The pandemic has caused an incredible amount of change in a very short space of time for the retail sector – driving as much change in a year as we would typically see in a three-to-five-year period.
For smaller retailers, a natural shift during lockdown was to move their operations online to open up new revenue streams. One of the challenges that comes with this transition, however, is the heightened competition against more established ecommerce brands. There are more businesses trading online than ever before, and in some sectors the battle for consumer spend has become increasingly competitive.
As the competition remains fierce across the board, it’s imperative retailers do not lose out on customers at the checkout phase, especially when payment is about to be made. In fact, recent Barclaycard Payments research showed that retailers have missed out on £39.4bn of sales in online abandoned baskets over the last 12 months.
There are many reasons why consumers drop out of the process at the point of purchase, or don’t complete the checkout process. Our study revealed that customers discovering high delivery costs at the last minute is responsible for 37 per cent of abandoned purchases, while ‘cyber window shopping’ and lengthy authentication processes account for 26 per cent and 24 per cent respectively.
The data also showed that only 69 per cent of merchants are able to identify the average basket abandonment rate on their website. While this is a significant improvement on 25 per cent from the same research three years ago, it means that nearly a third of online retailers are missing out on important insight to help convert sales.
As part of our research and our drive to provide actionable tips to ensue customers make it to the checkout and beyond, we teamed up with retail expert, Clare Bailey, to produce seven top tips that can help retailers maximise online sales and minimise abandoned baskets.
- Review your delivery charges against the basket value and total customer value – customers will abandon their basket if they feel a delivery charge is not proportionate to the overall basket value, or, if they know a competitor can offer free delivery.
- Utilise remarketing techniques and incentives to buy now – customers respond favourably to discount codes and other special offers. While on the one hand you are giving away some margin, on the other you are closing the loop on cyber window-shopping, securing that customer and preventing them from going to the competition.
- Make it easy to transact – a lengthy process to complete an order is a complete turn-off for customers! Minimise data capture to maximise transaction completion – once you have secured the transaction you can always invite the customer to sign up to a loyalty scheme or similar in order to learn more about them.
- Weigh up the cost of developing and maintaining an app with the sales you are losing – for some, an app adds a new channel and is exactly the format their consumers love; for others, it is a costly choice that isn’t right for their customers.
- Improve the convenience of the payments process – don’t let the difference between you and your competitors be because they offer a more frictionless payment experience. Incorporating a “swipe to buy”, or a better online payment gateway, are ways to reduce basket abandonment.
- Know your customers – it sounds obvious but, as this research shows, so many businesses simply do not properly analyse their customer data to understand their behaviours and preferences. A wealth of insight is sitting right there in your website analytics – use it effectively to be more customer-centric.
- Be secure – with customers so much wiser to the need of protecting their personal data, retailers must ensure that they adopt all the latest standards and practices to protect customers. A single data breach could result in a huge loss of sales should customers feel they cannot trust you – so do not underestimate the importance of security.
Combined, guidance and solutions that help support small businesses to succeed online are key. After all, if ecommerce is the future of all business, then the process of futureproofing needs to start now.
Marc Pettican, President, Barclaycard Payments