Ecommerce in Europe is booming. In 2020, it reached $393bn and is expected to rise to over half a billion in the next few years. But we're arguably just at the beginning of the growth curve. Checkout.com's State of Retail report finds there's a substantial opportunity for innovative retailers to unlock more growth. Here are some key takeaways.
1. Use payments to attract new customers and boost basket sizes
Consumers in Europe are beginning to experiment with newer forms of payment online. While cards remain the dominant form of online payment, 30% of consumers report they're actively looking to try new payment methods.
Retailers should demonstrate that they understand their customers by allowing them to utilise their preferred payment method. This matters because 60% of the 10,000 consumers surveyed said they'd abandon their cart and use another retailer if they couldn’t pay using their preferred payment method.
Buy now, pay later (BNPL) is just one example. The payment method has gained consumer interest in the last year. This is exciting for retailers as consumers tend to buy 50% to 200% more items per transaction when using BNPL. Merchants not yet set up to offer BNPL will need to change course fast or risk falling behind.
2. Personalise the ecommerce experience
Digital retailers have to consider all fronts to dominate in the ecommerce space. While offering all key payment methods is essential, it's likely to become table stakes very soon.
So what's next on retail's radar? According to our research, it's all about a personalised end-to-end experience.
Consumers say they want to receive more personalised and customised content when shopping online. And, at the same time, they want to access more bespoke products with more choices.
Retailers should take note as digital personalisation in ecommerce could unlock $2.9 trillion for retailers within ten years, according to research by Accenture. Brands in the US are already making personalisation a top priority. But it's not the case in Europe, which is lagging behind, meaning retailers that pivot quickly have an opportunity to gain a first-mover advantage.
But personalisation simply cannot be achieved without access to granular payments data. It's the key ingredient that enables merchants to tailor all aspects of the online shopping experience.
Yet more than 60% of ecommerce retailers say they're not getting the data and insights from their current providers needed to inform the creation of personalised customer experiences. This puts them at a significant disadvantage compared to those working with a modern payments provider.
3. Make digital payments the catalyst of business-model innovation
Europe's retail landscape has changed dramatically in the past year and a half. And this change will continue. Retailers will need to innovate and rethink their business models to stay relevant and profitable.
For example, retailers that have developed subscription offerings are seeing growth with consumers who want to subscribe to receive goods regularly from their favourite brands. There is still plenty of room for innovation here. Only 21% of retail ecommerce merchants provide monthly or weekly subscription options.
Retailers will also need to consider the sales channels consumers want to use carefully. For instance, 63% of Gen Zs and Millennials say they hope to shop more frequently within social media apps. While 68% of all consumers surveyed say they’d like to visit experiential showrooms to meet brand representatives and trial products before buying online.
Get ready for the future of retail
Europe’s retail landscape will continue to transform as consumers demand new experiences and ways to engage with their favourite brands. And it's optimised digital payments that allow retailers across Europe to stay ahead of these changes, give customers the experiences they crave and generate more revenue.
That's why many of the world's leading online retailers, including Farfetch, Harrods, Shein and The Hut Group, use Checkout.com to power their payments. Checkout.com gives them access to the most granular payments data. It also provides every merchant with the dedicated support needed to optimise their payments performance to unlock more revenue, cut costs, and accelerate business growth.