A new report launched by payments technology provider Tribe Payments reveals that two in five (40%) ecommerce businesses in Europe plan to open a physical store in the next three years. The report says that with governments across the continent backing initiatives to save and promote high streets, a reversal of fortunes for bricks-and-mortar stores could be on the cards.
The move to open physical stores is being driven by a number of consumer and payment trends that merchants will need to adapt to in the next five years. The report, which surveyed both online and multi-channel merchants across Germany, Lithuania, Spain, the Netherlands and the UK found that the majority of merchants believe there is an increased desire from shoppers for a better customer experience (84%), cross-border shopping (81%), to pay using multiple device types (80%) and for greater personalisation (79%).
To meet these demands, merchants recognise they must overcome some challenges. Overall, 50% of merchants say that they struggle to compete with larger chains which offer an innovative customer experience at the checkout. Nearly 50% of all merchants say regulatory compliance is a challenge, while 46% struggle to navigate consumer trends such as BNPL, multicurrency and contactless. For 27% a challenge lies with reducing fraud, with these issues being more acute for ecommerce merchants.
A third of merchants across Europe plan to overcome these challenges by offering consumers more ways to pay. Surprisingly, physical stores (13%) are leading the charge on payment methods with ecommerce (10%) players playing catch up. Just under a third of merchants expect to launch their own branded store cards, mobile apps and increase range of payment options to better compete. Expanding geographically is another tactic being considered (59%), mostly by British (88%) and Spanish (80%) brands.
“Reports of the high street’s death may be premature… or even just wrong,” said Alex Reddish managing director of Tribe Payments. “Merchants are responding to consumer demand and want to deliver a multi-channel, highly personalised shopping experience. This includes launching their own financial offerings via cards and embedded finance options. It’s up to acquirers and infrastructure partners to provide the technology and innovation to enable merchants to compete with their rivals, both online and in-store and keep up with consumer demand.”