Mollie, the European payment service provider, has published research unveiling the state of payments in retail today as well as the challenges and opportunities in the retail market following a turbulent year.
The findings, based on responses from 2,500 European retailers also highlight the difficulties retailers face in e-commerce environments.
For example, when asked the biggest challenges in online retail, 65% retailers cited converting shoppers to purchase, 43% rated high costs for shipping or payment providers and 41% selected low margins. And for a third of online retailers (34%), cart abandonment is the biggest challenge with 30% reporting that 6-10% of carts were abandoned.
Additional key findings include:
- EU and UK merchants rely on a multitude of channels to sell: As bricks and mortar shops closed their doors, online has become far more important. Specifically, 46% of all revenue now comes from an online webshop. And on average, 37% of sales occur via third-party marketplaces such as Amazon. Finally, as much as 16% of annual revenue now comes through social media platforms like Instagram.
- Two-thirds of retailers had revenues impacted by the pandemic: The pandemic has had both a positive and negative effect on retail sales. 23% of merchants saw sales increase last year. Conversely, 29% either saw no change or had sales decrease somewhat. And 17% saw sales decrease significantly. Of those who reported an increase, revenues went up on average by 29%. The average decrease in revenues was 27%.
- Issues with the payments process can hurt sales and growth: 31% said that an issue with the payment service offered or the range of payment service options provided was the reason for abandoned carts. 41% cited a lack of innovation in payment systems as hindering growth.
- ‘Buy now, pay later’ now offered by more than a fifth of retailers: With many consumers looking for more flexible ways to pay during the pandemic, 22% of retailers now offer ‘buy now, pay later’ or Apple Pay payment methods. And 20% offer Google Pay. This is set to increase with 31% looking to improve payment systems to help grow online revenue within the next 12 months.
“The retail sector has had a difficult year and this is reflected in the findings which expose a multitude of challenges and areas for development,” said Josh Guthrie, UK Country Manager at Mollie. “As the market also comes to terms with the Brexit deal, the ability to adapt and grow under pressure is paramount.
To weather the storm, retailers are smartly looking to offer consumers a broader range of payment options to improve the checkout experience and cut cart abandonment. By embracing this digital innovation, merchants can help bolster growth and ensure that 2021 is a better year for sales and revenue than the last.”