With the retail landscape becoming increasingly competitive, businesses are constantly looking for new ways to stay ahead of the competition and steal market share. Internet shopping has evolved significantly since the first online transaction over 20 years ago and with the internet knowing no global boundaries, the possibilities and reach for retailers are endless.
Indeed research from the PPRO Group suggests that for nearly one in ten (8%) of UK retailers, between 31% and 51% of all transactions now come from international customers.
Whilst this might sound like UK retailers have got overseas sales all sewn up, many could in fact be shooting themselves in the foot when it comes to converting these potentially lucrative browsers into buyers by failing to keep up when it comes to payment options.
Despite international payment options beginning to resonate with UK retailers, rather than taking advantage of the borderless nature of internet transactions, many retailers are unwittingly putting up barriers to sale by not offering familiar payment options to their overseas customers.
This isn’t due to a lack of knowledge of what’s out there, but the perceived level of red tape and high charges when it comes to adopting familiar options which will appeal to those outside of the UK, such as iDEAL, SEPA Direct Debit or SOFORTbanking.
> See also: Getting ready for a mobile payment world
Up to 10% of international customers abandon their basket at the point of payment, according to almost half of those surveyed (43%), with the payment page cited as the reason in 42% of cases.
However, when it comes to online shopping priorities, retailers put more emphasis on security than the loss of revenue caused by shopping cart abandonment with 85% considering customer security to be a high priority, compared to abandonment of shopping carts which tops the list for just over half (54%). By failing to address the reasons behind this, retailers could be missing out on both domestic and international sales.
This issue is even more compounded when you consider the prevalence among shoppers to pay with their virtual wallets. With the use of cashless alternatives – including cards, standing orders and other electronic payments – predicted to grow to a staggering 27 billion by 2023 and cash payments falling to just 13 billion, those retailers who can offer more options and meet the needs of their home grown customers as well as those from overseas will be well placed to take advantage.
Innovate or die
Recent research from Accenture found that common barriers to adoption of innovation among payers and payees include high cost of implementation and membership, and lack of security, trust and customer protection.
Whilst many businesses remain understandably cautious when it comes to the adoption of new payment methods, it is vital for business growth, brand reputation and profit to embrace not only the familiar payment options, but also the coming changes in the payment industry that are set to change the way we as individuals shop forever.
> See also: Do UK companies have a 'Victorian' attitude to payment innovation?
But with levels of basket abandonment a real cause for concern, retailers need to take a leap of faith and embrace the opportunities presented by new payment methods – be it overseas methods or new innovations presented by Apple, Samsung or Google. If retailers refuse to adopt innovative methods through both on and offline means, and avoid the true issue of basket abandonment, potential revenue streams and wider customer reach could be detrimentally damaged, along with their reputation.
By offering alternative payments options, that meet the demands of both local and international customers, whilst providing a fluid check out process, a retailer can ensure customers are able to complete a transaction, once the brand has caught their attention, all of which is a vital part of becoming a recognised competitor in the current do or die retail space. It’s a must that retailers do their utmost to proactively embrace innovation in retail technology to stand apart from competitors and win customers.
Sourced from Tobias Schreyer, co-founder and CCO, The PPRO Group