When Martin Burkitt received his first email from online retailer LightInTheBox in early November last year, he paid little attention to it attention.
Having looked at a clothing website earlier that day and left a few Christmas gifts in his cart, he was not surprised to hear a simple welcome message from the company.
He was surprised, however, by how quickly the emails became persistent.
“The next morning I received another email asking if I had difficulty paying,” Burkitt says. “And another one the next morning.”
In total, he said, LightInTheBox sent him 16 emails over three days, encouraging him to complete the order.
Still, although LightInTheBox “went crazy” by sending a series of voucher codes and reminders, it wasn't enough to convince him.
“They didn't offer anything to offset the £30 delivery fee for something that cost around £90,” says Burkitt. That's why he didn't place the order in the first place.
Burkitt is among many British shoppers who abandon their digital baskets mid-order, creating a headache for online retailers already facing pressure from a resurgent high street .
According to Retail Economics and GFS, so-called “cart abandonment” increased by 9% last year, equivalent to around £3 billion in lost sales.
In total, online retailers missed out on £34.4 billion in sales in 2023, with shoppers citing high shipping costs. limited delivery options and more returns. commission as the reason they canceled their order.
Retail Economics and GFS are only in their second year of collecting data, but earlier research shows the practice is growing sharply. A 2018 Barclaycard report found that online retailers lost just £18 billion in lost orders due to shoppers abandoning baskets.
The jump since then will be partly driven by increased online spending in in general, as well as inflation. , that is, naturally, there will be more goods left in the baskets.
But this does not explain the sharp increase. While official data shows that online sales have increased by around 79% since 2018, cart abandonment rates are rising more sharply and appear to have risen by 92%.
Richard Lim, chief executive of Retail Economics, says the current economic climate is partly to blame for more people deciding not to buy items they've put in their virtual baskets. The report found that the majority of recent cart abandonment rates are among middle- and high-income millennials.
In general, Lim says, you can expect younger shoppers to be the most digitally savvy and shop at several retail stores at the same time. It's true that Generation Z is the most likely to abandon shopping carts.
However, online retailers are also struggling to attract millennials to participate, he said. According to Retail Economics, people aged 25 to 34 are more than three times more likely to abandon shopping carts of clothes and shoes than people over 65. They are twice as likely to add furniture to their online carts but not purchase it. as people aged 55 to 64.
“Part of this will be due to the second wave of the cost of living crisis,” says Lim. These so-called ambitious millennials “probably bought their first home in the last 10 to 12 years, may have cars under contract, and are only used to ultra-low interest rates.”
With borrowing costs soaring, this group, which until now made up a significant portion of online retailers' customer base, now faces a particular crisis, Lim said.
That means there are more of them. more cautious in spending than in recent years and increasingly sensitive to higher costs at the checkout.
Shipping costs and administrative fees are gradually increasing. In 2021, as inflation pressures increased and delivery routes faced disruptions, retailers began to quietly increase costs at checkout.
Many began introducing higher minimum spends for free shipping. Others simply increased their spending dramatically. British retail giant Next, for example, charged £3.99 for home delivery to customers in May 2020, according to archived data, with the figure rising to £4.50 at the start of 2021. This service now charges £4.95.
At Argos, expedited same day delivery of small items will cost shoppers £5.95, up from £3.95 in 2021 and £4.95 at the end of 2022.
In addition to the fee increase for shipping, people are starting to realize that it is becoming more and more expensive to send goods back. A wave of fashion stores have introduced new restocking fees to prevent people from over-ordering and returning clothes.
Oh Polly this week became the latest online retailer to tighten its rules for “repeat refunds.” “, stating that returns will be charged up to £8.99. Other companies, including H&M and Zara, have also introduced restocking fees.
While this appears to help curb the number of repeat returners, there are signs it may have a knock-on effect on a wider range of shoppers.
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The number of active customers at online fast fashion retailers including Asos and Boohoo has fallen in popularity over the past year.
They claim that lost customers are those who continually return products. However, figures show that higher costs also mean that shoppers overall are more likely than ever to abandon an order rather than purchase it.
According to Retail Economics and GFS, 55% of people who abandoned carts mid-order, did so because they learned that retailers were charging returns for returns, up from 49% last year. Eighty percent said they did so because shipping costs were too high.
Gillian Ridley Whittle, former fashion director at Topshop, said some shoppers always filled baskets they didn't necessarily intend to buy.
While at the former darling of British fashion, she conducted focus groups with younger members of the team, who “spent the week planning their outfits for the weekend, browsing websites, putting possible options in baskets, and then deciding later which ones to buy or not.” But Ridley Whittle, who now runs eco-friendly lingerie brand Peachaus, says she can understand why people have actually started abandoning entire orders rather than downsizing their baskets.
Shoppers, she said, are used to shopping with “so much ease and speed” that it's no wonder they abandon orders if something annoys them when they get to the final checkout, including “hidden costs or prices that then change value of the product.” product.”
It's a balancing act that many retailers face as their own costs rise and they try to secure more profitable orders. The stakes are high for online retailers as more shoppers return to high street stores.
“Now more than ever, with a softer consumer environment and growing competition, these stores are struggling to afford let these potential stores let sales slip through their fingers,” says Lim.
However, for people like Burkitt, there is such a thing as too much persistence when it comes to getting buyers make a purchase. Offer one reminder and perhaps a working voucher code, and then Burkitt says he might consider placing an order.
But “if you email me five times a day, then that's no,” says Burkitt. . “It's just too much.”
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