With 46% of all retail revenue coming from online and 37% of that via marketplaces, it come as no surprise that, when asked the biggest challenges in online retail, 65% of 2500 European retailers cited converting shoppers to purchase.
The study by payment service provider Mollie, also finds that 43% rated high costs for shipping or payment providers and 41% selected low margins.
The study finds that, 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. 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.
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%.
Some 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.
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,” says 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.”