Increased adoption of biometric payments, metaverse ecommerce strategies and embedded payments will change the way we shop, members of Protocol's Braintrust say.
Good afternoon! In today's edition, we asked the experts to look ahead to the future and consider how the way we make purchases online will change over the course of the next five years. Questions or comments? Send us a note at Braintrust@protocol.com.
Head of Europe at Plaid
Across Europe, the pandemic’s push to digital means people are embracing new ways to pay, and we need a payments infrastructure fit for the 21st century. Plastic cards were designed for the convenience of physical commerce, but when it comes to the internet, they don’t quite work as well. Numbers get mistyped, cards get lost, stolen or expire, and existing customer authentication flows for cards in Europe can be clumsy for people to use. All of these cause people to abandon carts, payments to fail, and disrupt the customer experience, an increasingly important part of doing business as more brands try to deepen customer relationships and entrench further into their lives.
As embedded payments grow along with ecommerce, account-based payments — whether they happen via digital wallets, bank accounts “on file” or merchants’ own systems — could become the norm in many markets, and already are in places like the Netherlands. Plaid research found that a third (33%) of people in the U.K. have made payments via mobile where previously they used a credit or debit card. With more people growing comfortable with their phone as a payment instrument, the “card” in the wallet becomes obsolete, leaving room for bank accounts to enter into the equation. As retailers start to incorporate fintech into their customer journeys and more people adopt digital wallets, the future for payment innovation is ripe.
SVP, Technology at Pinterest
When it comes to buying something online, in the next five years you will see a higher threshold of purchases driven by visual search (we’ve seen 18% YoY growth) and immersive experiences such as augmented reality (AR). The pandemic accelerated the reinvention of retail. As a result, distributed shopping (online shopping, curbside pickup, "buy online, pickup in store," etc.) is here to stay. With shopping a constant in our lives, we predict that the future of shopping will be focused more on building experiences that meet consumers’ tastes, needs and intent. With the growing awareness that oftentimes consumers don’t have the words to describe their taste, or know what they like until they see it, you will see more platforms rely on contextual shopping to enable shoppers to see ideas in context like a large image, collection of ads or a creator’s livestream.
Combine that with the right AR solutions allowing shoppers to see items in their own space and you will have an immersive experience that will not only be inspiring but also increase the likelihood of making a purchase. (We have seen that Pinners are five times more likely to purchase from AR-enabled Pins on Pinterest.)
In five years inclusive tech will be a non-negotiable in the shopping experience. You can only develop a personalized shopping experience if it’s inclusive. For that reason, you will see less bias in the AI used to power platforms and see more developed features that truly work for everyone.
Founder at Burnmark
We've seen contactless payments (with increased limits), chat-based payments and mobile wallets achieve mass consumer acceptance in the last couple of years. I think we are right at the starting point of biometrics payments adoption at the moment — we've had a flurry of announcements around face recognition in payments in the last few weeks. This will undoubtedly make point-of-sale easier, especially when not always carrying a physical card. In five years, biometrics/face-based payments will possibly be at a similar level of adoption as contactless payments right now.
The biggest bottleneck today in online shopping, however, is the physical delivery of goods. Technology has a huge role to play here, by providing infrastructure or new means of delivery. Several retailers are testing drones and robots for physical delivery of goods, and I expect this to be another area where technological innovation can help bring significant disruption.
Nitzan Mekel-Bobrov, Ph.D.
Chief AI Officer at eBay
Online shopping will look very different in five years. While undoubtedly many new features will emerge, a key theme running across many of these features is the move toward immersive shopping experiences.
Consumers want to experience a product ahead of making a purchase, similar to what they would get in a brick-and-mortar store. We will see a lot more 3D visualizations of products at massive scale. These will be experienced both on screen and in augmented reality. For example, we expect your everyday brand to offer features like eBay’s 3D True View, which through AI allows buyers to get a 360-degree look at a “photorealistic” 3D re-creation of a product. Another type of immersive shopping experience, which has already become mainstream in Asia, is Live Commerce. Bringing together live video, social media and user-generated content, Live Commerce will become mainstream in the U.S. over the next few years.
