The high cost of lost retail opportunity

They are also some of the easiest issues to address with a few simple tools. So, let’s take a look at where opportunity is currently lost in retail and the tools which can assist…

Eight areas of opportunity

In 2019, global payments provider Adyen took a deep dive into customer’s most common complaints about the retail sector.

In total, they identified eight key areas contributing to lost revenue, with long lines and out of stocks among the top reasons consumers might abandon a purchase and seek satisfaction elsewhere.

Here are the key areas they determined could improve the retail bottom line to the tune of $71 billion.

1. Out of stocks – $14 billion lost

Out of stocks “weigh heavily on purchase abandonment and loyalty” in retail, the report found.

The Adyen research indicates 83 per cent of consumers have chosen to leave a store and not make a purchase due to the item they seek being unavailable.

2. Long queues – $13 billion lost

Two out of three consumers abandon a purchase due to long lines, the report found, with Gen Y the most likely to walk away from a purchase if they wait too long in a queue.

“Grocery, general retail and fast fashion rank as the top verticals where shorter queues would increase shopper loyalty,” the report states.

3. Online checkout friction – $9 billion lost

The easier the online checkout is to negotiate the more likely consumers are to buy, with lack of mobile automation and complex payment forms among the experiences that are most likely to put consumers off.

“Nearly two-thirds (63 per cent) of shoppers report having abandoned an online shopping cart at least once in the past six months due to difficulties in completing a purchase.”

4. Lack of contextual commerce experience – $8 billion lost

Buying in the moment matters, according to the report.

Fifty per cent of shoppers say they have encountered an advertised product or service that they were interested in via channels like social media, but then did not make the purchase because too many steps were required to find where that product/service was sold.

5. False positives – $7 billion lost

False positives are when a shopper’s credit or debit card is falsely declined due to suspicion of fraudulent activity, and the report notes it’s costing retailers $7 billion in lost opportunity.

“In the past six months, 49 per cent of consumers have abandoned a purchase after their credit/debit card(s) were falsely declined due to suspicion of fraud during a legitimate transaction.”

6. Lack of cross-channel buying – $7 billion

Whether it’s buy online and pick up in-store or home delivery, consumers are increasingly seeking flexibility in the way they purchase, and failing to offer it also costs retailers $7 billion in lost earnings.

The report notes two in five shoppers abandoned a purchase in the six months prior to a lack of cross-channel buying options, while nearly half (45 per cent) of consumers noted convenient cross-channel shopping experiences would encourage them to shop with one retailer over another.

7. Lack of payment options online – $7 billion

With increased consumer expectation comes the demand for the customer to buy using the payment method they prefer, and that happens both in-store and online.

Over half of all customers (51 per cent) abandoned an online shopping cart because they could not pay in the way they preferred.

8. Lack of payment options in-store – $6 billion

Just as customers want a variety of payment options online, they also seek them in store.

Whether it’s cash, contactless payments, credit or digital wallet, the report found 44 per cent of shoppers have been unable to use their preferred payment method with a retailer in-store, prompting them to abandon their purchase entirely.

More opportunity to be had

The report goes on to note in addition to revenue that is directly being lost, retailers can improve their offering and encourage greater spending through additional positive experiences.

They note positive initiatives include:

• Cross channel buying ($8 billion opportunity)
• Cross selling ($5 billion opportunity)
• Personalised offers ($8 billion opportunity)

Coupled with addressing the $71 billion in revenue lost to negative experiences, these positive initiatives could see retailers add a potential $21 billion to the coffers, and together they could boost the industry by $92 billion a year.

You can view our range of mPOS options here, along with our on-shelf availability sensor, and display merchandising solutions.