Gabriel Le Roux, Co-Founder of Primer
In today’s fast-paced, technologically driven world, e-commerce has become an integral part of retailers’ revenue growth. Despite the ongoing wave of innovation, many businesses are still struggling to unlock their full potential. On top of this, the tough economic situation in the UK, characterised by soaring inflation and cost of living crisis adds an extra layer of complexity and challenge for online retailers.
In the midst of navigating the stormy waters of today’s e-commerce landscape, it has become crucial for businesses to future-proof their operations. Primer’s recent research report, “A Nightmare on E-Street”(https://primer.io/a-nightmare-on-e-street/), revealed that over a third (37%) of UK retailers experience shopping cart abandonment before customers complete their payments, with the average online shopping cart valued at £213.84. This alarming trend signifies the urgent need for the companies operating online to rethink their approach to e-commerce and look into easy ways to ‘plug their leaky carts’.
So, what are the primary challenges facing e-retailers today, what emerging trends are shaping the future of online retail, and most importantly, how can e-retailers traverse today’s tricky waters to grow in 2023 and beyond?
The achilles’ heel for online retailers
Nearly half (48%) of Brits admit that pricey delivery costs stop them from completing their purchases online. Speed and simplicity are equally important during the checkout process, with 76% of consumers saying that they would abandon their shopping carts if the process drags on, with 41% giving up after a mere four minutes, and 15% losing interest within just two minutes. What should online retailers do to avoid losing customers?
One way to do this is through exploring new delivery models, including adopting subscription services like Deliveroo, Amazon Prime or Uber Eats. Factoring delivery costs into the overall price to provide the illusion of “free” delivery could also be an effective approach. Ultimately, what consumers desire is a hassle-free checkout process and affordable delivery. It is, therefore, essential for retailers to channel their efforts, and investment, into these areas.
The changing tides of payments
Payment options is another major battleground for retailers, with a staggering 69% of Brits admitting that they would abandon their online shopping cart if their preferred payment method wasn’t available. So, what exactly do consumers want, and which payment method can they trust?
Our report revealed that modern payment methods have begun to outshine the more traditional plastic alternatives. PayPal has ascended the throne as the preferred payment method for online shopping in the UK, with 31% of consumers choosing it as their preferred option – leaving debit cards (26%) and credit cards (17%) trailing behind. Not only that, but PayPal also clinches the title of the most trusted payment method in the UK, with 50% of Brits placing their trust in them to handle their personal data. In comparison, around 47% have the same level of trust in debit/credit cards, and only 8% place their faith in Klarna.
Social commerce takes centre stage
Social commerce is another ‘hot trend’ this year, with the majority of Brits (54%) already buying or planning to buy products through social media. The younger generation, Gen Z, is leading the charge, with 42% already making purchases and another 37% gearing up to do the same. Millennials are not far behind, with 39% having made social media purchases and 32% planning to join in.
What’s really interesting is that even older generations are jumping on the social commerce bandwagon. Nearly one-third (29%) of baby boomers and half (50%) of Gen X have either made or plan to make purchases through social media. This shows that social commerce has tremendous potential for online retailers across all age groups.
In light of this, in the last year alone, approximately 32% of UK retailers have embraced social media as a sales tool. For those who have already integrated social commerce into their strategies, it’s making a big impact, contributing an average of 37% of their current revenue – and, undoubtedly, this percentage is expected to increase in the next few years.
In the ever-evolving e-commerce world, retailers must embrace emerging trends and proactively respond to customer expectations. By actively listening to their customers and staying in tune with their needs, online retailers can make strategic and impactful changes to their businesses. This agility and customer-centric approach will be key for adapting to evolving shopping trends and unlocking their full growth potential.
