Digitally-Led Mid-Tier Merchants on Track to Win Global Innovation Race, Research by ACI Worldwide and Ovum Reveals
October 09 2019 - 02:00AM
Business Wire
Trailblazing merchants focus heavily on
payments innovation, including new payment options, a mobile focus,
and a seamless cross-channel payment experience
Digitally-driven mid-tier merchants that are able to bring new
and innovative products and services quickly to market as well as
deliver a consistent focus on customer experience are winning the
global innovation race, new research by ACI Worldwide and Ovum
reveals. According to the Culture of Innovation Index, 37 percent
of mid-tier merchants with annual revenues between $5bn and $10bn
are either ‘Advanced’ or ‘Trailblazers’ when it comes to
innovation, whereas 23 percent in this group are classified as
‘Laggards.’
The index identifies five types of organizations, as defined by
their approach to innovation and business transformation: Laggards,
Emerging, Tech-led, Advanced and Trailblazers. When it comes to the
world’s largest merchants, the situation reverses: 37 percent of
merchants with annual revenues of at least $10bn are ‘Innovation
Laggards;’ 22 percent are classified as ‘Advanced’ and only 8
percent are ‘Trailblazers.’
“Digital-led mid-tier merchants may well be on the way to
becoming the super-merchants of tomorrow,” commented Andrew
Quartermaine, vice president, Merchant Retail, ACI Worldwide.
“Today, growing numbers of consumers globally expect a digital-led
shopping experience. Businesses that have a strong digital presence
and strategy, whether they are big or small, will therefore have
the edge in today’s competitive environment.”
While there is no single formula for driving innovation within
an organization, the Merchant ebook - How to become a Payments
Trailblazer outlines seven key characteristics of ‘Trailblazing’
Merchants - the most innovative enterprises – that stand out from
the rest of the market. Among those key features are: a strong
central function tasked with driving innovation, an agile culture
that is responsive to customer needs, taking advantage of emerging
technologies and focusing on customer experience by bringing
innovative products and services quickly to market.
“There is no single recipe for success in today’s new retail
environment, but our research provides a blueprint for what the
most innovative and successful merchants do right,” continued
Quartermaine. “Catering to a growing customer preference for
digital-led or digital-influenced purchasing is key. This includes
new payment options; a focus on mobile, especially in-store, and a
stronger, more seamless cross-channel payment experience.”
Other key findings:
Overall merchant performance
- Overall, the merchant segments (telecoms, retail, digital goods
and hospitality) featured in the Culture of Innovation Index are
spread across the Laggard, Emerging and Tech-led categories,
placing them behind fintech, retail and corporate banking in the
overall ranking
There are significant regional differences in terms of
innovation
- In Europe, 35 percent of all merchants are classified as
Laggards, compared to 30 percent globally. European retailers
particularly fall behind their global peers, with 43 percent in the
Laggard category, reflecting the challenges that many have faced as
a result of the rapid shift in customer habits toward
eCommerce
- In contrast, merchants in Asia-Pacific are highly focused on
investing in technology; 32 percent fall into the Tech-led group,
with 26 percent in the Advanced category; only 19 percent are
Laggards
- Merchants in the US are polarized, with 34 percent falling into
the Laggards and 16 percent into Trailblazers category, reflecting
the growing gap between more traditional merchants and many of the
more digital-native businesses
Customer experience is key
- Innovation in payments is focused on areas that enhance
customer experience – new payment options, a focus on mobile
(especially in-store), and a stronger, more seamless cross-channel
payments experience
- Security initiatives like PSD2 and SCA are driving the need for
technology innovation in order to balance fraud prevention with
maximizing conversion rates; regulatory requirements may drive
merchants to close the innovation gap relative to banks
*Methodology: The Culture of
Innovation Index, based on interviews with senior executives in
close to 1,200 enterprises, scores each organization based on its
plans and behaviors across a range of cultural, organizational and
technology-centric factors. For the Merchant segment, 538 merchants
globally were surveyed: 237 retailers, 100 merchants from the
digital goods sector, 74 from the hospitality sector and 127 form
the telecoms sector.
Interviews covered a range of topics relating to two broad
themes: Inputs to the innovation process (cultural and
organizational drivers of innovation, particularly the way that the
organization is structured with respect to identifying changing
customer needs, competitive challenges and new market
opportunities) and Outputs from the innovation process
(outcomes from the process, in terms of factors such as the
adoption and investment in emerging technologies as well as
specific product innovation relating to the business area in
question). Across the study, the responses to more than 100
individual questions were scored and weighted to produce combined
scores for each of the Input and Output categories.
About ACI Worldwide ACI Worldwide, the Universal Payments
(UP) company, powers electronic payments for more than 5,100
organizations around the world. More than 1,000 of the largest
financial institutions and intermediaries, as well as thousands of
global merchants, rely on ACI to execute $14 trillion each day in
payments and securities. In addition, myriad organizations utilize
our electronic bill presentment and payment services. Through our
comprehensive suite of software solutions delivered on customers’
premises or through ACI’s private cloud, we provide real-time,
immediate payments capabilities and enable the industry’s most
complete omni-channel payments experience. To learn more about ACI,
please visit www.aciworldwide.com. You can also find us on Twitter
@ACI_Worldwide.
© Copyright ACI Worldwide, Inc. 2019 ACI, ACI Worldwide, the ACI
logo, ACI Universal Payments, UP, the UP logo and all ACI
product/solution names are trademarks or registered trademarks of
ACI Worldwide, Inc., or one of its subsidiaries, in the United
States, other countries or both. Other parties' trademarks
referenced are the property of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20191008005626/en/
Katrin Boettger E-mail: katrin.boettger@aciworldwide.com Phone:
0044 (0)7776 147 910 Dan Ring E-mail: dan.ring@aciworldwide.com
Phone: 781-370-3600
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