Retailers say poor payment strategies mean shoppers leave emptyhanded
More than half of retailers believe that shoppers leave transactional websites empty handed because of poor checkout experiences, a new study suggests.
Some 52% of 100 UK retailers questioned for a study from Ovum and Klarna
said that friction in the online checkout is the biggest reason that shoppers abandon baskets online. Some 40% blamed a lack of payment methods and 39% said a lack of lending or credit options stopped consumers completing their payment.
Retailers believe that increasing the range of payment and financing options is the key route to ensuring more consumers make it through the checkout process, and lower the rate of basket abandonment affecting UK retailers. Some 98% of merchants said consumers want new and easier ways to pay online and 78% of merchants said they would like to introduce consumer finance at the point of sale - although 85% said this last option was too complicated and expensive.
However, consumer appetite for more varied payment methods is strong, according to consumer research from Klarna: it found that 53% of 2,000 online shoppers questioned said they were looking for new and easier ways to pay online, while 56% of consumers said they would buy more online if there were more varied payment options available.
Retailers taking part in the study estimated that almost two-thirds (65%) of retail sales would take place online by 2019. Sales made on mobile devices rose by 350% in two years, increasing from 1.8% in 2015 to 8.1% of total sales today amongst retailers surveyed. They predict that by 2019, well over one in ten (12.8%) of all retail sales (both in store and online) will be made on mobile and in preparation, nine out of 10 retailers today are currently investing in mobile payment capabilities to stay competitive.
The explosion in mobile shopping, finds the Klarna consumer research, is being driven by digital natives, such as Millennials and Generation Z (18 to 34-year-olds), which now account for over half of all online retail purchases in the UK. This compares to 30% for generation X (35 to 50-year-olds) and just 10% for baby boomers (50 to 70-year-olds).
Some 90% of merchants say that meeting the demands of millennials is driving investment in new payment technologies.
Fashion in particular is emerging as a major battleground to win millennial loyalty, with 95% of retailers upping their investment in tech to meet their expectations.
Luke Griffiths, UK general manager at Klarna
, said: “This data shows that simple things such as a tricky checkout process or lack of payment options can turn off today’s consumers. But there is much to gain for retailers who get this right – consumers will spend more if the payment process is smooth and stress free."
Gilles Ubaghs, principal analyst with Ovum
, said: “The UK is amongst the most dynamic and competitive markets when it comes to online and mobile shopping. The fierce levels of competition, combined with an increasingly demanding customer base driven by millennials, is now leading to more experimentation in how we pay. It’s getting harder for retailers to stand out online - improving payments and offering new ways to finance purchases is undoubtedly becoming a critical component of the ecommerce landscape.”