With the retail landscape becoming increasingly competitive, businesses are constantly looking for new ways to stay ahead of the competition and steal market share. Internet shopping has evolved significantly since the first online transaction over 20 years ago and with the internet knowing no global boundaries, the possibilities and reach for retailers are endless. Indeed our own research suggests that for nearly one in ten (8 per cent) UK retailers, between 31 and 51 per cent of all transactions now come from international customers.
Whilst this might sound like UK retailers have got overseas sales all sewn up, many could in fact be shooting themselves in the foot when it comes to converting these potentially lucrative browsers into buyers by failing to keep up when it comes to payment options.
Rather than taking advantage of the borderless nature of internet transactions, many retailers are unwittingly putting up barriers to sale by not offering familiar payment options to their overseas customers. This isn’t due to a lack of knowledge of what’s out there, but the perceived level of red tape and high charges when it comes to adopting familiar options which will appeal to those outside of the UK, such as iDEAL, SEPA Direct Debit or SOFORTbanking.
With many retailers instead focussing their efforts on ensuring transactions are secure and not susceptible to fraud, potential buyers could be abandoning a transaction before they even start to make the payment, simply due to the options – or lack of – available to them. Basket abandonment as a result of the payment page is the main turn off for almost half (42 per cent) of international shoppers. By failing to address the reasons behind this, retailers could be missing out of both domestic and international sales.
This issue is even more compounded when you consider the prevalence among shoppers to pay with their virtual wallets. With the use of cashless alternatives – including cards, standing orders and other electronic payments – predicted to grow to a staggering 27 billon by 2023 and cash payments falling to just 13 billion, those retailers who can offer more options and meet the needs of their home grown customers as well as those from overseas will be well placed to take advantage.
Innovate Or Die
Whilst many retailers remain understandably cautious when it comes to the adoption of new payment methods, it is important for business growth and brand reputation to embrace not only the familiar but the innovative options, to remain competitive. Indeed, recent research from Accenture found that common barriers to adoption of innovation among payers and payees include high cost of implementation and membership, and lack of security, trust and customer protection.
But with levels of basket abandonment a real cause for concern, retailers need to take a leap of faith and embrace the opportunities presented by new payment methods – be it overseas methods or new innovations presented by Apple, Samsung or Google.
If retailers refuse to adopt innovative methods and avoid the true issue of basket abandonment, potential revenue streams and wider customer reach could be detrimentally damaged, along with their reputation. By offering alternative payments options, that meet the demands of both local and international customers, whilst providing a fluid check out process, a retailer can ensure customers are able to complete a transaction, once the brand has caught their attention, all of which is a vital part of becoming a recognised competitor in the current do or die retail space.