55% of UK smartphone owners have abandoned a mobile transaction because of poor payments experience and usability issues, finds a study by Jumio – and its is costing retailers as much as £6 billion a year.
According to the Office of National Statistics mobile commerce revenues reached £15 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 (24%) or financial services (25%) account and around one-third (32%) of those who abandon a transaction do not attempt again.
Usability issues (68%) far outweigh purchase uncertainty (21%) when it comes to shoppers abandoning a mobile transaction. Frustrations over slow load times (32%) and complex payment processes (27%) are more important than concerns over payment security (16%) when shoppers decide to give up a transaction.
“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 prioritising 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 to stem the tide of lost opportunity and put a potential £6 billion back in their pockets.”
Fashion is the most frequently abandoned with 53% of respondents abandoning purchases. These rates vary by gender and age, with women (62%) more likely to abandon a clothing or apparel transaction than men (44%).
Surprisingly, the second worst industry for abandonment is food and drink. Despite the popularity of online grocery shopping and ordering take-away food on mobile apps in the UK, 39% of all attempted mobile food and drink purchases are abandoned.
Even more surprisingly, two thirds (68%) 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 – with men (73%) being far more likely than women (63%) to attempt a transaction again.
Barach continues: “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. 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.”
And here is the study in numbers:
Abandonment rates by industry:
- Fashion – 53%
- Food (groceries or takeaway) – 39%
- Travel – 38%
- Entertainment – 35%
- Household goods – 35%
- Events tickets (concerts or sporting events) – 30%
- Electronics – 30%
- Financial Services application (opening an account, transferring money) – 25%
- Online Gaming (opening an account) – 24%
- One-third (32%) reported apps/mobile sites being slow to load
- Payment process was too complicated (27%)
- App/site was difficult to navigate (26%)
- Difficult to type information in on small screen (21%)
See what it means for US retailers here