Operations
25 January
PayPal and Bold Commerce are embedding checkout in content
The platforms are integrating as PayPal makes a push into the headless commerce market.
Photo by Muhammad Asyfaul on Unsplash
×
The Current, delivered daily.
Ecommerce news, right to your inbox.
Sign up for our email newsletter.
Subscribe.sticky-cta-wrapper {
width: 100%;
position: fixed;
bottom: 0;
left: 0;
background-color: var(--black);
}
Subscribe to The Current newsletter
Bold Commerce and PayPal are teaming up in a bid for headless expansion.
The news: Checkout provider Bold Commerce and fintech company PayPal announced an integration that will allow brands and retailers to adopt both companies’ services together. PayPal said it’s a move to expand in the headless commerce market, which describes solutions that allow merchants to operate stores without a front-end layer.
How will it work? The companies described the integration this way:
Brands and retailers can use Bold Commerce’s headless checkout suite with the PayPal Commerce platform.
This brings together payments and checkout in a “single pre-integrated solution.”
Merchants can launch sales beyond their own website by integrating checkout in places like blogs, social, and QR codes on packaging.
Through a single service, brands and retailers can accept payment options including PayPal, Venmo and PayPal Pay Later solutions, as well as credit and debit cards.
Key quote from PayPal VP and Global Head of Channel Partnership David Bruce: “Payment choice and flexibility have always been a critical part of a successful commerce experience – but it’s only one part of the equation. Retailers today need to also offer a tailored checkout experience to help drive increased conversion. It’s a powerful combination for a composable checkout to plug into any tech stack.
What it means for ecommerce: The partnership highlights several key trends playing out in the market today:
Headless commerce: In a past generation, retailers built monolithic ecommerce systems with a host of interconnected parts. The cloud and API-driven architecture is ushering in a new paradigm where brands and retailers can separate out different components, and select what best fits their needs. The market is moving toward this, especially in the enterprise segment that long required custom-built systems for scale and category needs. The entrance of PayPal signals that longtime ecommerce platforms are building for this shift. Meanwhile, Bold Commerce itself has 9,000 brands and retailers on its platform, including Vera Bradley, Staples Canada, Pepsi, and Mars. This follows a move by Shopify to launch composable product suite Commerce Components with a focus on checkout earlier in January.
Checkout anywhere: Content brought commerce to platforms beyond ecommerce stores, enabling ads on social platforms and brand placement in posts. More recently, more of that content has become shoppable, allowing users to browse and start a purchase right within a piece of media. A solution like the Bold Commerce and PayPal integration takes another step, embedding the ability to finish a purchase by checking out right inside that content. It shows how ecommerce is becoming more embedded in the experience of the internet, as opposed to existing on specific stores and marketplaces.
Fighting cart abandonment: The ability to check out through media is enticing to ecommerce leaders because they want to reduce the touchpoints and time between a person showing interest in an item and completing a sale. Bold Commerce found over half (53%) of consumers abandon checkout before making a buy. This is a long-standing issue, but signals that perhaps there is another technical step being taken. It’s one thing to make checkout easier; It’s another to bring it directly to the point of discovery.Subscribe to The Current Newsletter
SubscribeTrending in Operations
Retail Channels
7h
Macy's sees 'reset year' for ecommerce
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.
Keep reading...Show less
Loading...
Subscribe to The Current Newsletter
SubscribeLatest from Operations
May 18, 2023
.sticky-cta-wrapper {
width: 100%;
position: fixed;
bottom: 0;
left: 0;
background-color: var(--black);
}
Subscribe to The Current newsletter