GUEST COMMENT The basket case: how retailers can capitalise on the mobile opportunity
Online retail spend shows no sign of slowing down. It’s a trend confirmed by eMarketer, the global market research firm, which a few months ago published an analysis on the state of UK ecommerce
. The study names the UK as a world leader in e-commerce, and predicts that by 2020, digital retail sales will represent almost a quarter (22.6%) of total retail sales.
Smartphones are the driving force behind these digital purchases, with the rise in on-the-go shopping meaning m-commerce sales are predicted to exceed £25.2 billion this year. It’s clear that the nation’s reliance on smartphones and demand for convenience is radically changing the way UK consumers are shopping – as well as helping to offset a decline in the traditional bricks and mortar retail sector. So what can retailers do to best capitalise on the lucrative mobile opportunity?The dropped basket case
One of the biggest challenges facing retailers is online dropped baskets - where consumers drop out of the buying or checkout process before completing their purchase.
Recent research we conducted showed that over two-thirds (68%) of consumers have abandoned a shopping basket online. Last year, it was estimated that this costs retailers approximately $4 trillion globally
. With a massive 63% of those baskets potentially recoverable, it’s a huge challenge – but also a big opportunity – for savvy online retailers.
To help businesses make sense of the dropped basket case, we asked consumers why they abandon their baskets. The findings shed new light on consumer spending habits and shopping choices across devices, and showed that offering choice and flexibility are key for retailers hoping to cash in on a chunk of the customer’s wallet and convert more sales.Simplify the buying experience
It’s said that the average adult’s attention span is now just eight seconds long
. This means that today’s empowered and time-poor consumer – particularly those shopping on-the-go - no longer have the patience to go through lengthy sign up processes or multi-step checkouts.
Simple factors such as consumers not having their details to hand are now reason enough for 19% of the shoppers we surveyed to abandon a basket. Other reasons included the checkout process taking too long (13%) and retailers not offering a customer’s preferred payment option (12%).
The good news, however, is that these problems are easily fixable.
It’s crucial that retailers make both the buying and paying experience as painless as possible. The more loops a customer has to jump through, the less likely they are to make it to the confirmation page. Similarly, a customer making a purchase on-the-go via mobile is unlikely to finish the payment process if they need to pull out their wallet and input their card details in public.
Retailers looking to simplify the buying process could consider partnering with a third-party payment provider who can help solve these dilemmas. Options can range from introducing a “digital wallet” that automatically saves a customer’s payment details, setting up simple one-click payments, or using smart data to remember the customer’s preferences during the checkout process.
Retailers could also support customers looking to offset the immediate costs of purchases by offering a monthly re-payment scheme or a “buy now, pay later” option. As well as the financial flexibility to the customer, it also adds a convenience factor – customers can make a purchase on-the-go and fill in their payment details further down the line.Channel optimisation
With a huge number of online sales now coming from a mobile device, retailers need to ensure they are providing channel responsive messaging and functionality for consumers shopping on their smartphones - whether it’s offering mobile optimised design, tailored offers or punchier content. Design-wise, retailers can also incorporate functionality specific to mobile behaviour, such as swipe to like and short-term surveys.
Growing use of smartphone shopping is also an opportunity for brands to inform the customer’s journey across all channels. A customer may start their journey on one device and then go on to complete the purchase on another. Using progressive data collection means brands can effectively target consumers across all devices, informing the journey every step of the way, and making the experience as seamless as possible.Flexibility is key
M-commerce represents a prime chance for retailers to get ahead and own the smartphone shopping process. One of the key ways of avoiding dropped baskets is giving the consumer greater choice and flexibility in their mobile shopping habits. By offering a customer-centric experience, retailers will not only increase their conversion rates, but also help establish long-term loyalty. Luke Griffiths is general manager of Klarna UK