Finally, blockchain technologies are here to stay, and NFTs (non-fungible tokens) are going to play a big role in the future of online shopping. Digital authentication, governance on responsible supply chain, mass content creation marketplace — all of these innovations will rely on NFTs that are not only immersive but also provide cross-platform compatibility.
VP, Revenue Operations at Infinicept
In five years, one of the biggest changes in buying online is going to be the advancement of improved, software-led B2B payments.
The ultimate goal for many B2C companies is to achieve “invisible” payments, where the payment process is so frictionless the customer is barely aware the transaction is completed. We see this when we use Uber or Lyft and increasingly with retail curbside pickup and food delivery services. Imagine if you had to pay each Uber or Lyft driver through the individual driver’s own payment app or device (or use cash, ugh). Luckily, you don’t have to because Uber and Lyft are marketplaces. They handle the payments behind the scenes in a uniform, consistent, frictionless manner.
Whether entirely invisible payments are achievable or not, business-to-consumer companies strive to provide the best possible payment experience: clear information, easy navigation, fewer clicks. Business-to-business payments, however, are still difficult and full of friction. Today considerable time and effort are required for a business to receive payments from an invoice. The status quo for accepting payments means businesses need to complete pages of banking forms and wait weeks for bank approvals.
In the next five years, we will see the integration of payments functions into more B2B software, creating an improved, more uniform payments experience overall. We’ll also see more software companies becoming payment facilitators. This is a card brand (Visa, Mastercard) designation that allows software providers to become payments providers. Meaning, they can perform their own due diligence, send payment transactions, manage funds settlements and provide a more a personalized, seamless experience to their customers.
The future is bright for buying everything online in five years, with the customer experience improvements we see in B2C finally extending to B2B payments through payment facilitator software platform growth.
Chief Strategy Officer at commercetools
Today ecommerce is still very desktop-focused. Online shoppers sit down in front of a laptop, browse through products, add to a cart and purchase at checkout in a fairly linear manner. This process hasn't changed much since the beginning of ecommerce in 1994. With the innovations seen in the industry today, this will no longer be the status quo.
The biggest differentiator between online shopping today and in five years will be that a majority of shopping will no longer take place on a desktop. There are now so many new customer touch points that are capable of facilitating commerce – mobile, social, cheap internet-connected buttons, the metaverse and even augmented reality (via Apple's new headset).
At this current moment, many brands are still in the experimentation phase with some of these newer retail strategies like the metaverse, streaming ecommerce and shoppable TV. As ecommerce continues to boom with these new channels, consumers' expectations of how brands approach customer service and create engaging shopping experiences are heightened. As more consumers voice their preferences for these newer methods of purchasing online, brands will have to implement these touch points into their ecommerce strategy to accommodate the shopping behaviors of their customers.
VP, Merchant Services at Shopify
Consumers are engaging with their favorite brands across many channels — online, in store, mobile and social. That’s why more independent businesses require a platform that enables them to offer customers personalized and holistic commerce experiences to turn online visitors into repeat buyers. In five years, the key difference will be how brands leverage technology to build these personalized experiences online, and not just in brick-and-mortar stores.
We believe commerce is at its best when consumers and merchants feel like they’re a part of something meaningful that’s bigger than just a transaction. Here are a couple of ways Shopify merchants are elevating their online experiences and changing how customers buy.
Token-gated commerce: We think the value of NFTs isn’t in selling them, but activating them. Token-gated commerce enables merchants to give NFT holders exclusive access to their online shop, collections, perks and products. It’s a way to deepen connections and bring merchants and consumers together around a shared identity or passion, all while creating delightful experiences for consumers in the process.
