As inflation continues to rise to the worst this country has seen in more than 40 years, many eCommerce owners are planning ahead for this back to school and holiday season. It is estimated that overall retail sales in the US will grow roughly 3.5% this holiday season, less than the US inflation rate of approximately 10%.
Overall eCommerce and marketplace sales growth are estimated to grow at an even higher rate of 15-17% this holiday season, in spite of consumers having less discretionary incomes than in years past. As discussed in our last blog, consumers will be price sensitive and start the season relatively early to guarantee the best price.
But as the debate continues on what to call this economic downturn, many are looking ahead to the holiday season and wondering will consumers be able and willing to part from their hard-earned dollars for items that suppliers and retailers curated particularly for this holiday season?
Expanded Payment Options for Consumers
Many new trends have emerged in the past few years as eCommerce has been forced to pivot quickly for consumers to have access to a wide variety of purchases throughout lockdown and the pandemic. Without fintech and their innovations, many may not have been as successful.
But as eCommerce businesses approach this year’s back to school and holiday season and money is tight for consumers, fintech companies are offering several innovative options.
Buy Now Pay Later:
Extending credit to a customer to buy something now, but pay later. This is not a new concept, but unlike traditional loans, there is only a soft inquiry on the credit, meaning there is no decrease in your credit score. Installment loan brands include Afterpay, Affirm, of Klarna and their value proposition is advancing financial inclusion for people who don’t have access to traditional credit products, as well as giving buyers enhanced control and flexibility over their spending.
Increasing Payment Options:
Mobile payments, also known as “single-click checkout,” are estimated to overtake credit cards and cash by 2025, with more than 1.31 billion customers worldwide using some form of mobile payment app by 2023. Brands like Paypal and Venmo have dominated the marketplace in the beginning, but with adaptation increasing, more will continue to arise.
Chat commerce is another simplified trend where customers utilize chatbots for various services – dealing with issues, tracking a package, sending a payment link, as well as remembering customer preferences for purchases. This completely removes the need for invoicing and formal checkouts, while impowering AI-power chatbot serves to provide connection and engagement with customers.
SMS payments is another way to capture a potential missed sale by allowing sending a link to pay. Earlier in the pandemic in 2020, a survey showed that 35% of customers want to pay by text. The ability to text customers personalizes the shopping and customer experience, as well as decreases cart and page abandonment. Quick reminder texts provide the opportunity to pay in a safe and convenient way.
Benefits to eCommerce Owners
In a time when money is tight for consumers, fintech partnerships with eCommerce platforms opens up the opportunity for more spending through the holiday season.
Utilizing fintech software helps eCommerce owners to better leverage customer data collected through the purchase process. This not only helps to personalize the shopping experience, but could lead to personalized pricing options to help keep more of the sales that would typically drop off.
As social media commerce continues to grow, suppliers who are early adapters and have processes in place for alternative payment options will be able to grow and expand with the industry. There has been incredible success through Instagram as influencers promote products with direct links to online purchases—and in some cases – in app purchases.
As the partnership between fintech and eCommerce continues to innovate, eCommerce owners and customers continue to win as the checkout process becomes more and more seamless and easily connected to customers.
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As your business prepares for back to school and the upcoming extended holiday season ahead, learn more about how OPAL can streamline your business to efficiently maneuver this season.
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