Innovation. A widely used word, sometimes too much, good for any context and purpose. A practice that is too frequently disregarded also in retail, where digital innovation often remains prerogative to big brands, or also for the little ones that are aware.
Costs of missed innovation
Adyen is a digital platform, among the most visible on the international market, to manage payments in-store, online, and through the mobile app. In the last days, it published its Retail Report 2019, developed with the analysts of 451 Research, on the perspectives of the industry. Assessed for what they are not and, on the contrary, should be. An estimate of costs of retail, for the innovation that should be done, and the one that wasn’t done.
A credible premise is that within the next three years online sales will weight for one-third of the entire distribution. These will also be conveyed by the growing usage of social networks, that according to the study, yet today would weight for more or less one-fifth of the transactions. A statement that is not surprising, viewing the familiarity of Adyen with the industry, where it has clients like Facebook, Spotify, and Uber.
The cart abandonment
More than a client on two (53%) would give up on the purchase because of the missing of its favorite payment method. A percentage that, if applied to a global level, would mean an equivalent of lost sales equal to 277 billion dollars.
Challenging numbers and, naturally, questionable. Referred to an indisputable weak point of digital commerce, the departure from the website, without completing the purchase.
For years, analysts aim to the attention on the phenomenon, caused by many reasons and not only by unsatisfactory payment options. A too long and cumbersome purchasing process, delivery costs and times, operations security, return conditions, just a few examples.
This year, however, other market researches (Barilliance or Salescycle, for example) quantify the cart churn rate in a percentage between 70% and 80%.
Purchasing and service options
The Adyen/451 Research report concerns a central aspect of the relation between brand and customer. 56% of consumers make one more purchase if the brand offers a purchase and service alternative, online and offline.
Even more important, a buying cycle that integrates the purchase inside the two buying channels, the collection or the refund directly in the shop. For almost half of these (46%), the importance is felt so much to prefer a competitor brand.
The estimates of the relationship, a value higher than 300 billion dollars. Option, this, that request retailers’ important investments in costs and organizing effort.
For Italy, according to the research, an evolutionary unify commerce strategy would mean a development potential higher than 50 billion dollars.
Beyond the numeric estimates, digital innovation can certainly be a powerful business generator or a pitiless measure of the loss of competitiveness.
The recent history of retail and many of its historical brands testifies the importance of that. In the induced advantages, and the huge penalties caused by a bad or missed implementation of the digital innovation.
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