Everybody knows the U.S. retail arena is changing, but a new report from Checkout.com reveals that four trends, among them the growth in digital payments, currently are most affecting it.
Rising prices, consumers seeking new shopping channels, and increased competitiveness are the other three trends altering the retail landscape. United Kingdom-based Checkout.com, in a survey that included 2,000 U.S. consumers, found that 36% of those between 18 and 24 years old were likely to shop online, as were 33% of those 25 to 34. These percentages start to fall in higher age groups. It’s 29% for those 35 to 44, 26% for 45-54, and 27% for those 55-64.
Perhaps not surprisingly, most consumers—75%—contend that e-commerce is the future of retail. “U.S. consumers are confident in online shopping and they value the associated convenience and safety benefits, despite lockdowns having ended for some time now,” the report says. Fifty-two percent of consumer say they are reducing their non-essential retail spending because of higher prices.
Digital payments are growing, but credit and debit cards remain the most popular option—for now. Checkout.com’s report found that 79% of U.S. consumers plan to use a credit or debit card in the next 12 months. Yet, 13% of consumers used at least one new payment method for the first time in the past 12 months. More consumers, however, seem interested in using a new payment method, with 42% of those who had not used one in the past 12 months indicating they would been keen to do so in the next 12 months.
And, despite all the hoopla over buy now, pay later payments, fully 66% of consumers said they have not used a BNPL provider, with 9% saying they regularly do and 25% saying they occasionally use one.
As consumers look to save money when shopping, many—64%—say marketplace platforms are their preferred first choice for shopping online. Eighteen percent say they are considerably more likely to shop on second-hand marketplaces.
Just as the Earth orbits the Sun, the competitive arena for retailers intensifies each day. Some 26% of U.S. retailers say they’ve passed on rising costs to consumers, but consumers are looking for something in return. Fifty-four percent of them make free returns a priority and 53% prioritize free shipping.
“Price increases may not be easy to avoid, however, offering free or discounted shipping and returns may be a deciding factor in maintaining solid loyalty and conversion rates during difficult times,” the report says.
Against the backdrop of rising costs and economic uncertainty, there is optimism for the digital economy, Leela Srinivasan, Checkout.com chief marketing officer, says in a statement. “Consumers are emphatic that the future of retail is online. For retailers, unlocking growth is all about balance: finding ways to deliver smooth and delightful experiences while staying hypervigilant in a time of heightened fraud and chargebacks,” Srinivasan says.