Explore how high inflation and the cost of living crisis affect customers’ finances and online businesses’ sales, while Primer’s latest research reveals eCommerce trends and worries.
Consumers are having to think more and harder about how to manage their money as a result of high inflation and the cost of living crisis. Online retailers are also seeing a decline in sales as customers become more cost-conscious. Automation platform Primer shares some of the trends and pain concerns that are most influencing eCommerce in its most recent research.
The Office for National Statistics (ONS) states that online sales in the UK have decreased by 2.3% in the past year across most retail segments, indicating a very unfavorable era for eCommerce. The data shows how important it is for online firms to listen to customers and adapt fast to changing buying habits. The latest Primer study digs further.
“A Nightmare On E-Street,” Primer’s research report, found that 46% of Brits dislike online shopping because of excessive shipping costs. High delivery costs were the top reason 48% would abandon their shopping cart before buying. Thus, “shipping and returns” was the #1 pain area for British merchants (33%).
Roughly 37% of all shopping carts are abandoned by customers before the transaction is complete. The average online shopping cart is worth £213.84, so failing to meet customer requests for low-cost shipping and a quick checkout might have a disastrous effect on the business’s bottom lines.
Primer co-founder Gabriel Le Roux gave his opinion on the report’s results. “Online retailers must look to future-proof their business while making sure it can withstand the unstable market conditions we’re currently experiencing,” he said.
“While they now face the horror of trying to achieve more with fewer resources, there are effective and easy solutions that can have a huge beneficial impact. Our eCommerce roadmap helps organizations identify customer pain points and develop the best business plans in 2023 and beyond.
Will consumers trust AI decisions or recommendations?
On the other hand, Primer also examines the problems that the UK-based retailers face. The top three issues were creating and sustaining their eCommerce site (32%), attracting and retaining workers (33%), and shipping and returns (33%).
The rise of AI is creating a stir in the retail sector, with 67% of UK merchants saying they are open to integrating AI tools into their customer journey. In fact, 30% of them already take preemptive measures because they think AI will revolutionize eCommerce. The remaining 37% are eager to investigate AI’s applications but are cautiously weighing the advantages and disadvantages of doing so.
The significance of comprehending some of the apprehension that consumers may have about AI was also covered in Primer. This may require balancing the use of AI with more conventional automation techniques, such order fulfillment, inventory management, and payment automation.
British consumers worry about their privacy and dislike the individualized shopping experience, with over a third (37%) expressing concern. An additional 27% express worry due to their lack of understanding of AI. The use of AI in their shopping experience is a concern for the majority of consumers (64%).
“The future lies in automation when it comes to reducing technical debt. Shoppers are more likely to doubt recommendations or decisions made by AI when they shop online (36%) than to trust them (26%), therefore merchants need to exercise caution when examining the types of automation to deploy, according to Le Roux.
Social eCommerce “will significantly contribute to generating sales”
One of the retail sectors expected to experience the fastest growth in 2023 is social eCommerce. 54 percent of Brits have recently made a purchase using social media or have plans to do so in the near future.
With 42% already having done so and another 37% intending to do so in the future, Gen Z is leading the charge when it comes to social media purchasing. However, Millennials aren’t far behind, with 32% wanting to buy an item in the future and 39% having already made a purchase using social media.
32% of UK retailers have already embraced social media as a sales technique in the last year alone in response to this expanding trend. An average of 37% of the shops who already sell directly to customers through social commerce already derive their income from this source.
Le Roux also mentioned the following findings: “Social eCommerce is rapidly expanding. 56% of UK retailers say that selling directly through social media will grow to be an even greater selling mechanism in the future. The majority of UK retailers feel that social media will significantly contribute to boosting sales. Online merchants should integrate social commerce into their channels by 2023 to avoid falling behind.
Modern payment techniques are now supplanting older card payment systems. 31% of respondents chose PayPal as their favorite payment option when they made an online purchase in the UK. Credit cards (17%) and debit cards (26%) rounded out the top three.
With 50% of Brits trusting PayPal with their personal data, PayPal now edges out credit and debit cards as the most trusted payment method in the country. Only 8% of respondents believe in Klarna, compared to 47% who trust debit/credit cards.