The European Union has proposed a new set of regulations in the hope of boosting security for online shoppers. While there are potential benefits of these regulations to online security, the negative impact will surely be felt by retailers. This is according to Omnico CEO Mel Taylor.
The proposal would require online shoppers spending over £8.50 to enter a password, code or use a card reader peripheral before proceeding through the checkout phase, effectively adding an extra and unnecessary step to online shopping, which Visa is calling ‘catastrophic.’
According to research from Omnico, 74 per cent of consumers consider speed and convenience a top priority when shopping. Retailers can provide this by ensuring a seamless customer journey. For high street retailers, a common barrier to achieving this is the presence of excessive queues; the EU’s proposed regulation would essentially be introducing queues to the world of online shopping.
The most visible result of this disruption will be the increased amount of abandoned baskets with impact most strongly in the UK, where 63 per cent of consumers regularly shop online, compared to the 51 per cent average across Europe. Over half of UK respondents to a recent survey said they would abandon their purchases if an extra step were added to the checkout process.
Omnico’s Retail Gap Barometer research also shows that consumers will be making heavy use of their smartphones this Black Friday and Cyber Monday in order to gain maximum stock-access and fulfilment options while also avoiding crowds. The overall value of these two days to UK retailers has greatly increased as well. Last year saw record sales figures in the UK, with sales on Black Friday surpassing £1 billion for the first time. 2016 is predicted to see an 11 per cent in online sales throughout the week, accompanied by a similar decrease in high street footfall. While Cyber Monday was created as a wholly online counterpart to Black Friday, the latter has since become a largely online event as well; £2.6 billion worth of goods are expected to be purchased via smartphones alone.
Google has taken advantage of the upcoming sales to unveil its live footfall tracker, which enables Google Maps to show how busy high street shops are in real-time giving savvy shoppers another excuse to avoid the high street and go online instead.
The proposed regulations, however, would effectively disable the majority of one-click shopping and automatic app payments. With 62 per cent of Black Friday and Cyber Monday shoppers planning to use their smartphones or PCs, of which 41 per cent are doing so to avoid facing queues, retailers can expect a serious loss in sales from cart abandonment if these regulations come into effect. In 2017, the upward trend of Black Friday sales could reverse, perhaps disastrously, Mel concluded.