A new report by PayTech Tribe Payments has found that 40% of ecommerce firms are planning to open a physical store in the next three years.
According to Tribe, the move to open physical stores is being driven by a number of consumer and payment trends that merchants will need to adapt to in the next five years.
The report – which surveyed bot online and multi-channel merchants across the UK, the Netherlands, Lithuania, Spain and Germany – found that the majority of merchants believe there is an increased desire from shoppers for a better customer experience – at 84% – while 81% believes there in an increased desire for cross-border shopping, 80% for paying using multiple device types and 79% for greater personalisation.
Up to 50% of merchants said that they struggle to compete with larger chains who offer an ‘innovative customer experience’ at the checkout. Meanwhile, 46% of all merchants say regulatory compliance is a challenge, 46% struggle to navigate consumer trends such as BNPL, multicurrency and contactless. In addition, 27% said a challenge lies with reducing fraud, with these issues being more particular for ecommerce merchants.
To manage these challenges, 34% of merchants across Europe said they plan to offer consumers more ways to pay. Physical stores led the way at 13%, with ecommerce trailing behind on 10%.
Just under a third of merchants said they expect to launch their own branded store cards, mobile apps and increase the range of payment options to better compete. Furthermore, expanding geographically is a tactic being considered, mostly by British and Spanish brands on 88% and 80% respectively.
Tribe Payments managing director Alex Reddish remarked, “Reports of the high street’s death may be premature… or even just wrong. Merchants are responding to consumer demand and want to deliver a multi-channel, highly personalised shopping experience. This includes launching their own financial offerings via cards and embedded finance options. It’s up to acquirers and infrastructure partners to provide the technology and innovation to enable merchants to compete with their rivals, both online and in-store and keep up with consumer demand.”
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