By Luke Griffiths, GM of Klarna UK
The UK is a global e-commerce leader. The robust infrastructure, widespread adoption of smartphones and the nation’s love of shopping are just some of the reasons behind Britain’s prime position in the e-commerce league tables, and why many European countries turn to the UK for best practice examples.
And online retail spending shows no sign of slowing down, with 2016 results showing that UK e-commerce sales grew by 16% in the last year, with consumers spending a total of £133 billion.
These numbers are partly attributed to a huge rise in smartphone shopping, with sales on mobile almost doubling (47%). And it’s not just browser shopping either. A new study by mobile app developer Apdami shows that UK consumers have been downloading more retail apps in the past year than ever before.
With 85% of smartphone users now using retail apps for their online shopping needs, it seems they are the newest frontier in online shopping. For consumers, well-executed apps provide greater simplicity, easy functionality, and more engaging content than a website browsing experience on mobile. Many apps also include a loyalty scheme, providing further incentive to shop through them rather than on a retailer’s website.
Apps can also offer greater personalisation on the customer’s journey to purchase. Clever apps allow for greater data collection and will recognise customer preferences, meaning they can serve a better experience for the customer.
The benefits are tangible to retailers too. By providing another opportunity to target customers, merchants can benefit from improved engagement and greater sales. As an added bonus, retailers with well-designed apps also get the kudos that come with appearing as an innovative, digitally-focused brand.
However, Apdami’s survey found that only 40% of consumers surveyed are satisfied with the current offering. Reasons for dissatisfaction included a lack of regular improvements and updates, and a lack of innovation beyond browsing and shopping.
This lack of innovation also affects the checkout process. Removing barriers to payments was a key consideration for consumers surveyed, many of whom wanted to see features such as biometric payment options integrated within retail apps.
Crucially, the report found that more than a quarter would think less of a retail brand if they failed to maintain and improve their app.
This needs to change. UK retailers may be at the forefront of the e-commerce trend, but consumer demand is constantly evolving. This means retailers’ offerings must evolve alongside, or they risk falling behind.
Today’s customer demands a seamless, swift and straightforward shopping experience, so merchants must make sure every stage of the online journey is built with the modern consumer in mind – gently nudging them down the path to purchase.
Essentially, building a customer-friendly app is all about providing the right functionality and messaging at every step, from the first step of browsing through to the buying.
When it comes to browsing, it goes without saying that apps must include functionality specific to mobile, such as swipe to like and short term surveys. We also urge retailers to include tailored offers and reward schemes to benefit loyal customers.
The Apdami survey also showed that 29% of those surveyed would like to see retailers implement augmented and virtual reality capabilities into their apps. When buying a sofa online, for example, a customer could easily see how the item would fit in their space, visually seeing it before committing to purchase. Not only would this improve the decision making process for the customer, but it could also decrease the likelihood of brands receiving returns from unwanted items.
The dropped basket case
Understandably, not all retailers will have the resources to implement VR capabilities. More practically, retailers can address another common consumer demand by removing barriers to payment.
At Klarna, we know how important this is. In fact, we recently undertook a consumer survey to find out more about the reasons behind one of the major problems plaguing online retailers – the “dropped basket dilemma”. We found that almost 7 in 10 (68%) of British shoppers have abandoned their shopping baskets online, with an average value of £120.90 per basket.
That’s costing each British online retailer an average of £37,000 per year in lost sales. Unsurprisingly, one of the main reasons why consumers drop out of the shopping process is due to a frustratingly clunky check out.
Our research showed that the more hoops a customer has to jump through, the less likely they are to get to the confirmation page: More than half (58%) of the consumers we surveyed said they would be more likely to shop with a merchant if their checkout was quick and easy.
This is particularly relevant for consumers shopping on mobile. One of the main reasons consumers shop on apps is for increased simplicity and a smoother shopping process. Today’s empowered and time-poor consumer – particularly those shopping on-the-go – no longer has the patience to go through lengthy sign up processes or multi-step checkouts. Simple factors such as consumers not having their details to hand are now a reason for 19% of the shoppers we surveyed to abandon a basket. Other reasons included the checkout process taking too long (13%) and retailers not offering a customer’s preferred payment option (12%).
It’s clear that avoiding drop out points is crucial, so retailers need to re-think lengthy sign ups and payments processes. Instead, online stores would do well to partner with a third-party payments provider who can introduce a digital wallet, set up simple one-click payments, or use data to remember customer preferences at checkout. For functionality specific to apps, retailers could also think to introduce contactless and biometric payments, and even voice recognition.
Simplify the buying experience
The increasing of shopping on apps is also an opportunity for brands to inform the customer’s journey across all channels, whether on smartphones or on desktop. A customer may start their journey on one device and then go on to complete the purchase on another. Using progressive data collection means brands can effectively target consumers across all devices, creating an omnichannel platform and informing the journey every step of the way, and making the experience as seamless as possible.
Online e-commerce is all about giving the consumer greater freedom and flexibility. With a constantly expanding range of shopping channels, retailers have more opportunities than ever before to win sales and customers. By providing a customer-friendly shopping experience on apps, retailers can get ahead and reap the benefits – through increased loyalty, greater customer experience, and most importantly, a healthier bottom line.
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