Nearly half (46 per cent) of retail revenue now comes from e-commerce sites as the pandemic forced bricks and mortar retailers to close their doors, according to new research.

A survey of 2,500 European retailers for payments service provider Mollie also found that one of greatest challenges presented by online retail is converting shoppers to purchase, with 65 per cent citing this issue.

A further 43 per cent rated high costs for shipping or payment providers as a major challenge while 41 per cent selected low margins.

And for a third of online retailers (34 per cent), cart abandonment is the biggest challenge with 30 per cent reporting that 6-10 per cent of carts were abandoned.

The research found that the importance of online across numerous channels has grown, with 37 per cent of sales occuring via third-party marketplaces such as Amazon. As much as 16 per cent of annual revenue now comes through social media platforms like Instagram.

However, the retailers also highlighted the fact that the payments process can hurt sales and growth, with 31 per cent saying that an issue with the payment service offered or the range of payment service options provided was the reason for abandoned carts.

A further 41 per cent cited a lack of innovation in payment systems as hindering their business’ growth.

Despite this, retailer are exploring alternative payment options, with Buy Now Pay Later (BNPL) services now offered by more than a fifth of retailers.

In response to consumer demand for more flexible payment options, 22 per cent of retailers now offer ‘buy now, pay later’ or Apple Pay payment methods, and further 20 per cent offer Google Pay.

This figure is set to increase with 31 per cent looking to improve payment systems to help grow online revenue within the next 12 months.

Josh Guthrie, UK country manager at Mollie said: “The retail sector has had a difficult year and this is reflected in the findings which expose a multitude of challenges and areas for development.”

“As the market also comes to terms with the Brexit deal, the ability to adapt and grow under pressure is paramount. To weather the storm, retailers are smartly looking to offer consumers a broader range of payment options to improve the checkout experience and cut cart abandonmen. By embracing this digital innovation, merchants can help bolster growth and ensure that 2021 is a better year for sales and revenue than the last.”

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