce blur, merchants face the heightened challenge of integrating systems, inventory and data-driven consumer experiences.
In the coming year, meeting those high expectations will become increasingly entwined with several industry priorities. Here are three we're watching in 2021.
As the boundaries between physical and digital commerce blur, merchants face the heightened challenge of integrating systems, inventory and data-driven consumer experiences.
1. Strategic Use of Data Analytics and Artificial Intelligence
Consumers are used to curated, personalized experiences. While scrolling through Instagram, they want to see only what interests them and, in a few clicks, purchase a featured item. They expect to see suggestions for helmets and skateparks when they buy a skateboard online.
Those expectations for exceptional, just-for-me customer service apply to in-store experiences, too. Robust, strategic use of data and analytics helps merchants better understand customer preferences and meet their high expectations.
Even merchants without Amazon's data capabilities and scale can use data analytics and artificial intelligence to determine shopping patterns and interests, make intelligent recommendations and predict future purchases. Identifying patterns in payment data can help merchants better understand the types of shoppers who are coming to their store, how and where they're making purchases, and how best to market to those consumers, including those who aren't in a loyalty program.
Merchants also use data to better understand and manage payment operations. Monitoring and understanding data can help companies improve their chargeback performance – a priority for any business. Analyzing data and employing intelligent retry logic can optimize authorization rates and reduce false positives. When a payment fails, changing a few data points, such as the date a payment is withdrawn, often improves authorization rates.
2. Next-Generation Experiences
Today's commerce experience is all about meeting people where they are and making lives easier. Shopping at a warehouse club? Use scan-and-go technology to avoid the checkout line. At the pump? Say “Alexa, pay for gas” to pay through an app or Alexa-enabled vehicle.
And while dining, scan a QR code to order food, pay your tab and add a tip. It may not be new technology, but the QR code is having its moment in the pandemic, fueling touchless order and payment processes that are safe, convenient and cost effective. Retailers are also using QR codes, often to combine payments, loyalty programs and discounts. The technology's ease and accessibility are also attractive to the health care, travel and hospitality industries.
Connected commerce experiences are also moving to the mainstream. Found a hair stylist you like on Google? Book an appointment right there. Or you can browse menus, pay for takeout or book a table at a restaurant – all from a digital storefront built on Google or another app.
Today's commerce experience is all about meeting people where they are and making lives easier.
3. Simplifying the Commerce Experience
Merchants aren't just selling commodities now. They're in the payments, logistics and financing business, too. Making complex processes work, while also providing a seamless consumer experience, can be difficult.
It requires integrating inventory, menus, point-of-sale technology and other back-office systems for online and offline experiences. When an item is purchased online but returned in-store, for example, does the inventory update accordingly? As simple as that sounds, it can be complicated for retailers.
Consumers want the experience they're used to online – digital, fast, convenient – to be mimicked offline. While shopping in a store, they expect to use an app on their phone to locate items, apply discounts and pay at a kiosk or with scan-and-go technology. And whether online or offline, consumers expect their experience to be personalized and customized.
In 2020, merchants' fates rose and fell on their resiliency, their ability to think differently. Those able to pivot to enhanced consumer experiences, innovative payment strategies and connected, omnichannel commerce found success in a changed world. 2021 will surely bring more of the same.
As companies launch new products and services, they're thinking beyond single channels. They know that every added experience, new system and enhanced capability needs to work in the store, in the app and online. Getting that omnichannel experience right will be our industry's highest priority in the coming year.