Out of thousands of people surveyed for a 2018 Barclaycard study into customer habits, 41% admitted they’d abandoned a basket at the checkout stage in the past year shopping online. Shopping in stores, only 24% had walked away from a sale.
Overall, Barclaycard estimated, retailers were missing out on something like £18bn a year in revenues lost at the checkout, and that was two years ago.
Time and again when customers are asked why they’d given up at the last hurdle, one of the answers that most frequently comes back, one of the biggest ‘pain points’ about online shopping, is the need to register copious payment and verification details at the checkout.
This could be seen as a backlash against tedious form-filling, and that’s certainly a big factor. But there’s also something more profound going on – a question of identity.
Handing over personal and banking details to a retailer is something a lot of people still have mild or even serious hang-ups about. It might come naturally to Gen-Zers, who’ve never known any other way of doing things, and don’t see registration as any kind of bar to accessing an app, a service, or an online brand. But for most people there are still nagging doubts about privacy and security hanging over the process, and they are seriously holding shoppers back.
Think about that fact then when you consider what all ecommerce brands, and ultimately all retailers, are trying to achieve in the field of ambient shopping, defined by Gartner as an experience that “seamlessly flows across a shifting set of devices and interaction channels blending physical, virtual and electronic environment as the user moves from one place to another.”
It doesn’t add up. If retailers are going to achieve this utopian commercial vision, pain points over identification, security, and data-sharing must be resolved.
A challenge as complex as bringing about a paradigm shift in shopper habits is never going to have a simple solution. Certainly not when it involves asking people to hand over yet more data to retailers, governments and numerous unknown third parties, even though, as Linda Touch, global senior director at consumer credit agency Equifax says, there are signs that “consumers are loosening up the reins on their personal information for customized experiences”.
That may be the case, especially among younger users. But in order to reach the grand prize in ecommerce, the full ambient shopping experience, and the seamless interaction between shoppers and shopping platforms, there is still some way to go.
Not least because what is required to really achieve that and cut down, rather than add to, the amount of virtual paperwork needed to get verified and get shopping, goes far beyond retailing. What manifests as ambient, seamless shopping in retail, translates on a wider scale to another grand prize in 21st century consumer technology, whose progress is also of major interest to governments around the world: Digital ID.
It’s one of the most ambitious collective endeavours of the technology age, and if it’s done right, could revolutionise the way humans interact with practically every aspect of society. Instead of having multiple fragmented means of registering for services, products and experiences, individuals will carry around virtual identification documents that entail and amalgamate multiple layers of personal information, from their passport to their Uber profiles.
The potential for retailing is obvious. And while it might seem that brands will be asking for even more data from their customers, ultimately and perhaps paradoxically, this could end up reducing the pain points that surveys reveal can put them off at the checkout.
As Linda Touch puts it, “Federated digital identity — linking a consumer’s digital identity and the attributes, which are stored across multiple, unrelated identity management systems — will become the new normal. It achieves the seemingly impossible: balancing consumer convenience with security.”
As someone with a global view on ecommerce, it’s clear to see the benefits of creating the sort of holistic ecosystems that ring true with the notes of the future. I can see equally clearly which brands are storming ahead when it comes to digital ID, and those who aren’t.
The retailers who can get this right, and, crucially, take their customers along with them, will win the race. And they won’t be able to do things by half measures. As Greg Simpson, CTO at global consumer financial services consultancy Synchrony says:
“It isn’t just the design of the web page, or how your mobile app works. It’s how the user, or customer, can have a seamless experience from the mobile app to the physical store, from the IoT beacon offer to the followup customer satisfaction call, from virtual reality to augmented reality and even physical reality. It needs to transcend all.”
If retail brands need any convincing, they just need to go back to the numerous statistics from Barclaycard and others, about the pain points that lead to such high rates of customers abandoning purchases at the checkout.
Reducing the sort of friction that causes this will feed directly into their bottom lines. But more than that, it will stimulate many of the various behaviours that retailers are hoping to see, from brand affiliation to the sort seamless pan-channel, pan-platform, and blended physical and digital experience that they want to provide, and that their customers want more and more as time goes on.
This is how digital ID manifests in retailing – which is itself just one aspect of a much larger societal shift. But it is an important one, because it will be a crucial vehicle for wider change. When people see the value of digital ID in shopping and, more importantly, trust that it is a safe and efficient system, it will become easier to introduce them to its broader applications – voting in elections, booking appointments at the doctors, and much more.
Our place at the innovative cutting edge of this change affords us a unique perspective on the future. A fascinating journey rich with opportunity lies ahead.