Even before the pandemic, the efficiency, speed and increased sales that ecommerce and back-end technology could bring were top priorities for retailers.
Since the first national lockdown, the emphasis has only increased. It is now online sales powering the recovery in retail – and to an extent the economy as a whole.
The week leading up to 2020’s Black Friday saw online sales 56% higher than in 2019, while John Lewis Partnership stated the trading period would break its previous online spending records, with sales up by 35% on 2019.
Many, though, remain poorly positioned to benefit, as the growing list of failing retailers since the crisis began attests.
The shift online is not new but the pandemic dramatically accelerated the move and retailers without an effective ecommerce operation do not have long to catch up.
Fortunately, the keys to success are no secret. We already know what works and the technology already exists.
An expanding base
First, retailers need to learn how to get the best out of the data their online channels collect. This will enable them to develop a personalised service and suggest products their customers actually need and want.
Online leaders, such as Amazon and eBay, have been doing this for years with great success.
Online shoppers should experience virtually what they are used to experiencing in brick-and-mortar shops. They need to find easily what they are looking for (and here an efficient use of data might help in paving customers journeys).
“Friction is the silent killer in online sales; unnecessary form-filling and steps in the checkout process are the leading causes of abandoned baskets”
Second, the sales process needs to be shorn of inessentials.
Friction is the silent killer in online sales; unnecessary form-filling and steps in the checkout process are the leading causes of abandoned baskets.
Simplicity is key. So is flexibility. Just as in the high street. Consumers need to be able to pay the way they like and that is going to be a crucial lesson as retailers adapt to the new normal.
Thankfully, open-banking technology is the silver bullet solution on both fronts.
Integration of open banking
The recent growth in ecommerce is not being driven primarily by existing online shoppers buying more, but by the customer base expanding.
More and more people are embracing new ways of shopping and new ways of paying.
Security for many of these consumers is a central concern. Open-banking payment initiation services (PIS) – allowing shoppers to issue payments directly from their bank without entering card details – will be increasingly attractive.
Shoppers still want a smooth, painless checkout process, without unnecessary hurdles or delays.
To ensure that, any new payments channel has to be carefully integrated with existing systems, and technology partners must be chosen carefully.
Most importantly, retailers need to start the journey now.
There is significant work to be done and there is not much time to do it, as retailers work to adapt to new buying habits and recover lost ground.
Leon Muis is chief business officer at Yolt Technology Services.
To find out more about how Yolt Technology Services can support your retail business to unlock the value of open banking, take a look at our whitepaper and get in touch.