How Pure Play Businesses Pivot to Stay in the Game
With more online shoppers since the pandemic, businesses are needing to pivot to ensure they have the best payment methods for their new global consumers.
Looking back over a few years since the beginning of the pandemic, we have witnessed some significant trends arise globally from businesses and consumers alike. Most notably, we have seen a massive rise in the adoption of online purchases – from all demographics. The service industry scrambled to go digital and offer takeout or delivery options. Governments were unable to issue building permits or car registrations. Sports teams had to rely solely on digital streaming services, and the list goes on and on. Businesses that were not able to shift to a digital model struggled to recover.
Let’s dial into the online retail space for a moment. We saw a massive boom in sales, higher conversion rates, new business models, and new technologies. The overall industry was experiencing consistent BFCM (Black Friday Cyber Monday) sales levels for months on end. Even with massive supply chain constraints due to warehouse closures, consumers had nowhere else to spend their money. They had to rely on ecommerce to get the goods and services they needed. This became the new default for everyone, no matter the demographic.
At this point, it is pretty widely accepted that the industry gained a few years of innovation in just a matter of months. Still, as we come back to in-person events and shopping, there are some interesting takeaways we can learn from.
Fortune favors the bold, especially the early adopter
Without a doubt, the pure-play retailers were the incumbent. The entire focus of their business model is geared towards seamless shopper experiences and effective delivery methods on their digital platforms. However, even with business booming and being the best positioned to handle it gracefully, they struggled to keep up with the accelerating influx of global consumers.
Every industry struggled and some weren’t able to recover
Like restaurants, traditional brick-and-mortar stores were forced to quickly transition into ecommerce to stay relevant in the new landscape. As a result, they had to find a way to maintain their loyal consumers and capture new ones. On top of that, they were hemorrhaging money into the real estate expenses of all their storefronts, which were primarily concentrated in high foot traffic metropolitan areas – the most impacted areas during lockdowns. Like JCPenney, some of these businesses never fully recovered, resulting in the closure of over 100 stores and ultimately filing for bankruptcy.
Shaken, but primed for success
The most notable shift in purchasing behavior was that of products and services generally viewed as utility items. These are the items you are more likely to pick up while running Sunday errands, not during your typical grocery store run. But, with many businesses closed and no indication of when they would reopen, where were consumers supposed to buy the items they needed?
Naturally, people flocked to the one place they knew they could purchase a product and if in stock, have it delivered to them within two days. Amazon, of course. That Prime service that has slowly been ingrained in our society as a benchmark for ecommerce finally reached its peak. Need a new lightbulb? Oil change for your vehicle? Pet food? Forgot something at the grocery store and don’t want to wait in line for another two hours? Amazon’s got you.
Even the ecommerce giant was shaken by the pandemic, especially in their supply chain and shipping departments, hiring over 100,000 temporary employees. Across the board, they came out as the biggest winner by far.
Adapting to our new reality
Obviously, nobody had any idea this was coming. We all just did what we had to to survive. Still, the real takeaway is that there was an entirely new demographic of consumers who traditionally shied away from online shopping who were forced to accept this new reality. We’re not just talking about North America and Europe either. In fact, consumers around the globe had to adapt to the new model of consumption. Of course, the digital age was an inevitable shift in our society (and will continue to happen) over generations. Still, the pandemic accelerated the growth of ecommerce to the extent that it was able to drill deep roots in a matter of months rather than years. That type of extreme behavioral shift as a human race is significant.
While the growth of global ecommerce has slowed and even returned to pre-pandemic levels since the world moved to the endemic phase of COVID-19, this new reality is here to stay. The fact remains that more merchants than ever are selling online, and, coupled with heightened consumer expectations surrounding the overall ecommerce experience, competition for every sale is fierce. Merchants who fail to focus on streamlining the global ecommerce experience and removing friction points risk being overlooked or outright ignored.
And one of the easiest and most impactful pain points to correct is how a merchant processes online payments.
Successful businesses require online payments, and online payments require payment partners
The bottom line is, you cannot be a digital business without accepting online payments. Thanks to the pandemic, you cannot be a successful business anymore without having a digital presence. You cannot be a successful digital business today unless you have a badass payments partner.
Learn more about how Reach can be your ideal payments partner by reaching out today.