Hydrogen/Oxygen: Merchants have always had a first-class experience building storefronts on Shopify through our online store, but we know for many merchants — whether they’re large businesses seeking more control over their tech stack or creative merchants who want to connect to consumers through unique brand expression — completely custom, or “headless,” storefronts are the ideal path forward. So we have combined an approachable path for building headless storefronts on the highest performing commerce platform — Hydrogen — with built-in global hosting on Oxygen. Together merchants can build the most powerful, high-performing headless storefronts on Shopify and innovate their brand expression online like never before.
We recently talked about these products and more at Shopify Editions, where we also shared our point of view on this next era of commerce.
President of Commerce at GoDaddy
The pandemic caused a seismic shift in consumer behavior and new business starts—particularly, it’s brought on a new generation of digital native entrepreneurs who are blind to the difference of online vs offline businesses and excited to wield tech toward building better consumer experiences they wish already existed. This will enable faster adoption of many tech ideas that have been in development for years, many of which leverage digital e-commerce tools to enhance in-person experiences.
Some examples include real-time local inventory searches in all maps across all stores including the smallest microbusinesses, delivery as an option everywhere, even when you’re already in the store, transactional credit (BNPL) even for burgers and fries and customers paying simply by walking out at many places including small shops. In the next five years, we’ll also likely see the adoption of near-universal crypto payment acceptance and shopping trips with friends in the metaverse that lead to real purchases delivered to your home.
VP, Online Stores at Wix
Advancements in technology and logistics, coupled with increased competition and skyrocketing customer acquisition costs, will lead to hyper-personalized, zero-friction online shopping experiences that will be more immersive and instantaneous than ever. Online shopping will be tailored specifically to each customer, exposing them to the right product at the right time and will remove friction and minimize time between a customer intent to own a product, the purchase, and when it arrives at their doorstep.
With the ongoing domination of social networks and democratization of online shopping, led by ecommerce platforms removing barriers for newcomers, online creators and micro brands, the number of online merchants will grow exponentially and, with it, competition and customer acquisition costs. The critical necessity to increase conversion and customer repeat rate coupled with improvements in AI and data processing technologies will drive hyper-personalization. Online merchants will use datification and machine learning to adapt their products and services in real time to generate personalized shopping experiences, catalogs and even promotions, for each customer to increase the likelihood of a purchase.
Utilizing cloud computing connectivity and mixed reality capabilities, content publishers, ecommerce platforms, device manufacturers, retailers and logistics companies will collaborate to shorten the time and reduce friction between customer intent and product delivery to a minimum. For example, consumers will be able to watch a TV show or see a social media post with a stylish persona they like, and in real-time, be able to purchase the entire look, including the outfit, accessories and even the makeup on any of their connected devices, after ensuring it looks perfectly on them via a virtual AR fitting room, and receive it within a couple of hours to their doorstep.
Senior Director of Product Marketing, Commerce at Adobe
Consumers today expect seamless shopping experiences that are personalized to their individual needs. They want these experiences to span the entire buying journey, whether that is fully online or a hybrid of online and in store.
With buyers expecting their shopping experiences to be tailored to their individual needs, B2C and B2B brands are turning to data insights and AI to further personalize shopping experiences. For example, AI-driven product recommendations can suggest relevant, personalized products based on customer behavior, product sales, visual elements or popular trends.
Consumers also want to choose how they buy, where they buy, and when and where their orders are fulfilled. More brands are adapting to this by offering more flexibility in the types of payment options and providing options for emerging payment methods like "buy now, pay later" and are implementing curbside or "buy online, pickup in store" (BOPIS), which turns physical stores into pickup points so purchases can be delivered faster.
What this all comes down to is that in order to stay competitive today, brands need to invest in delivering personalized shopping experiences that meet customer demands. Personalization is an opportunity to drive revenue growth, increase customer satisfaction and build customer loyalty.
See who's who in the Protocol Braintrust and browse every previous edition by category here (Updated June 23, 2022).
Kevin McAllister ( @k__mcallister) is a Research Editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team.
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