UK consumers willing to spend more with trusted retailers
Forter’s recent report reveals alarming rates of false declines, cart abandonment, and trust issues heading into the holiday shopping season.
Forter’s 2023 Consumer Trust Premium Report explores the relationship between consumer shopping habits and brand trust. It surveyed 5,000 respondents from the US, UK, Germany, Singapore, and China.
With an ongoing cost of living crisis, risk of recession and many UK consumers cutting back on their non-essential spending, trust is a crucial driver for continuing retail growth. Forter’s report found that UK consumers are willing to spend 44% more on average with retailers they trust, coining it the “Trust Premium.”
As economic conditions grow less favourable, investing in building customer trust and long-term loyalty is vital to help insulate retailers against market turbulence.
Michael Reitblat, Chief Executive Officer and Co-Founder, Forter, says: “The Trust Premium represents potentially millions of pounds in revenue uplift for retailers.”
“UK retailers that lean into and invest in customer experience, from account creation to authentication to checkout, are best positioned to turn a profit over the Black Friday and Cyber Monday weekend.”
Unfortunately, the report showed that over 73% of UK consumers have had a negative online shopping experience in the past three months, with high rates of false declines (14%), purchases not arriving on time (37%), and expensive and difficult returns policies (27%).
A seamless checkout experience is one of the most essential pieces of building trust with UK shoppers. The report found that more than three-quarters (77%) of UK consumers would abandon a purchase if the checkout experience were too complicated or time-consuming.
While retailers often rely on one-time passwords, CAPTCHAs and manual order reviews to enhance security, when used indiscriminately, they deter good customers and leave money on the table.
Forter’s first-party data found that mandating account creation can cause, on average, 3-5% of consumers to drop off, while requiring consumers to validate their email addresses/phone numbers can cause a 4-7% drop-off rate, on average. By creating unnecessary friction, retailers are turning customers and their money away.
Despite their growing buying power, younger shoppers in the UK face the most friction with online shopping. Millennials are twice as likely than Gen X to be falsely declined, while Gen Z consumers are up to six times more likely to be falsely denied at checkout than Baby Boomers (10%). Ensuring legitimate customers have a friction-free experience is critical to win the next generation of shoppers.
With many new shoppers venturing into digital commerce, Forter has found that retailers often turn away new but trustworthy customers simply because they’ve never encountered them.
Forter’s first-party data revealed that false declines are typically five to ten times higher than fraud rates. Forter estimates based on its first-party data that for every USD $1 retailers lose to fraud, they forfeit USD $30 by declining legitimate consumers.
Reitblat says: “Our report reveals the brands that win the next generation of shoppers will provide fast, frictionless and fraud-free shopping experiences, and establish a mutual trust with their consumers.”
“Many retailers can’t accurately assess the trustworthiness, and identity, of customers visiting their sites and in turn their fear of fraud leads to unnecessary friction, cart abandonment, false declines, and lost revenue.”
“But this situation doesn't have to continue unchecked. Balancing the importance of fraud prevention without impacting customer experience will be the next major test for retailers during the upcoming holiday shopping season,” says Reitblat.