Using data and market research as well as anecdotes from its international network of retailers and brands, payments platform provider Adyen has compiled its “Global Retail Predictions” for 2018. The results reveal a retail market driven by technology as well as consumer demands for more personalized interactions and experiential shopping experiences.
The research also forecasts exponential growth of Chinese tourism spending. And in a separate report, Adyen said last week that it expanded its partnership with WeChat for payment processing for more than 400 million Chinese shoppers.
Regarding the growth of Chinese consumer spending in the retail predictions report, Roelant Prins, chief commerce officer for Adyen, told WWD that “Chinese tourists are the new global power shopper” and are pegged to collectively spend $255 billion while traveling abroad through 2025.
Citing research from McKinsey & Co., Adyen said Chinese shoppers “crave luxury goods — Chinese consumers are responsible for up to half of all luxury brand sales worldwide.” Cross-border shoppers in China are pegged to spend an average of about $473 on purchases this year, which Adyen said represents 4.2 percent of the total retail e-commerce market and will amount to more than $85 billion.
Other key findings of the retail predictions report include a market where a unified commerce experience “becomes the norm,” Prins said, adding that “we’ve reached a tipping point where consumers expect unified actions across the shopping journey. So when they buy online and pick up in store, it is a completely seamless process.”
Prins said consumers want efficiency regardless of when and where the shopping journey begins and ends. And if there are any hiccups in that process — whether online, in a store or during the payments process — the relationship (and subsequently, the loyalty) between shoppers and retailers can sour. Prins noted that the market has discussed these issues for “some time, but this coming year we’ll see more implementation” of technologies, strategies and tactics to deploy in this area.
Adyen also expects retailers and brands to better predict customer preferences by better leveraging “big data.” Prins noted that companies have been using data, but now there will be ways to “provide greater relevance and fine-tuning” for brands and retailers to predict consumer behavior and preferences. Such predictive analytics can help inform product development with sizing, color and patterns as well as fashion styles — all of which can help streamline inventory levels and boost gross margins.
Prins also said 2018 will see the “rise of the permanent pop-up.” In the past few years, brands have accelerated efforts to sell direct to consumers. And e-tailers in particular have found success by deploying pop-up stores. For 2018, Adyen sees luxury brands using this model to generate excitement in the market.
Other predictions from the Adyen report includes:
• Ordering more than pizza on Messenger — consumers buying high-end, luxury items as well as apparel on communications platform.
• Prins said retailers and brands will combat fraud by syncing up data across channels to better know exactly what to block.
• Adyen also expects to see “augmented shopping” going mainstream as stores “will use augmented reality to let you see what that new couch will look like in your living room.”
• The company said “voice shopping will roll out widely, as Target, Wal-Mart and Alibaba get into the game.”
Adyen’s retail predictions also noted that “brick-and-mortar stores will be hubs for social experiences like eating, drinking and watching entertainment — but not shopping for goods” necessarily, while “self-service and ‘just walk out’ checkouts will begin a larger push toward diminishing the role of the sales associate.”
The notion that retail stores will emerge as “hubs” for social experiences was a key topic at the Mapic retail property trade event in Cannes recently as well as the International Council of Shopping Centers Deal-Making trade show in New York City last week. Attendees and exhibitors told WWD that the idea of “the commons” is returning, where stores become the centerpiece of the community.
Regarding the expanded partnership with WeChat, Adyen merchants can offer WeChat Pay on their point-of-sale terminals, worldwide.
“This is a key addition to Adyen’s unified commerce solution,” the company said in a statement. “Since 2016, consumers have been able to buy goods online using WeChat Pay through the Adyen platform; now, they can do the same in brick-and-mortar stores.”
The company said by adding WeChat Pay its merchants “can now accept payments from China’s three largest payment providers, including Alibaba’s Alipay and China UnionPay. Collectively, these three capture the bulk of the Chinese market for online payments (over 70 percent), which translated into $2.9 trillion in 2016.”
It’s important to note that WeChat has more than 1.3 billion users — 400 million who are using WeChat Pay for buying products or “person-to-person” payments.
Prins said this “capability allows our merchants to cater to this incredibly important and large customer base as they travel abroad. After November’s record-breaking Singles’ Day sales, it’s more important than ever for retailers to find ways to allow Chinese consumers to make purchases with their payment method of choice.”
In November, Singles’ Day sales accounted for more than $25 billion.