More than one in four online transactions are being abandoned at checkout, amounting to £34.4bn worth of lost opportunity in the past 12 months, according to new research from GFS and Retail Economics.
It has found that basket abandonment is increasingly prevalent among younger, middle-aged, and more affluent consumers. These key demographic groups are showing less tolerance for inflexible delivery options, with their heightened expectations directly effecting their decisions at checkout.
According to the report, the rise in basket abandonment to £34.4bn from £31.5bn the previous year calls for an urgent revaluation of how retailers manage delivery offerings. Almost two-thirds (62.5%) of 25 to 44-year-olds are demanding delivery choices at checkout to meet their expectations, compelling retailers to refine their delivery strategies to resonate with crucial spenders in a fiercely competitive market with fragile loyalty.
Basket abandonment due to delivery-related factors is prevalent across non-food retail categories, with the digitally savvy under-45-year-olds, contributing significantly to the increase in abandonment rate. For instance, the under-25s are four times more likely to abandon clothing and footwear purchases than the over-65s, the research found.
The surge in abandonment can be attributed to amplified caution compared to a year ago. Declining sentiment regarding household finances has disproportionately affected upper- and middle-income groups, who are grappling with increased borrowing costs. Among those earning between £50,000 and £70,000, more than half attribute the rise in abandonment to caution, contrasting with just over a third (37%) in other income brackets
Heightened consumer expectations and financial pressures are prompting more thoughtful purchase decisions, increasing the risk of basket abandonment. Consequently, consumers are scrutinising service value and options to align with their needs. Almost two-thirds (64.5%) of consumers expect more from retailers’ delivery services than ever before, contributing to 71% of shoppers stopping an online order because of inconvenient delivery times, and 65% because of limited choice of delivery services.
The value consumers place on personalised experiences presents a lucrative opportunity for retailers to capitalise on through premium services. Nearly half are willing to pay extra for premium options like same-day or next-day delivery. Middle and high-income under 45s, in particular, are highly inclined to invest in convenient delivery and returns, with over 60% prepared to spend for enhanced shipping services, such as nominated time or express delivery that match their lifestyle and shifting priorities.
