Negative shopping experiences are costing the Australian retail sector $71bn in abandoned sales each year, according to new data from 451 Research commissioned by Adyen, the payments platform of choice for many of the world’s leading companies.
The custom research surveyed more than 1,200 APAC consumers and 600 B2C retailers to uncover what shoppers really feel about their shopping experiences and the impact it has on behaviour.
“Poor experiences from browsing to point of purchase are resulting in high levels of abandonment,” says Michel van Aalten, Adyen Country Manager ANZ. “For retailers this is more than a missed sale, it can be money reclaimed by a competitor or a purchase taken overseas to an international retailer.”
The findings point to factors like long lines, payment issues and stock shortages as major culprits to abandoned sales. These grievances mean retailers lose a significant amount of potential revenue and are all factors that can be solved with technology innovations that unify the in-store and online shopping experience.
The in-store bore
The research points to a $71 billion missed opportunity that can be avoided simply by improving the in-store shopping experience. Australia was revealed to have the largest percentage of consumers who prefer bricks and mortar shopping (50%), eclipsing the US (37%) and UK (36%) by a significant margin.
Twenty-one per cent of shoppers surveyed said the ability to negotiate price and discounts is a key driver to shopping in-store.
“All of these results highlight a costly reality: that modern shoppers demand immediacy and convenience, and don’t want to hear the word no. They aren’t shy about negotiating or ditching a purchase altogether if they’re not happy with the experience. Despite technology being available that can enhance the customer retail experience, many brands are still slow to act on that digital opportunity,” says van Aalten.
“Today’s digitally-empowered shopper expects to be able to purchase what they want, when they want, and how they want – whether in-store or online. What we see is retailers struggling to capitalise on all this opportunity.”
A common source of in-store dissatisfaction continues to be long lines, a trend that was first highlighted by Adyen in 2018. 61% of shoppers said they abandoned an in-store purchase due to excessive queues, resulting in $13bn in abandoned sales annually.
Unsurprisingly, long lines jumped to a 68% abandonment rate with Gen Y, who have grown up with the convenience of technology at their fingertips.
“The most important differentiators for retailers are the speed, ease and personalisation they can provide shoppers at the point of purchase and this demand is only increasing in the younger generations of shoppers,” says van Aalten.
Click and mortar
Lengthy forms that require manual data entry at the payment stage are the biggest contributor to checkout friction online, with more than 40% of shoppers admitting to abandoning a purchase at this stage for this reason.
Additionally, more than half of all Aussies (51%) gave up on at least one online purchase in the past six months due to the unavailability of their preferred payment method, resulting in an estimated $7bn in annual abandoned sales.
“Whether in-store or online, today’s connected customers are asking more from retailers than ever before. The research revealed that creating positive shopping experiences could amount to a $21bn annual sales lift. When you factor this in, simply capitalising on this opportunity by building winning experiences and creating positive shopping experiences, what is currently a $71bn problem could easily become a $92bn opportunity for all retailers,” says van Aalten.
You can find the full Adyen 2019 Retail Research report here.
Adyen (AMS: ADYEN) is the payments platform of choice for many of the world’s leading companies, providing a modern end-to-end infrastructure connecting directly to Visa, Mastercard, and consumers’ globally preferred payment methods. Adyen delivers frictionless payments across online, mobile, and in-store channels. With offices across the world, Adyen serves customers including Facebook, Uber, Spotify, Singapore Airlines, the Cotton On Group, Showpo, Rodd & Gunn, Lorna Jane, Freelancer.com and Kogan.com.