Removing failed payments could increase this year’s Black Friday sales by up to £200mn for UK online retailers, BR-DGE data reveals
Edinburgh, 25th November 2022: UK online retail businesses could increase their gross sales by up to £200 million during the 2022 Black Friday weekend (25th - 28th November) if failed payments are avoided, according to the latest analysis by BR-DGE’s failed payments calculator.
Recent data from VoucherCodes1 forecasts that UK shoppers are set to spend £8.71bn this Black Friday Weekend. BR-DGE analysis of this data suggests that £2.38bn will be spent online over the weekend by UK consumers2. Over the course of the Black Friday weekend, 8.4% of online consumer payment transactions could be unsuccessful based upon average failure rates in the UK market.
Fragmented payment systems, put under increasing pressure by the massive growth in digital commerce, can result in failed transactions and unprocessed baskets. If this was eradicated, this weekend’s total spending across online retail could be as much as £2.57bn. Furthermore, with intelligent routing and a greater commercial leverage through payment orchestration platforms, like BR-DGE, online retailers could further gain on operating margins and offer a better service to their customers by keeping up with their evolving payment needs.
Jacob Spencer, Head of Commercial at payments firm BR-DGE said: “This year’s Black Friday weekend has grown in importance as savvy consumers look to snap up the best deals before the pre-Christmas sales finish. Whilst UK consumers will be looking for greater affordability against the backdrop of rising prices, they will also be searching for a stress-free, seamless shopping experience from online retailers. Positively for online retailers, the data shows that e-commerce businesses could generate up to £200 million extra in sales this Black Friday weekend if failed transactions were avoided.
“On the flip side, the high amount of likely failed transactions is a blow for retail during this tricky trading period as it holds back online sales, and creates friction in the customer journey. For those looking to tempt new customers with big offers during Black Friday, the knock-on impact of failed transactions is reduced customer loyalty and repeat business as customers look elsewhere. Studies have shown that 62% of consumers abandon their cart when they struggle to complete a transaction highlighting the value of having strong payment systems in place. Merchants need to put their best foot forward when it comes to payments infrastructure and invest in more resilient payment solutions that integrate multiple providers and payment methods in order to avoid ongoing failed payments.”
References:
1 VoucherCodes “Shopping for Christmas Report 2022: Black Friday Weekend” report, November 2022 - link here
2 By analysing the Office for National Statistics “Internet sales as a percentage of total retail sales (ratio) (%)” data set (link here), BR-DGE has been able to calculate that in the 12 month period to October 2022, 27.3% of UK shopping sales took place online. Combining this average with VoucherCodes' forecast that total Black Friday spending by UK consumers will total £8.71bn, BR-DGE’s failed payments calculator has been able to predict the total online failed payments across the Black Friday weekend.
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