Merchants combining 'local' and 'global' can best adjust to rapid digitization
To suggest that COVID-19 has transformed the future of business would be too obvious. But, in certain industries like retail, it is hard to fathom just how much change the pandemic has ignited.
The crisis has expedited society further into the digital world; technology that was predicted to be adopted in five years is now on track to be embraced in mere months.
Shoppers have been forced to go from wandering aisles to navigating websites, and we are seeing new groups of consumers embracing e-commerce and digital payment methods at a much faster rate than anyone ever thought possible. It’s important to note that these new consumer habits are taking root and will become preferences that persist long after the pandemic.
There’s unprecedented urgency for merchants to be proactive as the usage of digital payments spikes. Offering preferred payment methods unlocks a whole new world of opportunities, literally. The retailers seeing exponential growth are the ones who have tailored and localized their payments offering to a global audience.
Shoppers have heightened expectations for frictionless shopping experiences. Social distancing is facilitating the surge in e-commerce, increasing demand for digital payment methods over traditional cash and card payments.
Ahead of the virus, the world was on a trajectory to becoming a digital-first society. Some regions were ahead of others; for instance, from the PPRO Payment Almanac, 56% of online transactions in China were already conducted via e-wallets, compared to 23% in the U.S. However, now PPRO is seeing increased demand for these types of payments in every region.
The global digital payment revolution has previously been led by Gen Z and millennials, but COVID-19 has forced older shoppers to embrace digital. We are seeing increased e-commerce adoption by baby boomers; E-Marketer anticipates a 5.8% increase in the number of online shoppers 45 and older, equating to nearly 5 million brand-new e-commerce users.
New needs have sparked a shift toward online shopping and away from brick-and-mortar. For example, groceries have seen a meteoric rise in online ordering; according to PPRO’s cross-border engine, online purchases of food and beverages are up 285% since the start of the pandemic.