Merchant growth is now the dominion of digital channels. In developed markets, store-based retail sales are shrinking while eCommerce and mCommerce grow 10- 20% annually. This growth is predicated on a number of recent shifts. First, the time individuals spend online is double what it was five years ago as high-speed broadband has become commonplace. Second, smartphones have proliferated as quickly as their capabilities, including their ability to play a role in eCommerce, have exploded. And third, digitally-literate shoppers now comprise a larger proportion of the population, as the digital natives of the millennial generation have become the largest segment of the U.S. populace and a significant part of other countries as well. The movement that began more than 20 years is now basically complete; digital strategies are now the most important and sustainable paths for merchants pursuing growth.
Selling online for the first time
The sheer number of online merchants might convince a casual observer that every merchant has already taken the leap to eCommerce, but it is not true. eCommerce participation rates vary widely by market and sector. Markets such as Italy, Russia, and Brazil feature large retailers focused on physical stores as the primary sales channel, although that is beginning to change. Even in markets such as the U.S., Japan, and the U.K., where most large retailers have been actively selling online for years, convenience stores, restaurants, and supermarkets are only enabling digital channels now. No matter the level of development, every market in the world has many large brick-and-mortar merchants in the early stages of eCommerce enablement.
Merchants not yet selling online view the physical store as the heart of their business. They are experts at selecting store locations, managing front-line staff, and merchandising products. These late adopters of eCommerce often believe that the in-store experience is crucial to their customer relationship, discounting online selling’s relevance to customers. These brick-and-mortar strategies have thrived for decades but are coming under increasing pressure. Now, it befits nearly every merchant to embrace eCommerce.
Going online brings challenges, but the rewards are worth it
You have to walk before you run, and those merchants making their first moves into the digital space face a number of business challenges. Merchants must design and host their online shop, set up order management and fulfillment systems, establish warehousing and shipping relationships, provide remote customer service, and solve complex fraud challenges. Whereas EMV point of sale card transactions are highly secure and feature static operating requirements, online payments bring many new challenges which require constant learning and improvement to overcome. These challenges can all be overcome by merchants that identify and work with the right partners, including payment providers, shop systems, and everything else in between. For those merchants that are considering venturing online for the first time as their fast-track to business growth, the challenges should not deter them. The scope for growth is larger than in any other channel today.
Selling online for the first time is one of the five merchant growth paths discussed in our new whitepaper, Fast-track merchant growth paths in eCommerce. Download it at www.aciworldwide.com/merchantgrowth.