Retailers could be losing as much as £2.4 billion in revenue from users exiting an online checkout as a result of inefficient purchasing processes, according to a recent study by Mobile Money Network (MMN).
The findings were obtained from research into customer behaviour in online and mobile checkouts carried out by customer data platform, QuBit, which analysed 18,000 shopper journeys to identify where and why they drop out. The study found that of the £2.4 billion in lost revenue from dropouts, £470 million of it was due to the required registration process. The research concludes that the number one issue for buyers is the fact that they are required to go through lengthy account creations in each digital retail environment with multiple retailers before they can complete a purchase.
John Milliken, managing director of MMN, said the lack of a simple payment mechanism that transcends all channels – online, mobile as well as more traditional marketing channels – was a key issue. ‘We strongly believe that mobile is not a discrete channel and used properly, it is an enabler to improve sales conversion in all channels. Retailers need to reduce the amount of revenue lost due to making it too difficult for consumers to buy from them,’ Milliken said.
Results from the report indicated a major upgrade in the retail checkout experience was overdue, adding that there had been little innovation in the area over the last 16 years. ‘With the emergence of new technologies, the retail industry is in a state of flux with mobile technology in particular completely changing the game for consumers allowing them to transact wherever and whenever they choose,’ MMN said.
MMN’s vision is to drive improved sales conversion for retailers by putting an instant mobile checkout anywhere a retailer has a communication with a customer. ‘The goal is to make it as easy and as quick as possible for consumers to buy from retailers wherever they see a product,’ Milliken said. However, he adds that the majority of retailers don’t give consumers an opportunity to instantly buy, such as on social media or from an advert, and still require shoppers to go through lengthy, complicated registration and payment processes. ‘This is akin to standing in a shop queue and not being allowed to go to the cashier without giving up your email address and setting up a password,’ explained Milliken.
MMN said to ensure retailers halt the revenue haemorrhage, checkout innovation should focus on four pillars: a simplified checkout process with less steps from purchase intent to transaction completion; a centralised information with one single log-on regardless of the retailer you are buying from; a retailer collaboration with no need for competitive advantage in the checkout; and a cross channel approach with a uniform process across all retail and marketing channels.