Checkout Friction Still Costs Small Shops 23% of Potential Sales

Checkout friction still costs small shops 23% of potential sales

A study released today by a leading e-commerce research firm found that checkout friction remains a major issue for small retailers, resulting in around 23% of potential sales being lost due to difficulties in completing online transactions. The global study, which analyzed data from over 1 million shopping carts across six regions, revealed that the average shopper abandons their cart at least once every four visits.

The problem is not limited to a specific region or industry, with small shops in both Europe and Asia struggling to keep pace with larger e-commerce players. "In Europe, we've seen that many small retailers are still using legacy checkout systems that aren't mobile-friendly," said Maria Okonkwo, hospitality analyst at Mercer. In Asia, meanwhile, cultural factors can contribute to friction: in some countries, consumers may be hesitant to provide personal data during the checkout process.

Payment Processing Pain Points

The study identified several common pain points associated with checkout friction, including lengthy payment processing times and complex checkout forms that require multiple steps. According to David Lindqvist, partner at a Stockholm legal consultancy, "many small shops are unaware of the impact of these issues on their bottom line." The research found that for every dollar lost due to checkout friction, small retailers lose an additional $0.50 in potential sales through increased customer acquisition costs.

The study's findings have implications for both small and large retailers. While larger e-commerce players may be able to absorb some of the costs associated with checkout friction, smaller shops often don't have the same level of resources or expertise to invest in improving their checkout processes. As online shopping continues to grow globally, it remains to be seen whether small retailers will be able to adapt and compete effectively.

As the e-commerce landscape continues to evolve, one area to watch is the rise of new payment technologies, such as biometric authentication and cryptocurrencies. With these innovations on the horizon, small shops may have opportunities to improve their checkout processes and reduce friction in a way that benefits both customers and businesses.