Global Retail 2018: A year of big changes
1. What have been your top 3 highlights of 2018?
It’s been such a good year for global retail, it’s hard to pick out just three. But if I had to, I’d probably say:
- Social commerce is a big one. It’s become the fourth channel to drive sales, after online, mobile and store. The increased choice in channels has meant it’s also getting more complex for retailers to define effective shopper journeys. And it’s something that is likely to remain challenging in 2019.
- Secondly, I’d say it’s the way that traditional retail is being redefined. We’re in the middle of a retail apocalypse where if retailers don’t adapt fast, they won’t survive.
- Finally, it has to be the growth of technology as a solution to tackling problems. We are seeing more retailers reaching out to technology companies to address the change needed and this can only benefit shoppers and retailers alike.
There have been lots of other highlights, but those are probably the three having the biggest impact.
2. Worldpay and Vantiv merged at the start of the year: creating one of the world’s largest acquirers. How does this benefit global retailers?
In a nutshell, it comes down to data and expertise. We currently process $1.5 trillion in transactions globally. This combined with our expertise in payments and the investment we’re making in Artificial Intelligence to develop our Intelligent Payments suits makes us, in my opinion, unique in the market place.
3. We also welcomed Paymetric to the Worldpay family this year. Can you tell us more about this?
Our partnership with Paymetric is a real gamechanger in retail. At Worldpay, historically, we have focused on the D2C (direct to consumer) channel. Our payment proposition has been always defined around the user experience and helping retailers maximise conversion at the checkout.
Paymetric, on the other hand, have been focusing on working and specialising on the B2B channel. Payments in this channel are evolving massively and there are major inefficiencies and security concerns in most of the back office systems - and Paymetric addresses these.
As most of the B2B merchants already have, or at least are considering, a B2C channel to sell directly to the end shopper, combining the Paymetric and Worldpay proposition has given us a unique place in the retail market. It’s very exciting.
4. We’re predicting that global POS payments via eWallets will grow by 12% over the next 4 years. How can retailers maximise on this opportunity?
The days where online was looking to replicate the in-store experience are long gone. Right now, the shopper is so savvy that the retailer needs to combine the best of both channels to meet to shopper expectations.
Online we have seen that eWallets have been the preferred payment method in the last couple of years globally and now this is becoming a reality in store as well. eWallets are most used in Asia Pacific, mainly China, with AliPay and WeChatPay having the largest market share. Recently, we’ve seen them also expanding quickly into Europe and US, levering the growth of Chinese travellers that like to shop abroad. They’re also riding on the wave of Chinese expats living in foreign countries. According to China Daily there are 50M Chinese living overseas who are familiar with these payment methods.
5. The 2nd Payments Services Directive (PSD2) has been a hot topic this year. What impact do you think it will have on retailers?
The objective of PSD2 is to drive more innovation, competition and security, or less fraud.
The biggest impact for retailers will, in our view, be around the regulatory changes to reduce fraud that will have a direct impact to the customer experience.
With PSD2, more electronic payment transactions in the EU will need Strong Customer Authentication (SCA) which is all about protecting the shopper, but of course means an additional step in the conversion funnel.
There are 2 main things retailers should be thinking about:
- Reducing their fraud – as there will be exemptions to SCA for low risk transactions, measured by the issuer and acquirer.
- Biometrics – as this can be a very seamless authentication factor for your shoppers.
Many businesses are worried about PSD2, but at Worldpay we believe it offers merchants some opportunities – and is something that should be welcomed. You can find out why in our Guide to PSD2.
6. Our 2018 Global Payment Report predicts that mobile commerce will overtake desktop in 2023. What opportunities does this present retail businesses? And what should they be doing to prepare?
To be honest, in some countries like China (where ecommerce has never really existed) m-commerce is already bigger than ecommerce. And this is also the case in countries like the UK for sub-verticals like fashion.
It is easier said than done, but retailers need to ‘Think Mobile First’. This is as much of a cultural change as it is a technology one. The mobile screen size is way smaller than the laptop one, so retailers need to think and define priorities for their real estate across the whole customer journey
But the most important part is once again at the checkout. Your shopper has already selected the product, is in his/her basket and is ready to pay. Retailers need to make sure their checkout is seamless and as frictionless as required. Very common errors we keep seeing over and over again are:
- Making the shopper have to enter too much information, too many times;
- Redirects to payment methods;
- Messy display of payment methods, where the shopper can’t find their preferred option
Make sure you are addressing those issues yourself, or asking your payments provider to give you alternatives like single-click APMs, Intelligent Account Verification, Account Updater, mobile-first hosted payment pages, etc.
7. Is omni-channel still important in retail? Any retailers you think are nailing this?
How can it not be????!!!! This is such a transformation in the way retailers interact with their shopper. It will be a very long time until everyone nails it and we can move to the next challenge! ;-)
We think that we are still going to see some more apocalyptic news in 2019 about retailers closing stores and going bankrupt in cases where they weren’t fast enough to adapt. While on the other hand, other retailers will continue to gain market share.
It is hard to say who is nailing it, but if I need to pick one it will be Alibaba. I encourage people to take a look at how they used the ecosystem in China Singles’ Day; around the concept of New Retail with around 200,000 smart stores, Lazada, (recently acquired by Alibaba) and their customer service chatbot. This year they generated $30.8bn in GMV, 27% more than last year, it is a beast …
Are there any retailers doing cool stuff?
"The best examples I have seen lately are using Augmented Reality to virtually bring an object to your home, see how they fit and ultimately reduce returns."
8. You recently presented a session on social commerce at Rethink APAC. What advice would you give to a retailer looking to execute this?
With 3.1bn active social media users across the globe, it is inevitable that it will affect how shoppers buy and what they buy. Retailers need to start thinking about how they can use it as a viable sales channel.
First, you need to select which platform, or platforms, you want to use. There is quite a long list of social platforms out there, but we saw that Facebook is the largest one pretty much everywhere in the world, except China, where home grown platforms like WeChat lead the market.
Then, see how you can move your shoppers from engagement to purchase. And for this there are again a list of shopable features available. I talk about Buy buttons, Shopable content and partner plug-ins. Make sure you understand the objectives you want to achieve and then select the best solution for your company.
9. What are your top predictions for 2019?
It will continue to be a really tough year for “traditional” retail. Retailers are now realising that adapting doesn’t mean that they talk about Single customer experiences or single customer view. Or, in more sophisticated cases, they use technology to try and adapt to meet shopper expectations.
It is a much bigger, major change. It is a cultural change. “Traditional” marketing teams need to change to digital marketing. “Traditional” IT departments need to change to a more proactive role. Pretty much every team needs to change. I believe we will be seeing more change in Senior management of “traditional” retail picking leaders from the digital world.
10. Are there any retailers doing cool stuff? Who are they – and what are they doing?
There are many! The best examples I have seen lately are using Augmented Reality to virtually bring an object to your home, see how they fit and ultimately reduce returns.
This is extremely important for large items like furniture. Ikea and Wayfair are great examples of retailers doing this well.
So, as usual, Global Retail has seen some big changes over the last 12 months – and it looks like there are a lot of exciting developments still to come. If you’re struggling to keep ahead – or are looking to expand your business, get in touch and see how we can help.