A new report by SaaS company Forter has surveyed 5,000 respondents to explore the relationship between consumer online shopping habits and brand trust.
The responses highlight alarming rates of false declines, cart abandonment and trust issues heading into the peak holiday shopping season.
More than 73% of UK consumers have had a negative online shopping experience in the past three months, with high rates of false declines (14%), purchases not arriving on time (37%) and expensive and/or difficult returns policies (27%).
Retailers cannot afford to ignore these issues given the projected growth of the UK online shopping market, which was worth £83.6bn in 2022 and is expected to grow at a CAGR of more than 4% by 2027.
The trust premium in online shopping
With an ongoing cost of living crisis, risk of recession and many UK consumers cutting back on their non-essential spending, trust is a key driver for continuing retail growth.
UK consumers are reportedly willing to spend 44% more on average with retailers they trust – coined the “Trust Premium.”
As economic conditions grow less favourable, investing in building customer trust and long-term loyalty is vital to help insulate retailers against market turbulence.
Forter CEO and co-founder Michael Reitblat commented: “The Trust Premium represents potentially millions of pounds in revenue uplift for retailers. UK retailers that lean into and invest in customer experience – from account creation to authentication to checkout – are best positioned to turn a profit over the Black Friday and Cyber Monday weekend.”
Abandoned online shopping
A seamless checkout experience is one of the most essential pieces of building trust with UK shoppers. The report found that more than three-quarters (77%) of UK consumers would abandon a purchase if the checkout experience was too complicated or time-consuming.
While retailers often rely on one-time passwords, CAPTCHAs and manual order reviews to enhance security, when used indiscriminately, they deter good customers and their money.
Forter’s first-party data found that mandating account creation can cause, on average, 3-5% of consumers to drop off while requiring consumers to validate their email addresses/phone numbers can cause a 4-7% drop-off rate, on average.
False declines cause a loss of trust and revenue
Despite their growing buying power, younger shoppers in the UK face the most friction with online shopping. Millennials are twice as likely than Gen X to be falsely declined whilst Gen Z consumers are up to six times more likely to be falsely declined at checkout compared to Baby Boomers (10%).
Forter has found that retailers often turn away new — but trustworthy — customers simply because they’ve never encountered them before. First-party data revealed that false declines are typically five to ten times higher than actual fraud rates.
Reitblat concludes: “Balancing the importance of fraud prevention without impacting customer experience will be the next major test for retailers during the upcoming holiday shopping season.”
