62% of luxury brand consumers will shop elsewhere if retailers provide a poor payment experience, according to research published today by Vyne.
The report which is titled High-value consumers’ payment preferences unpacked: The post-pandemic shift in luxury shoppers’ demands explores the online payments preferences and experiences of over 2,000 British consumers, following nearly a 12% rise in the purchasing of online luxury goods in 2021.
The research reveals that over 86% of respondents with a household income over £75,000 (higher income households) are open to trying out new methods of online payment, which is 25% more than those from households with a lower annual income (61%).
Frustrations with card payments, such as slow authentication checks and concerns around fraud, have left luxury retailers seeing a dramatic increase in basket abandonment. In an average week, 19% of individuals from higher-income households abandoned their basket at an e-commerce checkout.
Security is a major concern affecting luxury brand shoppers and 74% of respondents from higher income households stated that they would use an option which enables them to authenticate themselves using their banking app, rather than using traditional card payments, if this was available to them.
Karl MacGregor, CEO and Co-founder of Vyne, says: “There is a clear appetite for the purchasing of high-value goods, as the luxury retail sector saw a total revenue of £12.16bn in 2021. The challenge is that high-value consumers expect seamless experiences and the current payment options being provided by most luxury brands do not live up to these expectations. Our research demonstrates that high-value shoppers will not tolerate outdated payment solutions. If luxury retailers want to build a loyal customer base and reduce checkout abandonment, it is imperative that they implement solutions fit for the modern consumer.”
The report also uncovered that the return of purchases has been a major pain point for online shoppers, with 31% of all respondents stating that the refund process is tedious and frustrating. 76% of respondents in higher income households (over £75,000pa) claimed they would be more likely to shop with a luxury brand if they offered instant refunds and, if available, almost 4 in 5 (78%) would use a payment method that enabled instant refunds over their traditional payment method.
Luke Flomo, Chief Revenue Officer at Vyne, adds: “Payment methods that were not designed for the digital world negatively affect consumer sentiment and drive away potential customers. Open Banking offers a more modern, transparent and seamless approach that benefits both buyers and sellers in a transaction. Indeed, consumers are crying out for the benefits it offers – from stronger security to better user experience.”