The Future of Online Shopping: commerce trends every merchant must know

Checkout process optimization

It's no secret that speed and convenience are often top of mind for consumers when shopping online. Consumers want to find what they want, order in as few clicks as possible and have it delivered the next day. 

Tapping into this consumer need and reducing friction at every step of the process — whether consumers are on mobile, desktop or tablet — is one reason that Amazon has become such a dominant player. And people will pay for the service. Today there are over 150 million Amazon Prime members worldwide, spending over $1000 a year on average.

But removing friction is easier said than done. And one area where friction often becomes especially acute — and costly — is at the checkout. 

The checkout is the most pivotal moment in the customer journey as it's when you make a sale. Despite its importance, often merchants fail to spend any time or effort focusing on this part of the customer journey or checkout optimization. And it's a conversion killer that directly leads to lost revenue. 

The good news is that fixing this step in the process isn't overly complicated if you have the right solution. Payment Service Providers (PSPs), like Checkout.com, provide merchants with a flexible range of tools to seamlessly build a checkout experience that their customers love.

Our system helps you improve your checkout flow by reducing the layers of friction that can result in dropout. For example, allowing customers to checkout as a guest is a simple method of conversion rate optimization (CRO) and easy to implement through Checkout.com. After all, mandatory account creation is one of the biggest causes of cart abandonment.

Likewise, single page checkouts are a simple change that can boost your conversion rate. By including all the necessary fields on one page, it’s easy for customers to complete their purchase, minimizing the friction that comes from having to click through multiple tabs. 

You can also offer a dizzying number of payment options through Checkout.com, a surefire way to improve the customer experience and increase conversions. By catering to your customers’ needs and preferences, wherever they are in the world, you can build trust and vastly increase the chances of a successful purchase. 

Flexible payment methods

Depending on your objectives, this may include providing 'one-click' payment options to streamline the process for returning customers. Or it might mean offering a range of different alternative payment options tailored to individual markets or customer segments.

If you're a retail brand selling primarily to millennials, you probably want to offer buy-now-pay-later (BPNL) options like Klarna. If you're selling on social or through mobile, you'll want to offer Apple Pay and Google Pay. Or, if you’re business selling in the Netherlands, for example, you probably want to offer iDEAL as a form of payment.

No matter who you are targeting, though, the demand for new payment options is growing. According to our research, 2020 saw a surge in digital payments with 50% of consumers using a digital wallet at least once in the year and 5% using cryptocurrency at least once.

56% of consumers are permanently put off a site if it is not offering their preferred payment method.

Checkout.com and Oxford Economics research

Another vital point to remember is that consumer trends aren't static. You must regularly check the pulse of your target customers and adjust the checkout experience and payment methods you offer to meet changing preferences. And that's where it pays to have a payments partner with in-depth local knowledge in your key markets to help you stay ahead of evolving payment trends.

Mobile commerce

As we stated earlier, by 2027, mobile will be the preferred shopping channel for 57.6% of US consumers. But the term itself disguises the complexity and potential of mobile for payments and commerce.  

This shift has been enabled by the advent of mobile-optimized hosted pages, such as those offered by Checkout.com, which have minimized the friction that plagued early smartphone purchasing, and in many ways have now made mobile preferable to desktop. Mobile has also given rise to customizable integrations and in-app shopping, the foundation of contextual commerce, creating more opportunities for consumers to discover and buy relevant goods and services.

However, the use of mobile wallets like Google Pay, Apple Pay, and AliPay - which allow consumers to securely store multiple payment cards for quick online purchases - is the most prominent innovation. Mobile wallets now account for 29% of all ecommerce transactions in North America. ‍

Social commerce

It's estimated that nearly four billion people use social media worldwide. That's roughly 58% of people on the planet. And since their conception, B2C brands have used social media to market their products with great success. For example, today, over 600 million people now seek out new products on Instagram alone.

45% of consumers in the Middle East prefer to shop through social apps and bypass traditional ecommerce channels.

But as social networks evolve, more and more brands are starting to use them not just to advertise their products but to sell their products directly to consumers. This is known as social commerce: a sub-set of social commerce where the end-to-end consumer journey happens within a social networking platform. And it's a market set to be worth $604.5 billion by 2027.

Social commerce is an exciting way for merchants to tap into new pools and potential customers and increase revenues. But it's not without its challenges. And one big challenge is accepting payment when somebody isn’t on your site.

That's where a solution like a payment link comes into play. It allows you to bring your checkout experience to your customers wherever they are in the digital world. So when they're ready to make a purchase, they can, without ever leaving their social app, creating a completely frictionless end-to-end experience.

