PayPal’s Magats: 2021 Is The Year Of Three-Dimensional Commerce

When we think about what made the holiday shopping season different in the year 2020, it isn’t just how highly digitized it was. Consumers’ shift to digital channels was apparent, of course — according to the PYMNTS/PayPal Holiday Retrospective Report, over 80 percent of consumers did at least some of their shopping digitally, while 40 percent reported shopping less in a physical store than they ever had.

But the real seismic shift, PayPal SVP of Omni Payments Jim Magats told Karen Webster in a recent conversation, wasn’t just a temporary channel switch-up forced on consumers and merchants by the necessity of the situation — it was a preview of what the new cross-channel consumer journey will look like, and what merchants will have to offer to keep up with customers’ needs.

The Great Shift To Omnichannel

“2020 was the year where this idea of omnichannel and retailing really got scale — where you basically create a three-dimensional experience between what has historically been a siloed online experience on your computer desktop and that of a physical store,” Magats said. “I think people are getting very comfortable with the idea of using a digital version of what they have used physically, with all of the different funding options and opportunities for choice.”

In fact, he noted, consumers haven’t merely gotten used to these three-dimensional shopping journeys and the plethora of choices in how they transact with merchants — they’ve come to like, expect and even prefer them to the old way of doing things.

Anecdotally, Magats said, consumers intuitively know what they want from their shopping experiences. When a customer puts a black T-shirt in his shopping cart online, he expects that T-shirt will be waiting for him in the store when he arrives the next day. And it works in reverse, he noted: The same customer who tries on a shirt in the store and scans it into his cart expects it to be there and ready for purchase when he logs on at home.

Whether they’re aware or not, consumers are moving into this next phase of omnichannel, where they are seeing how much their commerce can move with them and enable them to customize their journey when it comes to buying, picking up or even returning a product, said Magats. These are the next phases of commerce that were first becoming apparent during holiday 2020, and which Magats expects will be dominant by the time the 2021 holiday season rolls around.

Omnicommerce Creates New Contexts For Commerce

It’s a change already in evidence today, according to the PayPal/PYMNTS report. Consumers are shopping across channels more than ever — and though some will revert in a post-pandemic period, the data shows that far more will not. The digital and omnichannel reformation is not a phase, fad or “one-off.”

What felt like anomalous behavior two months into the pandemic, said Magats, is now habituated behavior. At the 12-month mark, consumers have found it easier to manage their lives through digital channels. That means merchants are out of options when it comes to hitting the gas in digitizing their operations. Despite how profound the digital transformation of the last 12 months has been, Magats pointed out that there is a still a sizable contingent of merchants who have yet to really jump in.

“Look, if you’re not digital, please go digital,” he said. “About a third of all merchants still have no digital presence. I know that may sound like a shocking number, but that’s the case. And you look at the number of new merchants that we’ve seen jump on this year — it stands at about 15,000 a day. It is no longer a nice thing to have: You have to have it. And then once you go digital, the next important piece is integrating the digital and physical together.”

That integrated journey, he said, will mean the context for commerce will span out in ways it never has before, as merchants rush to be every place online and off that their consumers are and look for points at which they can convert them.

And that can be a complex journey, because it involves things merchants have never had to consider before. Are their back-office systems integrated between physical and digital channels? Are they set up for returns? The big consideration to keep in mind as the context-dominated future of commerce unfolds, is whether they can create a seamless experience for the customer who is ordering from the couch at 11 p.m., or the shopper who shows up at a store location at 9 a.m.

But Magats believes the challenges are worth it, because the omnichannel journey will allow merchants to better understand their consumers’ preferences and better serve them in the future.

“The future will be ruled by three-dimensional commerce — mobile, computer and in-person,” said Magats. “All those have to work together, because that’s where the consumer is and where they will be going forward.”