Source: Barclays Bank
Research from Barclaycard Payments reveals that UK retailers have lost out on more than £39.4bn in potential sales over the last 12 months, as lockdown sees the value of online abandoned baskets more than double since 2018*.
New research from Barclaycard Payments, which processes nearly half of the nation’s credit and debit card transactions, reveals that high delivery costs added at the last minute are to blame for 37 per cent of abandoned purchases, with cyber window shopping (26 per cent) and lengthy payment authentication processes (24 per cent) also increasing the likelihood of customers dropping out at checkout.
The data shows 71 per cent of retailers who know their website’s online abandonment rate have improved their analytics software to better understand customer behaviour and tackle this drop out, with 58 per cent of this cohort doing so within the last twelve months. These improvements were essential for 76 per cent of merchants who saw the opportunity to leverage online sales while their physical stores were closed - with Barclaycard Payments seeing 50 per cent of its transactions now come through e-commerce channels, up from 40 per cent at the start of the pandemic.
The findings also show that data analytics software could be used more effectively by retailers, with only 69 per cent able to identify the average basket abandonment rate on their website. While this is a significant improvement from 25 per cent when the same research was conducted three years ago, it means that nearly a third of online retailers are still missing out on this important insight to help convert sales.
However, with better understanding of basket abandonment rates, many retailers are starting to act to improve these figures. Almost half (49 per cent) have reduced the number of steps to checkout, with a similar amount (48 per cent) now sending automated emails to remind customers about abandoned items.
Change makers rewarded
The benefit of adapting operations based on customer tracking is shown by those that have enhanced their payments offering. Over half (53 per cent) of retailers have introduced a digital wallet, for example Apple Pay or Android Pay, with a similar number optimising their website for mobile use (49 per cent) or making improvements to an app (47 per cent). These changes are paying dividends. Those that have invested in introducing an app, or improving an existing app, have seen basket abandonment fall by 16 per cent; investing in an improved ecommerce gateway reduced the rate by 15 per cent; and introducing ‘swipe to buy’ similarly decreased dropouts by 15 per cent.
This reflects consumer data, where the merits of a dedicated retailer app are clear, with shoppers least likely abandon a basket on an app (5 per cent compared to 31 per cent on a laptop). Discounts given in exchange for downloading apps (23 per cent), feeling less distracted using them (18 per cent) and finding them easier to navigate (18 per cent) all decrease the likelihood of ditching a purchase. In addition, 22 per cent report only downloading apps from their favourite retailers, which naturally reduces the amount of competition per purchase.
The UK’s ‘most abandoned’ items online
The research also highlights the most commonly-abandoned items, with commitment-shy consumers piling up homewares (34 per cent), smart clothing such as suits and dresses (31 per cent), gadgets (29 per cent), party outfits (23 per cent) and holiday wardrobes (23 per cent). Many have then logged off and left their shopping unpurchased due distractions from other shopping items (22 per cent) or forgetting what’s in their shopping basket altogether (18 per cent).
With the deadline for implementing SCA (Strong Customer Authentication) looming in September, resulting in two-factor authentication for many purchases, it’s crucial that retailers look to reduce friction at the check-out with a service that works with their online payment gateway. Barclaycard’s Transact is one such service, which speeds up the payment process by verifying genuine transactions more quickly, thereby reducing basket abandonment.
Marc Pettican, President of Barclaycard Payments, said, “Online shopping has traditionally been the convenient alternative to bricks and mortar, but as ecomm has boomed during the pandemic, so too has the number of purchases abandoned at the checkout. An increase in choice, slow lengthy payment processes, and websites which are difficult to navigate have all contributed to shoppers deserting their shopping at the last minute.
“To help convert sales, retailers can look to leverage a single, unified payments provider to reduce friction at the point of sale, while also offering shoppers a variety of ways to pay. With the SCA deadline on the horizon, easy-to-integrate technology, such as Barclaycard’s Transact product which works with existing payment gateways to reduce the number of steps at the checkout, is one way to help combat basket abandonment - and increase shopper satisfaction at the same time.”
Claire Bailey, Independent Retail Expert, said, “This research provides retailers with invaluable insights that could help them buck the growing trend of basket abandonment. Ensuring payment processes are as streamlined as possible should be a major priority for all online businesses, because every extra second it takes customers to checkout increases the risk of lost revenue.
“Having a dedicated app also has a significant impact on decreasing the number of items abandoned in baskets. With the increased volume of online traffic, retailers should ensure they are set up to reap the benefits, not the empty baskets.”