PayPal Commerce Index: social and security top of mind for UK consumers

Jan 20 2020 | PayPal Editorial Team

UK social commerce (selling on social media platforms) is set to double over the next 6 months1. That’s one of the findings from PayPal’s fourth annual Commerce Index.

The new research also found that security remains a concern for the UK’s online consumers and that UK businesses may be missing out on the international opportunity. Let’s look at those in turn.

The social commerce opportunity

Almost one in 4 (24%) British businesses already allows customers to make transactions through their social media channels. That’s set to double over the next 6 months as mobile shopping extends into social channels. The stronger customer connection that businesses can build on social channels appears to be valuable. Those that already sell on social say that 38% of their sales volume comes via social media.

That’s a big number, but it compares with a global average of 45% of sales volume. UK sellers and buyers are clearly playing catch-up on social commerce. And, that means a huge opportunity for UK businesses to get ahead of the game. Currently 8.4m British consumers shop via social media2, with Facebook, Instagram and Snapchat being the most popular channels. A fifth of those already purchasing through social do so weekly, with individual social spending averaging £71 monthly.


Who’s buying what on social media?

Social commerce is growing within all age groups but, as you’d expect, it’s the younger demographic that’s leading the way. Almost one in 4 (24%) Millennials and just over 1 in 5 (22%) Gen Z-ers have purchased or paid using social media in the last 6 months. That compares with 1 in 6 (17%) from Gen X and 1 in 9 (11%) Baby-boomers. Perhaps unsurprisingly, the top categories for social commerce are Clothing & Accessories (15%) and Health & Beauty (10%). Other popular categories include Home & Garden (8%), Books & Magazines (7%), Food & Drink (6%) and physical Toys & Games (6%).

mcommerce index

Security stays top of mind

The Commerce Index also found that security and trust remain a concern for UK online shoppers. They are also the top priorities for UK online businesses. “Ensuring the privacy of customer data” ranked as the top priority for business (at 34%). “Ensuring the security of ourIT/technology system” came a close second (33%).

For shoppers, the convenience of using a mobile device wins out with almost three quarters (73%) of consumers using mobile devices for purchases and payments. Nearly half (48%) use their mobile at least weekly for purchases and payments.

Security or trust issues remain a potential barrier, however, cited by nearly two-thirds (64%) of shoppers. That’s the highest level of all the 11 markets surveyed. One in 4 (26%) UK shoppers have abandoned a transaction on mobile because of security concerns.

As social commerce grows in popularity, there will be an increasingly a close eye kept on the data collected during the social shopping experience and its potential implications. No surprise then that this is reflected in the Commerce Index research:
  • 39% say “I don’t trust the process of buying on social media platforms”
  • 38% say “I don’t want my financial information linked to my social media”
  • 37% say “I am worried about safety / security of my personal information on social media.” 
To capture the social commerce opportunity, businesses will need to pay special attention to these concerns by providing processes and payment methods that are trusted and secure.

Don’t miss the cross-border opportunity

The Commerce Index research also suggests that the UK’s online businesses may be missing out on cross-border sales. While 1 in 3 UK businesses have made international sales in the past 6 months, only 10% of businesses say that they actively target international buyers. But global online shoppers increasingly enjoy cross-border shopping. Our research suggests that more than half (55%) of consumers shop across borders on a regular basis.

The top reasons for shopping on international sites are:
  • Access to items not available in their home market (50%)
  • Better prices (46%)
  • To discover new and interesting products (28%).
Add to that the fact that British brands are often highly valued by overseas shoppers and the research suggests a large and untapped opportunity for the UK’s online sellers.
In our research, 17% of business respondents said ‘selling to international customers has helped our business grow’.

About the PayPal Commerce Index

This is the fourth year of the UK PayPal Commerce Index. Each year, we take a look at the latest trends in mobile commerce (mCommerce) in the UK and across the globe. It’s no surprise that consumers are buying on mobile at a rate greater than ever before. That’s why we also looked into key trends related to mobile shopping habits and merchant readiness, how security remains top-of-mind in English speaking countries, and the fact that shopping on social platforms is growing at an unprecedented rate – despite being a relatively new phenomenon. 

By putting these insights to work and building partnerships with payments specialists, like PayPal, business owners should feel well-equipped to take on the world of selling online. Looking to 2020 and beyond, there is more potential than ever for merchants to improve the shopping experience for all consumers, while addressing preferences of unique markets. Merchants can take advantage of the rise of mobile and social commerce by working with a partner that enables them to create better digital experiences, capture more sales, and ultimately drive growth.

Today, more than 22 million merchants rely on PayPal to build, run, and grow their businesses. PayPal serves as a trusted partner to businesses around the world, enabling them to accept payments in more than 200 markets around the world. PayPal also provides fraud and risk detection capabilities, and tools like invoicing that help businesses get paid faster. To learn more, visit our business solutions page
The information in these articles does not constitute financial, business or investment advice of any kind and does not count as a substitute for any professional advice.  Always do your own research on top and seek professional advice if you want to ensure that what you do is right for your specific circumstances. 

1All statistics, unless otherwise stated, are taken from research conducted by Ipsos on behalf of PayPal between 23.07.19 - 25.08.19. Ipsos interviewed a quota sample of c.2000 (22,000 in total) consumers (aged 18-74) who owned or used a smartphone and c. 300-500 (4602 in total) Business influencers or decision makers who sell or take payments online to Consumers (and businesses) in each of 11 countries (UK, France, Germany, Italy, Spain, Australia, India, Japan, USA, Mexico and Brazil).

2Office for National Statistics: Projected UK adult population for 2018, 8 June 2018: https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/projectedukadultpopulationfor2018
 

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