In the previous article of the series ‘What challenges and strategies in e-commerce are worth considering in 2024. #1‘, we focused on two key issues, namely (1) the crisis in the supply chain and (2) ecological shopping trends and Green Shopping. Analyzing these areas, we understood how important they are for shaping the future of electronic commerce. Continuing our journey through the world of e-commerce, this article will focus on how electronic payments and the development of Commerce Media in the new era will affect online commerce.
We will analyze how these aspects affect customer experiences and the operational and marketing strategies of companies operating in the digital space. We will look at how electronic payments and Commerce Media are transforming interactions between consumers and brands, and what challenges, opportunities, and threats these modern technological solutions bring.
How electronic payments are evolving in online sales.
In the dynamically developing world of e-commerce, electronic payments are a key element that affects the convenience and security of online transactions. Remember that electronic payments are fast, convenient, but also carry risks. They limit human freedom in the longer perspective. So now, man is faced with a choice whether he wants to be free or, for the sake of convenience and security, give up his freedom. Electronic payments are a good option and worth using. The evolution of payment methods, along with technological progress, shapes the way consumers and online stores conduct transactions and their business. It all comes down to making it fast and clicking as little as possible to pay.
Let’s see what are popular payment methods.
BLIK: The BLIK system is very popular in Poland, allowing for quick and secure payments using a code generated in the bank’s mobile application. This is an example of how innovative payment solutions can gain popularity due to their simplicity and the integration of stores with banks. In 2023, BLIK reportedly handled as much as 51% of all transactions during online shopping, and during the sale period, it handled up to 58% of transactions. Credit cards handled only 23% of online purchases.
Deferred Payments: Deferred payments, which allow consumers to purchase products with the option of later payment, are also gaining popularity. This approach increases the flexibility of purchases, while posing challenges for stores in terms of managing credit risk, and for customers to face the challenge of a lack of peace of mind and uncontrolled indebtedness.
In 30 days, the day will come when you have to pay. For both the customer and the store, this can be a trap. Deep analysis based on prediction can eliminate risk for both sides. Who has access to this type of data? Probably only large companies, so this is their market advantage. Giants will not allow unreliable customers to shop with them. They will go shopping at smaller stores, so there may be abuses if the store does not conduct good customer analysis.
Does anyone remember shopping on a tab in traditional stores? Some might. Do you remember which stores closed the fastest? Those that gave on a tab. The customer, when he had money, went to the store where they did not give on a tab, and when he ran out of money, he went to the store that gave on a tab. It may be similar here. The question is, who will take responsibility for it. Therefore, small and medium-sized e-commerce companies should pay close attention to this shopping option and approach it with great caution so as not to destroy their business. Prudent introduction of this option is perfectly fine.
Digital Wallets: Digital wallets, such as Apple Pay or Google Wallet, and others facilitate online and offline payments, offering a fast and secure way to store payment data and carry out transactions. It is necessary to observe which specific direction it will go. Generally, the trend is towards cashless operations. However, remember that cash in hand gives freedom. Every account, every wallet can be blocked and closed. On the one hand, it’s a great convenience, and on the other, a huge danger for the customer.
What is the role of AI in the development of electronic payments
Personalized offers: Artificial intelligence (AI) plays a key role in personalizing payment offers. By analyzing data on the basis of predictions, about shopping behaviors, AI systems can tailor offers and promotions to individual user preferences. For a customer visiting a store, offers tailored and directly adapted to his shopping preferences will appear.
Transaction security: AI also plays a significant role in ensuring payment security. Machine learning algorithms are able to detect and prevent fraud by analyzing transaction patterns and identifying potential irregularities and threats. Expanding information base and its continuous analysis will eventually eliminate any abuses by customers who have dishonest intentions.
Automation of processes: Automation of payment processes, supported by AI, contributes to increased efficiency and error reduction. For example, systems can automatically verify the credibility of a buyer or make quick credit risk assessments based on collected data on the basis of predictions. Therefore, when a customer is not credible, the credit option will not appear during payment, or he will have other restrictions on the store’s website. I suspect that there will be a percentage determination of customer credibility. Such things are already being tested in the world.
