Barclaycard Payments, a global payment business which processes nearly half of the UK’s credit and debit card transaction, has released new research that shows 69% of 18-24-year-old consumers ‘shop and drop’ when online, compared to 42% of over 65s.
According to the research, 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.
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).
Online shopping increase
The Barclaycard Payments research comes at a pivotal moment for e-commerce brands, with online transactions consistently growing, there was a 45.9% increase in May 2021 compared to May 2020, according to their stats. 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.
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.”
A shift to digital payments
COVID-19 increased the urgency for banks to transform their payment systems as digital payments soared. A report from Accenture forecasts nearly 420 billion transactions worth US$7 trillion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$48 trillion by 2030.
“The pandemic will permanently change how consumers shop and pay for products as they prioritise convenience above all else. While banks’ investments in new payments systems have focused primarily on meeting compliance deadlines, the way they will drive value moving forward is by embracing the changing consumer dynamic and improving the customer experience.” said Sulabh Agarwal, who leads Accenture’s Payments practice globally.
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