Continuing our Payments Predictions series, let’s further examine three topics that had a great impact on 2016 and will almost certainly dominate the retail and payments industry this year. We’re talking about omnichannel, the Internet of Things (IoT) and data science.
As I discussed with PYMNTS at the end of last year, 2016 was the year of omnichannel commerce. It stopped being just a buzzword and turned into the new retail reality. The lifestyle of modern consumers is characterized by interconnectivity. They are used to seamlessly changing platforms and expect high-quality shopping experiences at all times. They usually have multiple interactions with brands before deciding to purchase, which makes the channels less important than the entire commerce experience. Confronted with a new set of consumer expectations, retailers have been forced to adapt to the demanded shopping experience, integrating a myriad of channels into a unified retail journey.
Driven by a chain reaction, payment operators, in turn, had to adjust to these new trends, expanding their offering to fulfill the needs of merchants looking to satisfy buyers in every commercial channel.
By either introducing Point-of-Sale (PoS) or ecommerce services, payment providers competed to offer merchants the most complete omnichannel solution in 2016. There are various strategies in the market, from building new terminals to using new software on existing terminals. Our approach is to work with terminal companies and focus on the data and payment itself, helping merchants to improve authorization rates and fight fraud. Ultimately, this gives our merchants the support they need to increase their revenue.
We predict that it will no longer be about the multitude of channels this year, but about commerce. The focus will be on using all the right channels to deliver the best unified and integrated commerce experience. Merchants will continue to heavily invest in omnichannel retail strategies to keep up with ever-changing consumer demands and expectations, doing everything in their power to be exactly where their target consumer is. Good examples are retail players tapping into social commerce and integrating apps like Snapchat to reach even the most interactive of their consumers. It turns out that the less traditional the retail efforts are, the more likely they will be to succeed and win more customers.
The Internet of Things was also a hot topic governing the ecommerce in 2016. Recent Gartner research estimates the increase of connected devices will reach 30 percent by 2020, creating a great opportunity for retailers to connect their online and in-store efforts, and ensure they stay aligned with the constantly changing preferences and behavior of tech-savvy consumers. With the help of IoT, merchants have a better chance of customizing and enriching the shopping experience, strengthening customer retention and loyalty. However, along with the opportunity that IoT creates, two threats come into the picture, namely cybersecurity and personal privacy.
No one anticipated the vulnerabilities posed by the vast amount of connected devices, and as a consequence, last year saw a massive number of attacks. This year the industry will focus on the security threat posed by IoT, and operators will work towards finding a way to eliminate this threat or at least contain it, to prevent such extreme security breaches.
The connectivity between devices can also create several threats to individuals’ personal privacy that one might not notice at first glance. One of them is virtually intruding consumers’ lives using connected devices, or the creation of unintentional public profiles bearing personal data of how the consumer is using the device. With such a high risk of privacy invasion, it’s clear that IoT has gone beyond its initial purpose of helping create personalized shopping experiences and smart living, and has begun to pose a pressing problem.
We must, therefore, effectively manage the security and privacy threats before they damage consumers’ confidence. We must take steps to ensure it does not become a danger instead of an opportunity. This is how we make IoT a success.
As we anticipated last year, data science makes all the difference between successful and less efficient retail strategies. With the help of data, merchants have the chance to optimize their conversion rates while also understanding their own market performance.
2016 was all about opening data sources and setting up algorithms, performing analytics and machine learning, and creating the proper environment for performing data analyses. The next step this year is gathering knowledge from all perspectives of processes: internal, omnichannel and IoT, to help merchants understand who their shoppers are, achieve their goals and differentiate themselves in the competitive retail market.
For merchants, it is very important to have their own data strategy, allowing them to anticipate consumer expectations and demands, optimize their internal services and achieve operational excellence.
As a data-driven enterprise, we help merchants combine and centralize data from all channels for thorough data analysis and comparison. This approach aims to optimize the entire shopping experience and showcases the features that need improvement. Based on these insights we recommend to merchants the most suitable channels for engaging with their customers and offer them seamless payments. As a result, merchants benefit from better authorization rates, improved security and eventually, greater revenues. If you would like to learn more about how we help merchants expand their business, get in touch with us and let’s discuss the goals you’ve set for this year!
Apart from Omnichannel, IoT and Data science, we observed two other trends strongly impacting the industry in 2016, which we will discuss in detail in our upcoming video report. So, stay tuned for how Blockchain and Robotics are becoming part of the ecommerce and payments landscape!