Expand customer base despite challenges and secure sales

Not only small and medium-sized companies, but also large online retailers are again facing challenges: Fixed costs are increasing due to rising electricity and energy prices. At the same time and in addition, customers feel the financial pressures caused by inflation in their daily lives.

It is therefore worthwhile for retailers to open their business internationally in order to stabilize it or even expand it despite difficult times. It is important right now to know the needs and wishes of customers and to be able to respond to them.

This is shown by the PayPal E-Commerce Index 2022 – a representative study by PayPal that relates to eleven European countries and Israel and provides interesting insights.

The survey focuses on 6 areas:

1. Mobile-first approach in e-commerce
2. Speed, comfort, safety
3. social platforms
4. Flexibility: The “Pay Later” function
5. International shopping behavior
6. Tech Trends: Crypto, NFT, Metaverse

In the following, the individual areas of the survey are examined and the key statements are prepared in bite-sized form for online retailers.

The E-Commerce Index shows that 97 percent of consumers surveyed internationally between the ages of 18 and 75 make online purchases or payments. For two out of three respondents (65 percent), this involves at least one weekly activity in which they spend an average of 342 euros per month online for a mixture of essential and leisure shopping.

On average, consumers prefer mobile devices (50 percent) for online purchases and payments; A quarter of consumers (25 percent) indicated PayPal as the preferred payment option, followed directly by the debit card and credit card, which are each used by 18 percent of the consumers surveyed.

Such an online purchase is a complex process: Even if many consumers find lengthy or confusing shopping processes to be off-putting (40 percent), almost half of consumers (48 percent) state that they are less likely to make a purchase, if they have security concerns or trust issues. However, almost half (47 percent) of those surveyed indicated that the availability of their preferred payment methods would make them more likely to make an online purchase.

Social commerce is becoming more and more common: Almost every second consumer (43 percent) has shopped via social platforms in the last six months. Businesses have recognized the opportunity, and nearly two in three (65 percent) businesses are now also selling through social media platforms. Social commerce has thus become part of customer expectations.

After all, every sixth consumer (17 percent) buys via social media or streaming platforms every week and spends an average of 141 euros per month. Companies are noticing this and are achieving good results with their online promotions: almost a quarter of sales (24 percent) are currently made via social channels.

“Pay later” options are now an integral part of a modern online shop. Customers expect this financial flexibility, for example because they first want to try out the ordered goods at their leisure, examine them and then finally pay for them. 22 percent of German consumers use “pay later” services when shopping online. In this country, “payment after 30 days” and PayPal installments dominate more than half of the preferences on the market.

In Germany, the average monthly expenditure for “pay later” transactions is 141 euros. Companies with online shops in Germany have noticed a relative increase in sales of 50 percent when they offer their customers “Pay Later” options.

The majority of consumers surveyed globally (74 percent) shop internationally, with an average of 31 percent of online purchases being made from international retailers. Online purchases made through international retailers account for 38 percent in Germany. This is also reflected by the companies: 85 percent address an international customer base.

The reasons for international purchases include access to better prices (50 percent) and products that cannot be found locally (39 percent). On international websites, customers are also more likely to purchase by an average of 58 percent if PayPal is available.

More than a quarter of consumers (27 percent) have owned cryptocurrencies at some point. However, many security concerns are paramount when trading cryptocurrencies.

Non-Fungible Tokens (NFT) continue to be a niche product compared to cryptocurrency. The Metaverse, on the other hand, has great growth potential: almost every fourth consumer (23 percent) has already participated in virtual rooms, and another 27 percent are open to it. In fact, every seventh consumer believes that virtual spaces will be an important shopping destination. About one in ten would like their favorite store to exist in the virtual environment (11 percent) or that physical products can be bought in virtual spaces (10 percent).

Online retailers who optimize their shop based on these e-commerce trends can survive better in the international competition of online trade – and thus meet the expectations of their customers, expand their customer base and increase their sales opportunities despite the current challenges .

Find out more about the development of digital shopping and how new buying habits open up new opportunities for online retailers.

Discover the PayPal Ecommerce Index now