Online retailers could be losing out on a potential £18bn a year because customers are putting items in their baskets but then are not going through with the final purchase.
A growing trend of online window shopping has been identified by new research from Barclaycard, which claims Brits abandon online baskets worth almost £30 a month, amounting to billions of pounds of lost sales each year.
It claimed that many vendors are also missing the data or insights they need to tackle the online conversion challenge.
The study found shoppers are more fickle when buying online with 41% having abandoned a transaction at a virtual check-out in the last year, compared to 24% who have walked away from a purchase in-store.
Yet, despite a clear opportunity to engage online consumers to help combat the ‘surf and turf’ trend, nearly 60% of retailers are unaware of the average buyer drop-out rate on their website and just 27% analyse the browsing behaviour of shoppers who abandon their baskets.
This knowledge gap is also evident when it comes to identifying specific shopper behaviours online, the study claimed. Three in ten merchants struggle to name the month when their website sees the highest level of shopping basket abandonment, while 37% are unable to identify the time of day when drop-outs peak.
The most popular tactics retailers use to tackle basket abandonment are automated email reminders (30%) followed by a shopping basket ‘expiry period’ (19%) – which a further three in ten (29%) have plans to introduce in the future. For those that have taken this step, the average expiry period is 66 hours.
Clare Bailey, independent retail expert, comments: “It is so important that retailers not only invest in marketing to drive footfall to their websites, but also in their payment process to ensure that the online shopping experience is as seamless and hassle-free as possible.
“In the same way that consumers can lose interest in a purchase when buying in-store due to long queues, they are also put off by confusing and long check-out processes online.
“As such, retailers don’t want to waste their efforts in helping customers get items into the basket only to fall at the final hurdle when customers drop out because of problems at the check-out.”
George Allardice, head of strategy at Barclaycard Payment Solutions, adds “Online basket abandonment rates are a perennial problem for online retailers, but as consumers increasingly shop via retailer websites, it’s becoming ever more important that merchants are equipped to combat this challenge.
“There are many ways retailers can convert online interest into sales – whether this is reminder emails about items left in online baskets, reducing the steps required to check out online, or securely storing card details so shoppers don’t need to re-enter them every time they visit a site.
“These actions will be most effective if they are based on insights about shopper behaviour, but as our research shows, there’s currently a knowledge gap that could be holding businesses back. Data from payment gateways such as Barclaycard Smartpay helps retailers to identify ecommerce pain points and make important steps to boost online sales.”
The report revealed watches are the fifth most common item that people go to purchase online, but then abandon before checkout.