Is ‘window shopping’ online a curse or an opportunity for retailers? Barclaycard’s latest research shows it’s got the potential to be both, depending on the level of insight retailers have into customer behaviour.
With each UK shopper abandoning online shopping baskets worth an average of £29.37 every month, it’s critical for retailers to understand why, and to combat the problem with a strong retail payment strategy.
This is especially true for ecommerce retailers because shoppers are notoriously more fickle when shopping online; when they haven’t made a tangible, emotional connection to a product or brand. In fact, 41% of online shoppers abandoned a transaction in the last year*, compared to 24% of customers who walked away from a purchase in store.
Despite these high abandonment rates, six in 10 retailers (59%) don’t know how many people abandon their shopping baskets online. And only 27% analyse the browsing behaviour of customers who don’t complete their purchase.
This missing insight is a big reason why so many retailers aren’t able to tackle the conversion challenge. And with so much data available now, there’s really no excuse not to know your customers, understand their behaviour and meet their expectations in order to reduce basket abandonment and increase conversion rates. Not knowing customer behaviour is costing retailers £18 billion in potential sales each year.
Common reasons why consumers abandon online baskets
Interestingly, the lack of customer behaviour insight among many retailers goes deeper than not knowing why browsers fail to become buyers. Three in 10 retailers (31%) would find it difficult to pinpoint when their website sees the highest level of basket abandonment. A similar number (37%) can’t identify which time of day basket abandonments reach their peak, 45% don’t know whether they’re losing more sales to men or women, and 41% can’t pinpoint lost sales by age group.
The upshot is that there are a lot of gaps. And with gaps come opportunity.
Two of the most popular tactics retailers use to reduce basket abandonment are:
1. Automated email reminders – 30% of those asked use this method, and
2. Shopping basket expiry periods – 19% of those asked use this method, with a further 29% having plans to introduce this in the future.
And while these can be very effective strategies, access to rich data and insight into customer behaviour can be the driver in deciding what methods might work best to reduce basket abandonment.
Crucially, the right payment gateway can help capture payments data and provide retailers with a single view of each customer’s purchasing behaviour across all sales channels. It’s this single customer view that can really drive an effective payments and conversion strategy. Find out more with our in-depth gateway guide.
All statistics referred to throughout the article have been sourced from the main Barclays study, published 17 April 2018.
*Consumer research was conducted by Opinium surveying 2,001 adults (18+) from 26/03/2018 – 03/04/2018 with a sample of 2,004 people who have abandoned an item online. Merchant research was conducted by Opinium surveying 314 senior managers in retail (companies with an online presence) from 26/03/2018 – 05/04/2018.
Find out how the right payment gateway can improve your customer experience and increase conversions