Juphy’s Weekly E-Commerce News Express – 1-5 January 2024
As we start the first week of 2024, our exploration of e-commerce starts with Gen Z’s evolving payment expectations, a recap of 2023’s credit card trends, challenges in e-commerce fraud, and the launches of Maileroo and Pocket PangPang. Join us as we begin the new year by staying one step ahead with the latest and first news of 2024.
Gen Z on Payment: Demand or Preference?
The influence of Generation Z, born between 1997 and 2012, on the e-commerce and retail landscape is undeniable and characterized by their high-paced consumption habits and a distinctive approach to buying and banking. In contrast to older generations, Gen Z individuals dislike time-consuming tasks such as making phone calls, waiting for email responses, or dealing with traditional banking procedures like updating addresses and denying transactions. The era of carrying cash or relying on physical debit cards is fading rapidly as Gen Z integrates technology into their daily lives, emphasizing a highly digital and phone-centric lifestyle.
As a generation that is progressively entering the workforce, the young generation’s impact on the market is becoming increasingly significant, reshaping both consumer expectations and preferences. A survey conducted by NMI highlighted this shift, revealing that 83% of Gen Z consumers express eagerness to adopt and explore new payment methods while shopping.
When it comes to e-commerce, the preferred payment methods for Gen Z include cutting-edge systems such as digital wallets, mobile options, and Buy Now Pay Later services. These preferences were all popular in 2023 and are expected to continue their dominance in the e-commerce landscape in 2024, with a projection that two out of three consumers will opt for these payment methods in at least half of their online transactions.
Despite the fact that many established online businesses have a loyal customer base, Gen Z represents an untapped and taken-for-granted opportunity. Their curiosity and high consumption place them as the shapers of the future of financial technology in e-commerce. Recognizing the importance of technological integration and changing traditions, businesses that adapt to these emerging movements are inclined to succeed globally.
While the prospect of implementing new technologies and payment methods may raise concerns about initial costs, it’s crucial to view this as an investment in attracting a broader customer base and ultimately increasing revenue. Offering diverse and up-to-date payment options not only aligns with Gen Z preferences but also serves a broader audience seeking convenience and innovation.
To ensure swift adaptation to changing trends and evolving technology, online businesses may consider embedded methods or collaboration with independent software vendors and sales organizations. This approach enables businesses to stay responsive, aligning their systems with the preferences and expectations craved by consumers.
While integrating such technologies may seem daunting at first, it’s similar to crafting a tailored checkout experience that provides customers with unique and need-specific payment options. As we step into 2024, embracing the mindset of new opportunities and innovation becomes essential – a mindset best described by the saying, “Out with the old, in with the new!”
2023 Credit Card Chronicles: A Short Year-End Review
With 2023 ending, let’s stroll down the shopping memory lane and shine a light on an essential player – credit cards. In the face of inflation and increasing interest rates, credit cards emerged as the go-to for online purchases. As consumers navigated economic shifts and challenges, these cards became the star of transactions. Notably, major players like JPMorgan, Chase, and Wells Fargo reported a considerable increase in credit card spending throughout 2023.
Here’s a quick reality check: Mastercard’s 2023 holiday report revealed a 3% growth in U.S. retail sales. At first, it sounds good, right? But don’t get excited right away – it’s a sign and indicator of the impact of higher interest rates and inflation. Even the tactics of discounts and promotions from giants like Amazon and Walmart couldn’t quite work their magic.
Now, back to credit cards. Delinquency rates are getting to an even higher point, with Discover and Capital One stating an upward trend in card delinquencies. Why does it matter? Well, it’s a crucial signal that consumers might face hurdles in keeping up with their financial duties – a key indicator that 2024 could see a potential slowdown in spending. After all, finding the sweet spot and balance between consumer spending and financial responsibilities is the secret to enabling consumer spending and purchase opportunities.
Money always matters in some way, right?
E-Commerce Fraud: Dishonesty and Insider Misconduct
As we welcome a new year filled with new hope and joy, the e-commerce world braces itself for an ongoing challenge – the problem of customer dishonesty and insider misconduct. In the endless battle against fraud, merchants are proactively exploring innovative strategies. With a new strategy in mind and leaving the complexities of processing returns, online businesses now offer replacements or refunds without delving too deep into investigations. But that doesn’t prevent the ‘Friendly fraud’ issue where customers expect chargebacks even though they are satisfied with the purchased item. It is a prevalent form of deception. Some reports suggest that even viewing it as an inevitable business cost, merchants foster an environment facilitative to consumer fraud.
Adding another layer of complexity, the Ponemon Institute underscores a growing concern – economic insecurity among employees contributing to a rise in insider threats. Merchants adopt protective measures such as delivery insurance and enhanced fraud controls to address these challenges. Unfortunately, these measures, including tracking shipping processes and holding handlers accountable, also contribute to rising business costs.
The cost of fraud is becoming more significant every year, with projections indicating that retailers may lose $100 billion annually to various fraudulent activities. The battle against fraud persists, and merchants struggle with the dilemma of balancing customer experience, revenue, and operational costs. While there is no universal solution, businesses differ in their solution-oriented approaches, each adapting to the evolving threat in their own way. The quest for an effective solution remains a dynamic game, with both merchants and fraudsters constantly evolving in this arena.
Maileroo’s Transaction Email Platform with Real Time Tracking
Maileroo introduced a new email delivery platform tailored for brands engaging in transactional email communications. This solution incorporates real-time tracking, providing businesses with immediate insights into the impact of their campaigns. This feature enables swift and well-informed decision-making, enhancing email campaigns’ overall efficiency and responsiveness.
Pocket PangPang Expands to Thailand
Pocket PangPang, the Korean single-price mobile shopping platform, has extended its services to Thailand. The platform introduces a new concept by pairing customers with a diverse range of products, spanning categories such as food, household items, cosmetics, smartphones, and even luxury designer goods. Each item is offered at a uniform price point of 200 baht, the official currency of Thailand.
In the starting week of 2024, our e-commerce journey begins with key insights. Gen Z’s influence reshapes payment expectations, emphasizing the need for businesses to align with innovative methods. Meanwhile, a retrospective of 2023’s credit card trends reveals potential spending slowdowns. Delinquency increases signal caution in balancing consumer spending and financial duties. The yearly challenge of e-commerce fraud persists, with merchants adapting to ‘friendly fraud’ via hassle-free solutions. Noteworthy updates in the e-commerce landscape include the introduction of Maileroo’s transactional email platform and the expansion of Pocket PangPang into the Thai market. As we enter 2024, e-commerce promises an exciting journey of challenges and opportunities.