The 2023 Retail Revolution: Key Hurdles and How to Leap Over Them

Navigating the New Frontier of Ecommerce amidst Rising Challenges

Key Takeaways:

  • Consumer Payment Preferences: A shift towards diverse payment methods, with traditional credit and debit cards seeing a decline.
  • The Post-COVID Returns Era: A rise in online returns poses significant challenges, demanding innovation in handling genuine and fraudulent claims.
  • Global Market Expansion: Despite the turbulence, the opportunity for cross-border expansion in ecommerce is riper than ever.

The Great Payment Shift

Payments, the beating heart of retail, are undergoing a monumental change. The era when debit and credit cards ruled supreme is fading. The new entrants? “Buy now, pay later” systems, with a staggering 68% growth in a single year. And let’s not sideline the giants – PayPal and Apple Pay, having witnessed an uplift of 274% and 70% respectively.

The clarion call for retailers is clear: adapt or perish. Not catering to the evolving consumer preference might just be a £1.8 billion oversight, a costly mistake in the bustling European Economic Area. The roadmap ahead? Identifying trending payment methods within target demographics and bringing them onboard.

The Power of Data in Optimizing Payments

With losses reaching a staggering €25 billion due to false declines and another €2.2 billion to fraud in 2021, the importance of data in the ecommerce ecosystem cannot be stressed enough. Machine learning and data-driven insights stand as the beacons guiding retailers to better risk management, loyalty cultivation, and deeper consumer understanding. And all this becomes even more vital when the added layer of Strong Customer Authentication (SCA) threatens to increase cart abandonment rates.

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Tackling the Returns Avalanche

Online shopping saw an unparalleled boom during the pandemic, and unsurprisingly, so did the number of returns. The challenge? A staggering 38% of consumers became return-comfy, and this trend is digging a hole in the annual revenues of retailers. But, not all returns are born equal. The sinister world of fraudulent returns, from deceitful damage claims to swapping PlayStations with baked bean cans, demands immediate attention.

The delicate art for retailers is to strike a balance: being open-armed for genuine returns while having a vigilant eye against fraud. How to achieve this? Machine learning to the rescue once more, aiding in discerning the intent behind every return request.

Embracing the Cross-Border Ecommerce Boom

The ecommerce realm is no longer confined by geographical boundaries. With online sales skyrocketing by 33% YoY in 2021 and cross-border sales noting a 45% uplift, the market beyond borders beckons retailers. An astonishing 85% of UK consumers are shopping from international platforms, hinting at a flourishing market abroad.

However, with great potential comes a plethora of challenges: understanding local fraud trends, content localization, and diversifying payment methods specific to regions, to name a few. Thorough market research combined with a keen sense of risk and opportunity can pave the way for success in these uncharted territories.

Smooth Sailing Through SCA Challenges

Introduced to combat fraud in the burgeoning ecommerce market, Strong Customer Authentication (SCA) might have done its job too well. Two-factor authentication, while enhancing security, has unfortunately created friction in the customer journey. A disturbing 71% of UK consumers express significant frustration due to SCA-induced hiccups at checkout. This discontent can lead to lost sales, with customers abandoning carts or even shifting loyalties to competitors.

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But hope is not lost. Adapting to updated protocols like 3D Secure can substantially reduce this friction. For retailers, the path forward involves crafting an SCA-friendly strategy, mindful of exemptions and transactions that lie beyond the scope of SCA.


2023 indeed offers a thrilling roller-coaster ride for ecommerce. But with adept planning, cutting-edge tools, and an unwavering commitment to innovation, retailers can not only tackle these challenges head-on but also convert them into unique growth opportunities.


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