Today, 40% of consumers aged 18-24 say the ability to make purchases via social media would increase their online shopping frequency. And I expect that percentage to grow in the years to come as Gen Z and Gen Alpha become a large part of the global consumer base.

The key to success for merchants in the years to come will be to understand what networks their target consumers are using and to meet them on those networks to drive sales. 

Live chats

Live chat used to be a frustrating experience for shoppers, and one that could do more harm than good. Now, however, it’s becoming a crucial tool for customer support and improving the customer experience. 

Shopify claims that 43% of customers will use live chat in the next year, with 60% of shoppers citing customer service as a significant influence on purchasing decisions. That’s because it enables brands to personalize online shopping like never before, giving in-the-moment help on products that could be the difference between making a sale or not, and providing post-purchase support that can boost loyalty. 

In-app purchases

In-app checkouts have been one of the most convenient recent innovations for consumers. Rather than having to leave a platform to visit a brand’s website to make a purchase, which causes major friction, users can discover and buy directly within a third-party, or even the brand’s own app. 

This has had a big impact on the growth of social commerce, as described above, but it’s also created monetization opportunities for all sorts of businesses, enabling the easy purchase of subscriptions, digital goods and premium content. For example, subscribing to access the content behind a media outlet’s paywall. 

Live shopping

Live shopping is the next evolution in social shopping. It’s already popular in China (now valued at $171bn), and is likely to be increasingly adopted in the rest of the world. 

Essentially it involves adding shoppable links to videos and lives, allowing influencers and video bloggers to take advantage of that moment of maximum engagement when their followers are actually watching and interacting with them. 

Reinforce trust with your customers and customer loyalty

Trust has always provided the foundation of the relationship between a business and its customers. Consumers wouldn't use a business unless they trusted it would provide quality products and services at a fair price. 

In today's digital world, establishing trust is more important — and complicated — than ever. Research from Salesforce finds that 73% of consumers say that trust in companies matters more now than before. The same study found that just over half of consumers also say that it's harder now than ever for companies to earn their trust.

Why? Consumers shopping online are concerned with getting a quality product or service at a fair price. They also care about the security of the personal information they provide to make a transaction online. 

Financial data is especially important, with RSA finding that 78% of consumers are most protective of their financial information. That makes securing the checkout — the place where that sensitive information is shared — a key priority for merchants looking to foster loyalty with their customers.

There are many ways that merchants can safeguard their customers and establish this trust. These include:

1. Ensuring that you're PC DSS-compliant — or working with a PSP that allows you to become PC DSS-compliant.
2. Providing your customers with trust triggers throughout the checkout. This might include independent ratings, like Trustpilot, regulatory badges and clearly stated returns or exchange policies. Our research finds that 71% of consumers actively look at these details and abandon their cart if unsatisfied. 
3. Using tokenization in your payment flows to store customer card details securely. This is especially useful for those businesses with a high volume of returning customers and is a prerequisite for solutions like 'one-click payments.
4. Strategically applying incoming regulations like Strong Customer Authentication to provide extra layers of security for your customers at the checkout. Yes, this may create a little more friction, but our research finds that most consumers are willing to accept that to feel secure.
   

Voice commerce

Voice commerce has been the inevitable product of consumers becoming more comfortable with speaking to their devices. Users can ask any smart-enabled device, be it a smartphone or speaker, to make purchases via their voice-assistant, which uses natural language processing (NLP) and artificial intelligence (AI) to interpret their command and take them to a relevant product page. Voice commerce is still an emerging technology, but it’s an exciting prospect for businesses as it allows for maximum speed, convenience and personalization. 

Contextual commerce

‍Contextual commerce is an umbrella term for many of the technologies discussed above, including social and voice commerce, and in-app purchases. Essentially, it refers to any shopping experience that reduces pain points by allowing shoppers to make in-the-moment or context dependent purchases. For example, when they’re scrolling through social media and happen upon the perfect product, or even when they pass a restaurant while driving and make a reservation using their voice assistant. 

Artificial intelligence and personalized shopping

It’s impossible to ignore the influence of AI on the contemporary digital shopping experience. One of its most game-changing impacts is on personalized shopping. No longer does a consumer have to be in the presence of a real shop-floor assistant in a brick and mortar store to receive tailored, responsive help and advice. For example, AI-powered chatbots can have naturalistic conversations with website visitors, learn about their preferences and even advise on sizing, color, and prices.