Sep 7, 2017
Streamlining e-commerce could make UK retailers £10.5 bn more over next 5 years
Sep 7, 2017
Retailers in the UK can generate over £10.5 billion more in the next five years by streamlining online purchasing, according to Barclays Corporate Banking Online Retail Report, From Browse to Buy: The Conversion Challenge. British retailers are losing out on £3.4 billion worth of goods left in virtual shopping baskets each year, as two thirds of the contents of all virtual shopping baskets are abandoned, adds the report.
Across all devices, 86 per cent of browsers save items to online shopping baskets and wish lists but consumers switching from mobile phone browsing to laptop purchasing, a lack of discount incentives and desire for a variety of delivery options are key reasons for ‘basket abandonment’, as per the report. More targeted investment in the strategies identified by consumers as most effective in encouraging them to complete a sale could help turn more browsers into buyers.
The findings from the research are based on the views of 300 senior retail managers, 2,000 UK consumers and economic modelling.
At an uncertain time for the retail sector, the report estimates that investing in measures that encourage purchase conversion could cut basket abandonment in half by 2021. Furthermore, instead of fiddling around with mobile sites that aren’t optimised, or wasting time searching through a difficult to navigate website, 614 million hours of time could be saved over the next five years. There are productivity benefits too to the tune of £4.2 billion, as time is freed to devote to other work or recreational activities.
“At a time when cost management is a priority, it’s understandable that investment in mobile optimisation may seem too expensive for many retailers. However, the research underlines the longer-term benefit of providing easy to use options across all online platforms. By adapting quickly to the needs of today’s consumer to create a better shopping experience online, and particularly via mobile, retailers will boost their sales,” said Ian Gilmartin, head of retail, Barclays.
“If they get their online strategy right, we could be looking at UK retailers selling more than £80 billion of stock online by 2021, but that will only happen if as an industry we respond to what the public want from us. This research shows that a streamlined mobile offering, flexible delivery and competitive pricing can help convert more browsers to buyers,” added Gilmartin.
The British retail sector boasts the highest proportion of online sales of any major European country. the research found that UK residents browse online for an average of 89 minutes per week with 45-54 year olds leading the way, clocking up just over 100 minutes per week. Although overall, more online retail browsing occurs during the week than at the weekend, the single most popular day for browsing is Saturday. The most popular time of day to browse is the evening, with a third of shoppers (30 per cent) doing most of their browsing between 5pm and 9pm.
Only 16 per cent of retailers claim that they will make mobile sales their top priority in the next year, but consumers are calling out for retailers to introduce mobile apps to simplify the purchasing process. A more streamlined process overall would also make 28 per cent of consumers more likely to complete a purchase.
This perhaps explains why consumers are avoiding purchasing products through a fiddly mobile website, but have a preference for ‘device switching.’ Whilst a third of consumers browse for products on their mobile, they are likely to then switch to another device, such as a laptop, in order to make a purchase.
Consumers are clearly looking for the fastest and simplest way to buy, as providing personal registration details at checkout was another bug-bear. About 13 per cent say that not having to provide registration details at checkout would encourage them to purchase.
It might seem that retailers are not aware of consumer preferences, but they also listed high IT costs as a barrier to investment. This may explain why only 19 per cent say they would develop a dedicated app. In fact, the report showed that more retailers are bucking the trend for online retail and prioritising their in-store sales instead (79 per cent) over the next year.
However, optimising the online purchasing process is not the only way to turn browsers into buyers. More traditional methods were also shown to increase consumer incentives to buy items saved in their wish list/shopping baskets. Interestingly, these traditional methods were more significant for consumers than the use of modern technologies.
Echoing the theme of time-saving and convenience, these consumers prefer flexible delivery options. Free delivery (56 per cent) and returns (29 per cent), next day delivery (17 per cent) and click and collect (15 per cent) are all options which consumers say would make them more likely to purchase.
Unsurprisingly, price was likely to have a huge impact on the final decision to purchase. Just under half (43 per cent) of these consumers say that they would not complete a purchase because they were waiting for a better deal or offer. Over 38 per cent would look for discount codes online and 35 per cent say they would wait for a sale. Discounts tailored to the product being viewed are also likely to incentivise consumers and 27 per cent say schemes such as bonus points also spur them on.
Traditional marketing communications such as email prompts (22 per cent) do encourage consumers to buy saved items, but new online marketing techniques do not appear to be so important to shoppers yet. Only 6 per cent say online stylist recommendations are an incentive and even fewer say that chatbots would help them to make a purchase. What’s more, despite the hype around new experiential technologies, only 6 per cent of online shoppers feel that augmented and virtual reality would encourage them to buy.
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