Against the larger backdrop of the coronavirus pandemic, shelter-in-place orders and shuttering of businesses, people have been staying at home.
Because of this, Bjorn Ovick, chief commercial officer at RS2 Software, told PYMNTS that merchants across all manner of verticals are shifting to a direct-to-consumer (D2C) model.
You might call it the great pivot.
“There’s uncertainty to how long this will be,” he said of the hunkering down, “but people are anticipating it is going to be a fairly long stretch until things are back to normal.”
That means businesses will have to shift to where the opportunities are, said Ovick — not just to stay afloat but to take advantages of shifts in commerce that will long outlast the pandemic.
Merchants, he added, will need to quickly adapt to a card-not-present (CNP) environment if they have yet to do so.
“They will also have to look at how to provide services ‘into the house’ and into the consumers’ lifestyle at this new interaction point,” he said.
He pointed to the fact that consumer packaged goods companies now must address a new urgency of getting their offerings to consumers directly, where they might have previously relied on marketing and placement activities focused on shelves at grocery and big box stores.
Service-oriented firms have also had to shift gears, he said, recognizing the opportunity for increased adoption of subscription offerings such as exercise classes.
Along with the pivots come the complexities of having to manage and offer new ways to pay, which means that independent software vendors (ISVs) and payment facilitators (PayFacs) have to examine how they can support their merchant clients.
As Ovick told PYMNTS, “there are challenges in moving from a brick-and-mortar environment to a face to face, virtual environment.”
The ripple effects can be widespread throughout an organization, he said, where a local retailer, for example, needs to set up online search menus, put their clothing online and then offer new payment types. They may even have to offer a broadened range of delivery options, such as curbside pickup or home delivery — tapping into a third party to complete the very “last mile” of the journey.
Perhaps, no surprise: Data is key.
As Ovick told PYMNTS, “it’s critical for the ISVs to be able to work with their clients and understand who their end customers are — and how they can be engaged, now, via the virtual channels.”
Parsing the data can be done with speed and in a streamlined manner, with the right technology in place.
Application programming interfaces (APIs), he said, represent an “easy layer to use, to talk between systems, as they have common language and common infrastructure to integrate into, speeding up the deployment of new capabilities.”
Each industry and vertical that the ISV services has different payment needs, said Ovick, who added that payments need to fit into that process of consumer engagement.
He offered the examples of ordering ahead, where payments are collected upfront before an item is picked up in-store or curbside.
In that case, he said the payment aspect must be embedded upfront. A second example, subscription payments, requires monthly billing.
That billing cycle requires a much different process for an ISV to embed that offering in its application — and it’s made easier with APIs.
Looking at the other side of the pandemic, said Ovick, with a more flexible range of payment options and ancillary services in a merchant’s omnichannel toolbox, new revenue opportunities emerge.
For large-ticket purchases, he said, it’s important to offer instant financing, which can speed up transactions and provide benefits to both the consumer and the retailer.
And in another example, clothing retailers can offer a “try on before you buy” option, he said, which caters to in-home commerce.
That’s a much different payment experience as well, he said, because a retailer would collect the payment information upfront but not charge the card, getting an authorization first, but not collecting payment for perhaps 15 days after that initial interaction happens.
“These are all opportunities for ISVs to capture and drive forward,” Ovick told PYMNTS.