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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: 2021 Outlook: Merchant Services
Five Predictions for Merchant Services in 2021:
COVID-19 will continue to cast a shadow across the merchant landscape in the following ways:
- Still too many brick-and-mortar stores. Legacy department stores will suffer most and spillover will affect shopping malls.
- Bigger is better. Large chains, big box merchants, warehouse, and electronics stores will dominate retail with end-to-end resources from order to fulfillment.
- The economy climbs a wall of worry. Though personal consumption looks to grow, data also indicates a decline in household income.
- Shopping habits continue towards digital. In-store traffic will continue to decrease compared to online sales.
- E-commerce thrives. Online commerce growth is estimated to be 9% higher in 2021 than 2020’s massive 28% increase from 2019.
Five years compressed into one. That’s how Mercator Advisory Group estimates the accelerated pace of online sales growth brought on by COVID-19’s impact on merchants in 2020. The stay-at-home lifestyle has transformed the scene at most Main Streets and malls into empty storefronts and silent restaurants.
As essential retailers, groceries and big box stores have thrived, but they also owe their success to having pivoted smartly to e-commerce at a rate and scale that ensured their survival. Post-pandemic era merchants will leverage digital ordering, payment, and fulfillment as preferred ways to engage and maintain their customers.
As the calendar turns to 2021, this Merchant Services Outlook peers into the future, looking for what proactive merchants and their payments partners should do to increase their chances of success.