The evolution of payments in ecommerce

ecommerce payments

In-store is back and more tech-savvy than ever. With the likes of Amazon’s cashierless stores, not only are digital solutions adding nuance to an already blurred line, consumers are becoming highly reactive to specific touchpoints in the shopping journey (like checkout, for example).

Modern Retail spoke to Callum Campbell, CEO of Linnworks about the evolution of payments in ecommerce.

1. How are consumer attitudes changing towards convenience and being able to make quick, easy purchases?

When it comes to the overall shopping experience, convenience was a top priority for consumers even before the pandemic. As the world went contactless at the start of 2020, the checkout touchpoint in the customer journey very quickly became a focal point for retailers and consumers alike. Once driven almost exclusively by price, today’s consumers are influenced by convenience and ease-of-purchase. In fact, according to a recent study from Linnworks called The Effortless Economy: A New Age of Retail, 76% of survey respondents say convenience is now a top priority when choosing a retailer. 

New payment options offer both convenience and flexibility, and consumers expect these options to stay for good. In fact, Linnworks’ Effortless Economy study shows that 28% of consumers say they have utilized a buy-now, pay-later (BNPL) option when shopping online and 24% say they’re open to the idea of utilizing BNPL solutions. Of the respondents who have used flexible payment options, 89% say it makes purchasing decisions faster and easier. And flexible payment options promise even more growth in ecommerce as consumers opt to purchase larger ticket items online – 70% of consumers admitted to making an impulse purchase due to having flexible payment options available. What’s more, 84% say they are more willing to buy big-ticket items if they’re given flexible payment options. Now and in the future, consumers expect brands to offer flexible payment options and 79% are more likely to shop with brands if they do. 

2. Tell us more about the evolution of payments in ecommerce.

Payment innovations are a direct result of changing consumer demands and expectations. Online shopping increased dramatically in 2020, and while Linnworks found that many consumers plan to return to in-store purchasing, consumers have also become accustomed to the convenient services that were offered via online shopping during the pandemic, such as buy-online, pick-up in-store (BOPIS), and expect them to stay. Everything is now just a click away, and consumers expect the checkout process in their purchase journey to be no different. According to the Effortless Economy report, 46% of consumers will actually sacrifice cost savings for an overall convenient shopping experience, so implementing flexible payment solutions is one step in enabling a frictionless end-to-end experience for users. Additionally, customer demographics are changing. Millennials tend to be much more focused on the now versus saving money for the future, and more than half don’t have a credit card. Therefore, younger shoppers are looking for alternative solutions such as buy-now, pay-later (BNPL) which can enable their shopping habits and support convenience preferences. 

3. How can flexible payment options benefit retailers and customers?

For retailers, offering flexible payment options is a key component in enabling a frictionless purchase journey. According to Linnworks’ Effortless Economy report, 67% of consumers say they have abandoned a purchase because the search and checkout process was too complicated. Additionally, as COVID-related lockdowns pushed consumers to take another look at their finances, use of BNPL methods saw a 200% increase during the pandemic. Overall, 44% of shoppers choose BNPL specifically because it offers more flexibility than credit cards. And when it comes to fair business practices, 30% of BNPL users say they trust BNPL providers more than they do credit card companies. Ultimately, when consumers are offered more flexibility and control over their spending, they have a more desirable buying experience. Offering flexible payment options can boost customer satisfaction and loyalty for retailers in the long run. 

4. How can retailers create a seamless payment experience across different channels?

The fundamental idea is that brands need to build the operational ability to sell to their customers wherever they choose to shop – a concept Linnworks calls Total Commerce. Being able to reach their customers across multiple touchpoints can have logistical challenges for retailers. To be successful, retailers need to know and understand their customers, and create a multichannel strategy by embracing all selling channels. This gives consumers exactly what they want, which is the flexibility of both purchase and delivery options and the ability to build their own shopping experience. Retailers can achieve a seamless brand experience by leveraging tools that enable the integration of flexible payment solutions across their key selling channels. Not only does this tout consumer-facing benefits, but it also enables retailers to have a better understanding of consumer shopping habits as well as inventory and shipping needs. 

5. What are your top tips for connecting all systems to create a seamless retail process?

Consumers now want an effortless shopping journey, from discovery to delivery, so retailers need to consider each step of their transaction experience as part of their brand. This includes everything from a brick-and-mortar shop to a brand’s website to its social media channels to its marketplace storefronts. As such, omnichannel is no longer enough. Brands must not only have a multi-platform presence, but they also need to create ‘micro-moments’ to build a seamless end-to-end experience for their customers. When it comes to choosing a tool, retailers should aim to simplify their tech stack and select a solution that enables them to manage all commerce operations from one central dashboard or location. This includes inventory management, order management, payment solutions management, fulfillment, shipping and delivery management. 

6. What are the biggest benefits of having insights into inventory and stock availability?

As retailers learned from the pandemic and its impacts the industry is still coping with, such as labor shortages and supply chain issues, having insights into inventory and stock availability helps them prepare for the unknown and make decisions to still be able to meet their customer demands. If a retailer can’t fulfill orders, there is another retailer out there that can. Not only does a lack of visibility into inventory hurt current sales, it also can cause a brand to lose customers as they may feel competitors are more reliable in the long term. As we outlined in our 2021 ecommerce trends report, when shoppers looked for out of stock products during COVID, just 13% returned to the retailer’s website to buy the item, while 37% went to a different store to complete their purchase. As a result of inconsistencies with stock availability, three-quarters of consumers have tried new brands or places to shop throughout the pandemic, which is expected to continue as supply chain issues still persist. This is an opportunity for retailers with better forecasting and demand planning to capture market share. Retailers should routinely revisit every aspect of their supply chain to gain more insight and control, which will enable them to dive deeper to understand the risks across each facet, including manufacturing, shipping, retail, and fulfillment. From there, they’ll be able to rework purchasing formulas to factor in risks. They’ll find some areas where they can proceed as normal and likely some areas where they can take more risk. This will enable them to not only increase customer loyalty but also boost their bottom line. 

About Callum Campbell, CEO, Linnworks 

Callum Campbell is the CEO of Linnworks, a leading SaaS commerce platform that works with brands like Ford, Casio, Belkin and Ten Thousand. As CEO, Callum is responsible for ensuring Linnworks empowers brands to grow their business online. Prior to becoming Linnworks CEO in 2017, Callum founded Autonative, a global automotive ecommerce software and services business, where he currently sits as a board member. Callum earned a first class honors degree in Mechanical Engineering from the University of Bath. Through Linnworks’ partnerships with leading global marketplaces including Amazon, eBay, Alibaba, Google and Facebook, Callum champions the vision of Total Commerce and the need for brands and retailers to be set-up to sell to their customers wherever they choose to purchase.

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