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E-retail patience runs short with ID checks

E-retail patience runs short with ID checks
Thursday September 19 2013

Consumer research reveals five-minute limit before online retail abandonment and potential losses of up to £2.3 billion in abandoned retail sales

The results of a new consumer survey released today have revealed that customers are only prepared to spend five minutes on average undergoing identity verification checks before they abandon their online shopping baskets, despite the channel’s relative convenience. 

The research, published by information services provider Experian and conducted by Opinium Research among 2,003 UK adults, also estimated that this average rate of abandonment equates to around £2.3 billion worth of lost revenue.
 
The new study makes the point that lengthy identity and security procedures continue to be a source of annoyance for consumers and are often a cause of lost business for online retailers and other service providers. The Experian analysis found almost half (45%) of UK adults have backed out of an online transaction after becoming frustrated over the length and complexity of the identity validation and security checks. It identified that of those who have abandoned an internet-based purchase, nearly half (47%) took their custom to a competitor after becoming irritated with the process, one in five (20%) gave up completely, while one in six (17%) tried again at a later date.
 
Demographic analysis reveals nuance

Using Mosaic, Experian’s demographic profiling tool, the survey found that the 'Elderly Needs' group, characteristically pensioners in their 70s, 80s and even 90s who are no longer as physically active as they were, are the most patient, with only 32% having completely left a transaction in the last 12 months. In contrast, the 'Upper Floor Living group, typically young, single adults on limited incomes, was found to be the least patient with 43% saying they had abandoned one or two deals due to lengthy security checks, and 16% admitted to having done so ‘frequently’.
 
As more business is conducted online, one in two UK adults said they believed transactions are becoming increasingly time consuming (49%) and complicated (53%). The provider's 'Rural Solitude' group, typically those living in small, isolated villages with poor access to broadband, were most frustrated, with three quarters (72%) believing verification processes are becoming more complex, significantly higher than the national average.
 
Tolerance lags for online gambling

Nick Mothershaw, director of identity and fraud at Experian, commented: “Identity verification is becoming an increasingly important part of online retail operations, particularly as the process of dealing with consumers face-to-face is becoming less commonplace. However time-consuming they appear, identity checks are in all our interests, not only protecting businesses from fraud but also individuals.”

While tolerance levels for the retail sector were comparatively low when compared with other sectors, 'ID impatience' was greatest in the online gaming environment, where consumers will only endure a four-minute wait before opting out. While only a short window of time, this is an increase of one minute on 2011 figures, suggesting they are more forgiving than two years ago.
 
More tolerant across financial services and travel

Consumers were, however, far more understanding when it comes to purchasing a mortgage or insurance, with individuals happy to wait approximately 10 minutes and nine minutes respectively. This degree of tolerance was also similar for transactions across the travel industry, where respondents said they were happy to spend up to nine minutes while their identity was been verified.

Mothershaw concluded: “Customers are looking for a quick, easy procedure when processing their online shopping basket. The more straightforward the system, the better this is for both the customer, as well as retailers.”

Tagged as: Identification | identity | verification | security | online | basket | abandonment | demographic | survey | Experian | Opinium