Building Trust
to Secure
Wallet Share
People spend more with trusted brands – how much more is higher than you might think. Trust is critical for consumers and, while many factors influence trust, online experience is a crucial component – from account creation and authentication to shipping & returns, loyalty programs and more.
Amid economic uncertainty and with more discerning shoppers than ever, the brands that secure more wallet share will be those that prioritize building trust across the entire customer journey.
For retailers, it comes down to fostering
and maintaining trust through each and
every interaction.
Many retailers use friction to validate good shoppers. Some treat it as a necessary evil, creating time-consuming roadblocks for fraudsters at the expense of good customers. For the second year in a row, the survey revealed that friction is actually losing retailers money at alarming rates.
78% of US and UK consumers will likely abandon their online shopping carts if the process is too difficult or time-consuming.
The Importance of Policies
While revenue loss from cart abandonment stings, nothing is more painful for retailers than false declines. The good news? False declines are down considerably in the U.S. at 31% in 2024 vs. 56% in 2023, with a slight decrease in the U.K. from 35% in 2023 to 33% in 2024.
This improvement is likely due to the adoption of advanced fraud detection technologies, which have become more sophisticated. These technologies allow retailers to better identify legitimate transactions and reduce false rejections. Additionally, a stronger focus on personalized customer experiences has helped retailers implement more accurate fraud prevention measures, minimizing disruptions for legitimate shoppers.
Improved consumer education on online shopping security may also contribute to this trend. As consumers become more aware of safe practices, their behaviors are less likely to trigger false declines. However, despite these improvements, false decline rates are still too high, given the tight margins and unpredictable consumer behavior retailers face today.
Doriel Abrahams is the Principal Technologist at Forter, where he monitors emerging trends in the fight against fraudsters, including new fraud rings, attacker MOs, rising technologies, etc. His mission is to provide digital commerce leaders with the latest risk intel so they can adapt and get ahead of what’s to come.
Perks such as loyalty programs, deep discounts, and flexible return policies are significant draws for consumers, especially younger generations looking to save money. However, these programs are prime targets for fraud and abuse, causing retailers to implement more friction and create additional pain points for consumers.
Loyalty programs, in particular, are highly valued — with 72% of respondents stating that a brand’s loyalty program is important when deciding where to shop. This is especially true for Gen Z and Millennials, with 78% and 79% respectively indicating loyalty programs as crucial.
Loyalty programs are a significant draw for consumers but also a prime target for fraudsters. Forter’s data shows that accounts with loyalty points are 4-5 times more likely to be targeted by fraudsters*, especially among Gen Z and Millennials. Despite their engagement, these groups face the highest risk of account takeovers (ATOs) and wrongful declines at checkout.
Younger generations, including Gen Z and Millennials, are often more digitally active and exposed to personalized ads, making them more vulnerable to fraud. Although 79% value loyalty programs, 29% have had their points stolen in the last three months. This disconnect between ad personalization and account security undermines trust.
Protecting accounts to maintain trust
The research was conducted by Opinion Matters in June 2024. The survey gathered responses from 2,000 adults aged 18+ who have at least two active online eCommerce accounts and shopped online at least once in the last three months in the UK and USA. There were 1,000 respondents from each territory
About the Report
Methodology
Forter is the Trust Platform for digital commerce.
We make accurate, instant assessments of trustworthiness across every step of the buying journey. Our ability to isolate fraud and protect consumers is why Nordstrom, Instacart, Priceline and leaders across industries have trusted us to process more than $1 trillion in transactions. Our deep understanding of identity intelligence and the use of automation helps businesses prevent fraud, maximize revenue and deliver superior experiences for their consumers.
About Forter
© 2024, Forter Inc all rights reserved.
Top Takeaways
1. Trust is tangible, not just a “feel-good” factor
2. Friction has a hidden cost
3. Loyalty programs and policies must be a priority
4. Consumers are ready to spend this holiday season … with brands they trust
5. Shopping has gone social
6. What’s next for retailers and consumers?
Trust is not just about making consumers
feel good; it translates directly into revenue.
