The research into the opinions of multi-channel retailers found that 52% of retailers believe that friction in the online checkout is the biggest driver of basket abandonment. 40% cited a lack of payment methods and 39% suggested a lack of lending or credit options was stopping consumers completing the payment process.
For retailers, increasing the range of payment and financing options is the key route to ensuring more consumers make it through the checkout process, and lower the rate of basket abandonment affecting UK retailers. 98% of merchants agree that consumers want new and easier ways to pay online and 78% of merchants say they would like to introduce consumer finance at the point of sale. But perceived barriers to increasing payment options persist – 85% of retailers think that it is too complicated and expensive to offer consumer finance at the point of sale.
However, the UK is likely to see the emergence of new buy now pay later options in both online and mobile channels. Klarna’s consumer research found that 53% of online shoppers are looking for new and easier ways to pay online, while 56% of consumers said they would buy more online if there were more varied payment options available.
Respondents estimate that almost two thirds of retail sales (65%) will take place online by 2019. Sales made on mobile devices soared by 350% in two years, increasing from 1.8% in 2015 to 8.1% of total sales today amongst retailers surveyed. Retailers predict that by 2019, 12.8% of all retail sales (both in store and online) will be made on mobile and in preparation, 9 out of 10 retailers today are currently investing in mobile payment capabilities to stay competitive.
This explosion in mobile shopping is being driven by digital natives, such as Millennials and Generation Z (18-34 year olds), which now account for over half of all online retail purchases in the UK. This compares to 30% for generation X (35-50 year olds) and just 10% for baby boomers (50-70 year olds).
Merchants are waking up to the importance of catering for this new breed of consumer – 90% of merchants say that meeting the demands of millennials is driving investment in new payment technologies. Fashion in particular is emerging as a major battleground to win millennial loyalty, with 95% of retailers upping their investment in tech to meet their expectations.
UK analyst house Ovum was commissioned by Klarna to undertake a study with 100 UK merchants investigating the state of online commerce to better understand how the industry perceives its own challenges in 2017 and into 2018. Klarna’s Consumer research: Rethinking Returns was a survey of 2,000 consumers across the UK conducted by Censuswide in February 2017.
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