As 2018 nears, it’s time to get a handle on the global digital commerce trends that your business will face next year. To help you out, here are five trends we think will matter most in the coming months: localization, IoT monetization, tax compliance, personalization and PSD2/GDPR.
Localization and Local Payment Methods Gain Importance
Even in an increasingly digital world, localization matters more than ever. Online sales account for a growing proportion of commerce worldwide, but rather than standardizing global payment methods, consumers in different countries have developed their own strong preferences. Whether it’s AliPay and WeChat Pay in China, PayPal in Germany or iDEAL in the Netherlands, supporting local payment methods can help improve conversion rates in specific markets.
However, supporting a single payment method is not enough: also include more billing currencies and enable intelligent payment routing for uplifts in authorization rates. Be sure to tailor purchase flows by region, too: shoppers in some locations prefer a thorough order review, while other markets want to check out on a single page. Test and optimize by market for best results.
We Finally Monetize the IoT
There are already more connected devices than people in the world, and the number keeps growing: by 2020, there will be over 20 billion connected devices worldwide (Gartner). While these devices themselves are an appealing sell, the opportunity to monetize the data they collect and the services they can provide is even more significant. With proven IoT uses ranging from personalized healthcare and agricultural sensors to smart fridges, self-driving cars and service robots, the companies that master monetizing the data and services associated with these devices will come out ahead.
Taxation Remains Tricky for Digital Commerce
Globalization offers substantial business opportunities, but also introduces complexity. As companies operate in more markets, they face more regulations. Different countries and regions, from U.S. states to the EU, have different laws affecting ecommerce taxation. To manage these differences, you need a commerce platform that ensures compliance and adjusts for tax variations across products and regions, all while syncing with your ERP system for accurate accounting. Managing tax compliance is not always easy, but the right tools can make a huge difference as you grow globally.
Things Get Even More Personal for Digital Commerce
Sometimes it may seem like we’ve been talking about personalization forever, but this trend will continue to become even more of a reality in 2018. Personalization will move beyond ads for every product you’ve ever clicked on following you across the internet and begin to deliver real value in your business, personal life and both combined. Personalization tools will learn not just the products you prefer, but discover your actual behavior and preferred purchase methods, delivery methods and more. Online experiences will get smarter as personalization tools or add-ons proliferate.
Regulatory Context Gets More Strict As PSD2 & GDPR Approach Fast
The Second Payment Services Directive—known as PSD2—will come into force in January 2018, forcing banks across all European Union member states to add two-factor Strong Customer Authentication (SCA) on all remote access to customer accounts.
Another EU-wide regulation, General Data Protection Regulation (GDPR), comes into effect May 2018. GDPR requires all ecommerce merchants, no matter where they’re located, to meet new privacy requirements when selling in EU countries. The regulation aims to standardize data privacy protections and give consumers more control over their data, and it requires companies to put in place stringent data protection and privacy practices when selling online. Regardless of where your business is based, meeting these regulations is essential if you want to sell in leading European markets.
If you haven’t started your journey to understand your part in PSD2 or GDPR compliance, now is the time.
As these digital commerce trends reveal, planning for success in 2018 is essential. So is choosing trusted partners to help you meet payment and compliance requirements, so you can focus on what you know best: your core business.