What does the retail landscape look like in 2023? Adyen has checked it in its latest report. It is based on a survey of retailers and consumers from around the world, including Poland. It was realized earlier this year. In the following post, we present the main results and conclusions, focusing primarily on those regarding Poland.
Finding bargains and rewarding loyalty
The pandemic has increased consumer awareness, we already know this from other reports. However, even despite this, the Adyen Retail Report 2023 surprises when it comes to the results for Poland – almost every shopper (96%!) has changed their shopping behavior to search for the best deals as efficiently as possible. This is the highest rate in Europe. From a global perspective, 78% of consumers now spend more time searching for bargains and the best deals. This applies to both traditional stores and ecommerce.
Consumers also want to be rewarded for their loyalty – both in the form of personalized rewards and improved shopping experiences. Poles feel very unsatisfied in this regard. Three out of four shoppers (77%, up 13% y/y) believe that retailers should improve the ways they reward shoppers for buying products from them. Nearly half (47%) of Polish consumers want to receive discounts during regular purchases.
Retailers should therefore create loyalty programs tailored to individual customer expectations. More than half of respondents (53%) prefer stores that remember their preferences and shopping behavior and, based on them, offer them personalized experiences.
However, Polish entrepreneurs are still not doing the best job of meeting these expectations. More than a quarter of them do not offer a loyalty program or any other form of reward for regular customers. Fewer than 20% of retail companies use a CRM system to target their customers, and are developing systems to collect and analyze data. There is still a lot of work to be done in this field.
However, there is also a light at the end of the tunnel – 23% of retailers plan to invest in the collection of payment data along with its analysis.
Unified Commerce the path to growth
In developing a personalization strategies, Unified Commerce is very helpful. It allows to improve the management of payment data in online and traditional stores, and to draw more precise conclusions from it. It also helps to develop more efficient business strategies, and thus provide consumers with the best value for money.
What is Unified Commerce? It is commerce in which all barriers between sales channels are eliminated. Unified Commerce is beginning to gain traction in the retail industry. Retailers that followed the principles of Unified Commerce in their operations last year, reported an 8% increase in revenue. 17% of companies in this industry have been investing heavily in it for some time, and one-third are just starting to do so. Adyen estimates that if all retailers implemented integrated commerce in their operations, growth in the retail sector worldwide would reach one and a half trillion dollars.
Consumers expect this integration of sales channels. Nearly 40% appreciate the implementation of technologies that speed up the shopping process. A quarter believe they make shopping more enjoyable. Retailers around the world are responding to these needs. 35% are planning to invest in integrating backend systems with payment channels.
And what does it look like in Poland? In terms of using new technologies while shopping, Polish consumers stand out from other countries. Nearly 70% say they have used a self-checkout in recent months, compared to the global average of 41%, and one-third (33%) said they use apps from their favorite brands. The global average is 9% less in this case. What’s more, also 33% of Polish consumers would like to implement more solutions to further improve the finalization of purchases.
Thus, the business development strategy must be linked to Unified Commerce and technologies. And entrepreneurs in our country have something to strive for. If all companies in Poland that are not yet using Unified Commerce were to implement this solution, the estimated overall increase in turnover of the retail sector would be close to PLN 40 billion.
Expansion into new markets
As many as 68% of retailers plan to expand into new markets, according to the Adyen report. Most intend to use the online channel to do so.
What’s noteworthy – more than half of the companies (55%) say they will be in a better financial position in the current year due to the revenues generated by operating in multiple markets. However, this is hardly surprising, as 20% of consumers surveyed admitted that they have made an online purchase from a foreign seller in the second half of 2022. 21% of them are looking for products available only locally. However, in order for customers from other countries to complete the transaction, it is important to allow as much choice as possible when it comes to payment – 23% only buy online from other countries if they can use their preferred payment method.
Many Polish companies seem aware of the importance of expanding into new markets. One in two entrepreneurs in our country states that being present in multiple markets and diversifying their revenues has allowed them to maintain business stability. 45% of businesses in Poland set a goal to expand into new international markets by 2026 (this is a 22% increase in indications compared to last year).
Meeting the expectations of customers buying products from abroad looks quite good, although there is still room for improvement, in Polish retail companies. 24% of them accept international payment methods, such as AliPay or WeChat Pay.
Also noteworthy is the fact that 57% of Polish retailers, admit that they are now in a better position thanks to investments in customer experience development
The number of costly frauds for businesses is growing
Unfortunately, as e-commerce grows, so does the number of frauds, according to the Adyen report. The latter, like the shopping experience, are becoming increasingly innovative and diverse. Last year, 34% of companies in the retail industry experienced a cyberattack or data leak. And 39% reported an increased number of payment fraud attempts.
This is costly in its consequences for both businesses and consumers. Among the former, 44% have suffered significant losses due to fraudulent transactions and chargebacks. In contrast, 23% of consumers experienced payment fraud in 2022, with an average loss of $242 per person.
Such incidents can discourage consumers from shopping in a store or online. Three in four expect companies to better inform them about the steps they are taking to prevent online fraud. 40% check whether a site is secure before making a purchase, and 30% will not buy anything on an outdated site.
Looking from a global perspective, companies seem aware of this. They are investing in special systems and expanding fraud-fighting teams. More than half (51%) are using artificial intelligence to prevent fraud (that’s a 13% year-on-year increase). And 58% have introduced strong authentication to comply with the EU’s PSD2 directive on payment services.
The picture is similar for Poland. 36% of retail companies plan to double the size of their risk management teams. They are also reaching for advanced algorithms to ensure customer security. 47% of Polish companies use them, and more than half use security features that intelligently protect against chargebacks.
This year, retail companies’ use of smart technologies to counter fraud and cyber attacks will increase further. Among them will be advanced algorithms that profile shoppers. All to ensure that customers complete their purchases.