More than half of US smartphone owners (56%) have abandoned a mobile transaction because of usability issues, security fears and the fact that its often too slow, finds a study by Jumio.
According to Statista Inc., mobile commerce revenues reached about $57 billion in 2014. In addition to the majority of the survey recipients abandoning transactions, the study also found that nearly a quarter of consumers abandon their attempts at opening an online gaming (27%) or financial services (23%) account and over one-third (34%) of those who abandon a transaction do not attempt again.
With this in mind, these abandoned mobile purchases could be costing US retailers as much as $24billion a year in lost revenue.
“As mobile transactions continue to skyrocket, so do abandoned purchases, incomplete account openings, and lost revenue,” said Marc Barach, Chief Marketing Officer, Jumio. “Businesses have heeded the warning and are finally prioritizing mobile checkout experiences, underscored by the ten percent improvement in abandonment rates over the last two years,” said Barach. “But, experiences are still far from being as seamless as they need to be in order for retailers and financial services providers to stem the tide of lost opportunity and put nearly $25 billion back in their pockets.”
Apparel, the largest mobile commerce sector, is also the most frequently abandoned, with three in five (60%) of those reported abandoning purchases doing so with apparel items (clothing, shoes, accessories). These rates vary by gender and age, with women (68%) more likely to abandon a clothing or apparel transaction than men (51%), especially female millennials (78%).
Surprisingly, consumers abandon both purchases big and small at similar rates. Smaller purchases such as ordering food or purchasing movie tickets are neck and neck with big ticket purchases such as booking travel.
Abandonment rates by industry:
- Retail/Apparel – 60%
- Food (groceries or takeout) – 41%
- Travel – 41%
- Household items – 39%
- Event tickets (concert, sporting event) – 39%
- Entertainment purchases (39%)
- Electronics – 35%
- Online gaming (opening an account) – 27%
- Applying for financial services account (opening an account, money transfer) – 23%
“While consumers were less likely to say they’d abandoned a transaction that involved opening an account, as compared to making a purchase, this may be in part because these transactions typically require some degree of forethought and commitment, particularly in financial services,” continued Barach. “These businesses still need to keep factors such as ease of use and security top of mind to maximize the number of users who complete their transaction moving forward,”
After purchase uncertainty (45% respondent attribution), issues with speed (36%) and ease of navigation (31%) are top reasons cited by those who have abandoned a mobile transaction. In fact, users are more likely to abandon a purchase due to user experience issues than due to the security of payment (27%) or personal information (26%).
Retailers who prioritize mobile checkout stand to reap some big returns. Nearly one-quarter (23%) of those who have reported abandoning a mobile transaction say their cart was valued at $100 or more the last time they abandoned a transaction at the checkout.
Two thirds (66%) of those who have abandoned a mobile transaction went back and attempted that transaction again later, with the computer being the preferred method the second time around.
Younger people are more likely to try completing the transaction later, with 77 percent of those 18-34 attempting a transaction at a later time, compared to older age groups 35-44 (58%), 45-54 (63%), 55-64 (53%), and 65+ (49%).