Commerce Media as a new era of e-commerce.
What is Commerce Media:
E-commerce media are marketing and advertising strategies used directly on e-commerce platforms and other digital sales channels. They rely on the use of prediction strategies and the use of previously collected data from various sources regarding shopping behaviors and preferences to deliver personalized and effective ads in the context of their online shopping experience. These methods allow brands to reach potential customers more targeted and effectively, increasing the likelihood of conversion and improving the overall effectiveness of marketing campaigns.
Imagine that two customers enter the same store, at the same time, and click on the same product tab. From that moment, each of them will see different products, and if they are the same products, there may be a different description, and even a different purchase price of the product. During the order realization, different forms of payment and delivery, adapted to the preferences of a given customer, will appear. You won’t even know that you paid more or less for a product than another customer who also bought it at that time. Do you think it’s fiction, that it’s not real?
The significance of Commerce Media in the industry
Commerce media is a marketing strategy that uses online shopping data and user behaviors to create more personalized and effective advertising campaigns. It is a combination of e-commerce technology, digital advertising, and the analysis of large sets of previously collected data. These data are currently available only to large companies. This is one of the reasons why it is worth cooperating with ECAT eCommerce.
Impact on e-commerce: The introduction of Commerce Media into the online business of e-commerce changes the way companies communicate with customers and promote their products. Thanks to a better understanding of consumer behavior, ads can be more accurate, increasing their effectiveness and leading to higher conversions, as customers view products that currently interest them. Examples of the use of Commerce Media and its future development.
Personalized advertising campaigns: Commerce media allows the creation of more personalized advertising campaigns that respond to individual consumer needs and preferences. For example, product ads can be displayed to users based on their previous browsing and purchase history. They may have different descriptions and different prices.Increased ad effectiveness: Thanks to the use of purchase and online data, ads can achieve higher effectiveness, reaching the right target group at the right time and place, bypassing customers who will not see this ad, because they are currently not interested in certain products.Integration with e-commerce platforms: Commerce media is becoming increasingly integrated with e-commerce platforms, offering advertisers direct access to consumers during their online shopping journeys. You can say that the customer will be led from the very beginning only to products that he is usually interested in.
Future Development: It is predicted that Commerce Media will continue to evolve, using new technologies such as artificial intelligence and machine learning to better understand
Summary.
The year 2024 brings with it new challenges and opportunities for the e-commerce sector, emphasizing the dynamics and continual development of this industry. For small and medium-sized e-commerce companies, there will be pitfalls that need to be quickly identified and addressed. As we see, the evolution of electronic payments and the development of Commerce Media are of fundamental importance for the future of e-commerce. These two aspects significantly influence the way consumers and online stores conduct transactions and communicate with each other. Personalization, security, and efficiency of electronic payments, combined with the strategic use of Commerce Media, are becoming key elements of success in the dynamically changing world of digital commerce.
In the future, we can expect further innovations and changes that will even more closely tailor shopping experiences to the individual needs of customers, while increasing the efficiency and effectiveness of companies’ marketing activities. Considering these trends, e-commerce companies must continuously adapt their strategies to maintain competitiveness and meet the expectations of increasingly demanding consumers educated by the major players in the market.
The most important challenges and opportunities for e-commerce in 2024:
- Evolution of Electronic Payments: The development and integration of new payment methods, such as deferred payments or digital wallets, combined with the use of AI for personalization and increased security, will continue to shape the future of online transactions.
- Utilization of Commerce Media: The development of Commerce Media opens new opportunities for personalized and effective marketing, which can contribute to increasing the effectiveness of advertising campaigns and better understanding the needs of customers.”
![Aderlo Marketplace on Magento. ECAT eCommerce Informer [Week 18, 2024]](https://ec-at.com/wp-content/uploads/2024/05/Aderlo-Marketplace-on-Magento.-ECAT-eCommerce-Informer-Week-18-2024.jpg)