High inflation and a cost of living crisis are causing consumers to think longer and harder about managing their money. But as they become more money-conscious, online merchants are also experiencing a downturn in sales. In its latest report, automation platform Primer reveals some of the pain points affecting eCommerce the most and some of its emerging trends.

According to the Office for National Statistics (ONS), online sales in the UK have dropped by 2.3 per cent across most retail segments in the past year, revealing a very disappointing period for the eCommerce sector. The stat reveals the importance for online retailers to listen to customer demands and be able to make strategic, impactful and nimble changes to their business to best reflect customer demands and shopping trends. The latest Primer report takes a deeper dive into the space. Primer’s research report ‘A Nightmare On E-Street‘ reveals that 46 per cent of Brits named expensive delivery costs as their biggest pain point when shopping online. Forty-eight per cent also admitted that expensive delivery costs would be the leading cause for them abandoning their shopping cart ahead of payment. As a result, it comes as no surprise that ‘shipping and returns’ also came out as the number one pain point (33 per cent) for British retailers. Consumers abandon around 37 per cent of all shopping carts before completing payment. The average online shopping cart is valued at £213.84, meaning that not acting on consumer demands for affordable delivery and a fast checkout experience, could have a devastating impact on the company’s bottom lines.

Gabriel Le Roux, co-founder of Primer, offered his view on the report’s findings. He said: “Online retailers must look to future-proof their business whilst ensuring it can weather the volatile market conditions we’re currently experiencing. “Whilst they currently face the nightmare of having to do more with less, there are impactful and easy-to-adopt strategies that can pay big dividends. Our research provides a blueprint for eCommerce, allowing retailers to pinpoint consumers’ biggest pain points, and adopt the best business strategies in 2023 and beyond”.

Will shoppers trust AI recommendations or decisions?

The study reveals that expensive delivery costs are the biggest concern for 46% of British consumers, leading to cart abandonment and potential revenue loss for online retailers. The report also explores the concerns of UK retailers, including shipping and returns, attracting and retaining staff, and developing and maintaining eCommerce stores. While AI tools are being considered by retailers, consumer trust in AI recommendations and decisions remains a challenge. Social eCommerce is identified as a significant growth area, with a majority of UK retailers planning to sell directly through social media platforms. Additionally, PayPal is the preferred payment method for online shoppers in the UK, followed by debit and credit cards."

On the flip side, Primer also explores the pain points of the UK-based retailers themselves. ‘Shipping and returns’ (33 per cent), ‘attracting and retaining staff’ (33 per cent), and developing and maintaining their eCommerce store (32 per cent), made up the top three concerns. The rise of AI is causing a stir within the retail industry, with the majority (67 per cent) of UK retailers being open to implementing AI tools within their customer journey. In fact, 30 per cent of these are already taking a proactive approach in the belief that AI is the future of eCommerce. The remaining 37 per cent are ready to explore the uses of AI but are also cautiously considering its potential benefits and drawbacks. Primer also discussed the importance of understanding some of the unease regarding AI felt by some consumers. Taking this into account could mean balancing the introduction of AI with more traditional forms of automation, such as inventory management, order fulfilment, and payment automation.

The majority of consumers (64 per cent), are concerned with the use of AI within their shopping experience – whilst over a third (37 per cent) of British consumers are concerned about their privacy and dislike the personalised shopping experience, a further 27 per cent are concerned due to their lack of understanding of AI. “Automation is the way forward when it comes to decreasing technical debt. However, retailers need to be cautious when exploring the types of automation to implement, with shoppers more likely to distrust recommendations or decisions made by AI when shopping online (36 per cent), versus trusting them (26 per cent),” said Le Roux.

Social eCommerce will ‘play a significant role in driving sales’

Social eCommerce has emerged as one of 2023’s biggest growth areas within retail. Fifty-four per cent of Brits have either already purchased items through social media or plan to do so in the future. Gen Z leads the charge on social media shopping with 42 per cent having already purchased items through social media and a further 37 per cent planning to do so in the future. However, Millennials aren’t far behind, with 39 per cent having already bought an item through social media, and 32 per cent planning on doing so in the future. In response to this growing trend, 32 per cent of UK retailers have already added social media as a sales tool during the past year alone. Of the retailers already using social commerce to sell directly to consumers, this channel is bringing in an average of 37 per cent of their current revenue. Le Roux also discussed these findings: “Social eCommerce is experiencing serious growth. The majority of UK retailers believe that social media will play a significant role in driving sales, with 56 per cent of UK retailers stating that selling directly through social media will become an even bigger selling mechanism in the future. 2023 marks the year when online retailers should add social commerce to their sales channels to avoid being left behind”.

Modern payments

Modern payment methods are now overtaking more traditional plastic options. PayPal emerged as the preferred payment method of Brits that shop online, with 31 per cent of respondents picking the payment provider. Debit cards (26 per cent) and credit cards (17 per cent) saw out the top three. PayPal also pips credit and debit cards to the post; named Britain’s most trusted payment method with 50 per cent of Brits trusting them with their personal data. Meanwhile, 47 per cent trust debit/credit cards and only eight per cent of respondents trust Klarna.