Digital commerce is a major engine of the global economy. It experienced an economic upshift during the year 2020 as a consequence of the economic slowdown that accompanied the COVID-19 crisis.
At the same time, the continued digitization of commercial and consumer transactions “contributed to even greater upward momentum than expected,” according to a report from Juniper Research.
In a survey by the Economist, bricks-and-mortar retailers have shifted to digital commerce post-pandemic. 2020 has been the most challenging year for mid-market retailers as they are “still recovering from the backlash of the pandemic in the year 2021.” Although the growth of digital commerce has slowed since the dramatic growth period of the 2000s, the overall volume and value of e-commerce purchases “continues to climb, particularly spurred on by the pandemic.”
Apart from the considerable impact of the COVID-19 pandemic, there are other drivers supporting this growth. Growth over the next 5 years will be “driven by retailers offering compelling omnichannel retail experiences that increase user eCommerce spend.” Omnichannel retail is “a model that provides end users with the ability to access retail services, including sales and customer support, via multiple channels.”
The report from Juniper Research further noted that the value of global eCommerce payment transactions will “exceed $7.5 trillion by 2026, from $4.9 trillion in 2021.” This growth rate of 55% over the next five years will be “driven by retailers offering compelling omnichannel retail experiences that increase user eCommerce spend.”
The Juniper Research report added that omnichannel retail is “a model that provides end users with the ability to access retail services, including sales and customer support, via multiple channels.”
The research predicted that these channels, including online, mobile and physical
retail locations, “will be instrumental for future success.” This is because users expect the same services “to be available irrespective of the channel.” Additionally, there are increasing appetites for new payment methods within digital commerce checkouts, “including Open Banking-facilitated payments and digital wallet one-click checkout buttons.” Accordingly, it recommended that merchants “ensure that payment options match changing user expectations, or they will be rapidly left behind.”
The report from Juniper also noted:
“China will account for over 37% of global eCommerce payments by transaction value by 2026, owing to its established and extensive eCommerce and payments landscape that provides greater convenience for users via easily accessible alternative payment methods. Additionally, the research recommended prioritizing digital wallets, Open Banking-facilitated payments and cryptocurrencies to emulate the eCommerce success experienced in China. To do so, it recommended that platform providers partner with specialists in these specific emerging payment areas to keep pace with changing merchant expectations around acceptance types.”
The report added:
“Physical goods will account for 82% of the global eCommerce payments transaction value by 2026. It urged payment providers to support BNPL, an alternative payment method that is integrates fixed instalment plans and flexible credit in eCommerce checkout options, to capitalize on the continuing growth of eCommerce due to the ongoing global COVID-19 pandemic.”