Gen Z ditches £3bn more in online purchases each year than over-65s
Gen Z shoppers leave £6.5bn of items in online shopping baskets each year; £3bn more than the over-65s, new figures reveal.
Research from Barclaycard Payments, which processes nearly half of the nation’s credit and debit card transactions, shows that 69% of 18-24 year-old consumers ‘shop and drop’ when online, compared to 42% of over 65s.
The average monthly value of baskets abandoned by the younger group is also more than double; £156.40 vs £63.90, meaning retailers miss out on £6.5bn in potential sales each year, compared to £3.5bn from older shoppers. This is despite there being more than double the number of UK adults in the 65+ bracket.
In fact, the value of sales abandoned by Gen Z consumers is higher than any age group, despite the research showing 25-34 year-olds’ shop online more frequently (5.4 times during an average week, compared to 4.4 times for 18-24s).
Fashion is most likely to be left behind by Gen Z basket abandoners. When asked which items they had ‘shopped and dropped’ at the checkout in the previous month, 40% of 18-24 year-olds listed clothing. This was followed by technology products (25%) and food and drink (23%). Fashion items are also most commonly abandoned by the over-65 (18%).
This data clearly translates to lost sales too: when asked, retailers who sell fashion products reported experiencing a higher monthly average value of abandoned baskets than other categories at £92, compared to £68 for food and groceries; meaning retailers may need to consider stronger reengagement strategies to boost sales among all shoppers, and for clothing especially.
The drivers of dropouts
The reason shoppers leave items at the check-out differs between age-groups. Generation Z seem to enjoy virtual window shopping the most (33%), perhaps browsing various store websites in a similar way as they would on the high street, with 26% leaving items in baskets with plans to return at a later date. Yet lengthy authentication processes are also off-putting for three in 10 (29%) Gen Z shoppers, who will turn away if it takes too long to pay.
For those over 65, high delivery costs (39%), followed by intentions to return later (36%) and too many steps in the checkout process (19%) were given as the most frequent reasons for abandoning a basket of goods.
The Barclaycard Payments research comes at a pivotal moment for ecommerce brands, with online transactions consistently growing – recently seeing a 45.9% increase in May 2021 compared to May 2020****. Meanwhile, industry regulation such as Strong Customer Authentication (SCA) requires merchants to comply with new fraud protection protocols – which in turn could add time at the checkout.
To help businesses prepare for the changes required by SCA, Barclaycard Payments has created Transact, a suite of tools designed to improve payment acceptance rates while speeding up verification for shoppers when they come to pay, helping to reduce the all-important last minute dropout rate.
Marc Pettican, president of Barclaycard Payments, said: “It’s vital online retailers understand and cater to the preferences of all their customers, but it’s the unpredictable behaviour of younger shoppers most likely to have the biggest impact on the bottom line. Our research shows this group tend to be less patient, less loyal and more likely to drop out at the point-of-purchase than their older counterparts.
“More broadly, with online shopping continuing to grow and the deadline for full SCA compliance looming, retailers need to remove as much friction as possible from the checkout process. Products such as Barclaycard Transact can help to speed up customer verification and reduce the sales merchants miss out on through abandoned baskets.”
Seven steps to sales success
Barclaycard Payments has teamed up with retail expert, Clare Bailey, to offer retailers a seven-step guide to maximising online sales revenue:
- Review your delivery charges against the basket value and total customer value – customers will abandon their basket if they feel a delivery charge is not proportionate to the overall basket value, or, if they know a competitor can offer free delivery.
- Utilise remarketing techniques and incentives to buy now – customers respond favourably to discount codes and other special offers. While on the one hand you are giving away some margin, on the other you are closing the loop on cyber window-shopping, securing that customer and preventing them from going to the competition.
- Make it easy to transact – a lengthy process to complete an order is a complete turn-off for customers! Minimise data capture to maximise transaction completion – once you have secured the transaction you can always invite the customer to sign up to a loyalty scheme or similar in order to learn more about them.
- Weigh up the cost of developing and maintaining an app with the sales you are losing – for some, an app adds a new channel and is exactly the format their consumers love; for others, it is a costly choice that isn’t right for their customers.
- Improve the convenience of the payments process – don’t let the difference between you and your competitors be because they offer a more frictionless payment experience. Incorporating a “swipe to buy”, or a better online payment gateway, are ways to reduce basket abandonment.
- Know your customers – it sounds obvious but, as this research shows, so many businesses simply do not properly analyse their customer data to understand their behaviours and preferences. A wealth of insight is sitting right there in your website analytics – use it effectively to be more customer-centric.
- Be secure – with customers so much wiser to the need of protecting their personal data, retailers must ensure that they adopt all the latest standards and practices to protect customers. A single data breach could result in a huge loss of sales should customers feel they cannot trust you – so do not underestimate the importance of security.
