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Build the Perfect Retail Payment Strategy: Lessons for E-commerce Business Leaders

Online retail is growing rapidly across the world. More people are buying directly from brands, and seem likely to continue doing so. This means brands must connect with customers through smooth and secure shopping experiences to enhance brand value and keep them coming back for more.

A woman making a mobile payment at a retail store

World of online retail is growing phenomenally

We are truly living in the age of global e-commerce. Rapid internet penetration and faster technology have made online retail hugely popular across the world. Every day, more people are shopping online, shaping trends and sending revenues skyrocketing. Just look at Europe. The European e-commerce market alone is projected to be worth over € 1 trillion by 2026, making it the third largest in the world, after the US and China.

E-commerce penetration rates remain very high across the region – about 80% in countries like Norway, the UK, Germany, and the Netherlands. Smaller markets in South and East Europe, like Greece, Portugal or Poland, also show great potential for growth.

In recent years, e-commerce has been the main driver for the retail sector. Over 75% of Europeans shopped online last year, an increase of 20 percentage points (pp) over the last ten years. The Netherlands (92%), Denmark (90%) and Ireland (89%) had the highest number of e-commerce shoppers in 2022. In the last decade, Estonia (+47 pp), Hungary (+43 pp), Czechia and Romania (+41 pp) also showed significant growth. The data finds that it is mostly individuals between ages 25-44 years who have a greater tendency to buy from online sellers.

Understanding today’s e-commerce consumer

Today’s e-commerce shopper is clear on their priorities. While economic uncertainties have made some more conscious about spending, many other are still keen to shop online in future. According to a 2023 PwC report, 40% of polled consumers want to increase their online spending over the next few months.

63% of shoppers, most of them being millennials and Gen Xers, prefer buying products directly from a brand’s website. What draws shoppers to buy directly from online retailers is the wider range, authentic products, better availability, and competitive prices. Clearly D2C will be a strong mover for e-commerce companies in the future, when we look at the data.

That is why brands have to deepen their connect with consumers. Lesser friction, higher engagement, and more personalization will help brands enhance the customer experience, gain access to valuable customer data and insights, and improve profit margins and revenue generation.

To reach newer audiences and build your brand in new markets, every e-commerce leader must tailor their payment strategy to match the markets they work in. Expanding payment options, using modern payments tech, and cultivating brand loyalty can keep shoppers coming back for more.

Respond with the right retail payment strategy

Embed advanced payment methods into the checkout flow
Today’s consumers live on the go. Speed and convenience are in high demand – consumers expect it. Advanced payment methods that are embedded into the checkout flow allow shoppers to skip a lengthy checkout process and pay with just a click on your brand’s mobile app or website. Embedding payments help you to design a more personalized and intuitive customer experience.

You must offer multiple payment methods in your checkout as you can widen your reach and woo more customers. It helps you increase your sales and conversion rates. Studies have found that adding multiple payment options can increase conversion rates by as much as 30%. Gen Z and millennial shoppers are far more likely to complete a purchase when the checkout is faster and they have the choice to pay with their preferred payment methods.

Smoother, faster payments help your brand to increase customer stickiness, foster loyalty, and drive repeat sales. They reduce friction in the checkout process and reduce the time between discovery and sale.

Build loyalty through seamless and secure payments
Secure payments are essential if you are to keep your customers coming back for more. Brand trust is critical in today’s day and age. You can’t risk losing it to fraud, which directly impacts customer loyalty. Consumers expect brands to protect their data and keep payments secure. Using best-in-class fraud prevention measures, therefore, is a must to be seen as a trustworthy brand.

AI-based risk management tools help you detect and mitigate advanced types of fraud in real-time. They use machine learning to constantly adapt to detect newer forms of fraud. You can customize these tools to your business and set up optimum fraud rules. With an AI-based risk strategy, you detect and prevent fraud in real-time, increase payment acceptance rates, and enhance the user experience.

Ensure you are using a PCI-compliant gateway and the latest versions of 3D Secure 2. Verifying all online transactions using multi-factor authentication (SCA) is a must, as per PSD2 norms in Europe.

Analyze payments data to draw insights
Analyze your payments data to understand your customers better. What they like, where they are shopping, how they are paying. Knowing their habits and preferences, helps you tailor your offerings to their needs. Payments intelligence is all about using data and AI to improve your payments.

Data-driven insights help you make better decisions for your business. It helps you to engage with your customers in a better way and boost loyalty. The richer the data, the more it helps you to stay abreast of local market trends and deliver more targeted marketing to your buyers.

Use smart payment orchestration
People want fast, easy, and secure payments. Hence, your payments must be designed for the digital-first generation. That starts with a smooth and secure checkout. You have to guide your customers through the entire shopping journey in an intuitive and personalized manner – from discovery to payment, with minimal friction. You have to allay their fears about fraud and offer prompt troubleshooting when they face issues with payments.

New-age payment tech helps you to improve payment acceptance rates and reduce declines. You can design more seamless checkouts and one-click payments to make checkouts simple and quick. This makes a big difference to the customer experience. No more frustrated shoppers waiting at long checkouts. Quicker checkout means lesser cart abandonment, and in turn, happy and loyal buyers.
Intelligent payment routing, payment orchestration, and working via multi-acquirer relationships – all help improve payment acceptance rates.

Using modern payment systems and technology allows you to tap into Europe’s modern payment infrastructure – from open banking to real-time and contactless payments. This helps you to be better equipped to meet the needs of digital-savvy customers across Europe.

How can Novalnet Help

We are trusted advisors to Europe’s leading brands, helping them to process payments smoothly and safely. With our technology, you can accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. Plus, our AI-based risk management solutions and advanced analytics solutions help you design the best payment experiences for your customers, all in a fully secure PCI DSS-certified environment.
Give us a call today to know more.

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