The “Trust Premium,” or the additional amount consumers are willing to spend with brands they trust, stands at an impressive 51% in 2024 — slightly higher than 50% in 2023.
Consumers are putting their money where their mouth is — choosing to shop elsewhere if they encounter even the slightest friction, especially when dealing with overly complicated shipping and return policies.
These friction-filled experiences, particularly with complicated shipping and return policies, can erode trust in the brand, driving customers to seek more reliable options.
Combines 'Extremely important' and 'Somewhat important'
Trust is Tangible
Cost of Friction
Prioritizing Loyalty
Holiday Trends
What’s next?
Trust Premium
The Next Generation
Experiencing Friction
Building Trust
What’s next?
Trust is tangible, not just a “feel-good” factor
Average monthly online spend per consumer
$219
U.S.
£172
U.K.
Friction has a hidden cost
In fact, in the last three months:
of consumers said that return policies are important in deciding where to shop
of consumers have abandoned a cart in the last three months due to restrictive return policies
of consumers said that shipping policies are important in deciding where to shop
of consumers have abandoned a cart in the last three months due to restrictive shipping policies
Doriel Abrahams, Principal Technologist, Forter
Loyalty programs and policies must be a priority
To address this, retailers must invest in advanced identity intelligence and security measures to
protect accounts from fraud without adding friction. Secure loyalty programs not only attract and retain customers but also foster stronger, more trusting relationships with them.
Consumers are ready to spend
this holiday season …
with brands they trust
With 51% more wallet share up for grabs, this holiday shopping season will be a stress test for retailers – ensuring their customer experience from start to cart is seamless.
How has the increased cost of living affected consumers’ plans for online holiday shopping in 2024 compared to 2023?
Shoppers are cost-conscious this year, making it important to offer discounted and free shipping. In fact, according to Caila Schwartz, Director of Industry Insights at Salesforce, over half* of shoppers say they are more likely to purchase online than in-store if delivery is free.
Salesforce Insights
Last-mile challenges are stacking up thanks to world events and rising delivery costs – stalling delivery times and adding expenses for retailers. But retailers shouldn’t push the shipping expenses back on shoppers. Free shipping offers are a top-three reason why consumers choose to make a purchase from a particular brand or retailer.”
via Salesforce 2024 Holiday Shopping Predictions
Social commerce is rapidly becoming a dominant trend in online shopping, with 89% of respondents globally having made purchases on platforms like TikTok and Instagram. However, despite its growing popularity, security concerns persist, as many of these same shoppers do not trust that their personal information is secure when shopping on social commerce.
Shopping has gone social
The reverse of 'N/A Do not shop on social commerce platforms' - 11%
What’s next for retailers
and consumers?
Combines ‘Very likely’ and ‘Somewhat likely’
Consumers are becoming more cautious with spending, reflecting a trend towards more strategic and value-driven shopping. Many are likely to take advantage of the buy now, pay later (BNPL) option, with 48% of consumers indicating they will use BNPL for online holiday shopping. This preference for flexible payment options highlights retailers' importance in offering diverse and consumer-friendly payment methods.
Retailers must focus on providing value and convenience, ensuring that their offerings meet the needs of cost-conscious shoppers. This means prioritizing clear communication of value, offering flexible payment options, and creating seamless online shopping experiences.
* Combines 'Do not trust at all' and 'Do not trust too much'
** Combines 'Completely trust' and 'Somewhat trust'
The Trust Premium Report's findings make one thing abundantly clear: building trust directly translates to wallet share.
Growing LTV isn't limited to launching new products or spending heavily on advertising. Instead, it's about delivering seamless and secure customer experiences, addressing security concerns, and being transparent in every interaction.
Invest in Trust-Building Measures
Enhance customer experiences with transparent, secure, and seamless interactions to secure the Trust Premium.
Prioritize Shopping with Trusted Retailers
Choose retailers with clear, customer-friendly policies and take advantage of benefits from trusted brands.
Minimize Friction
Streamline checkout processes and implement user-friendly return and shipping policies.
Be Aware of Friction & Advocate
for Better Experiences
Provide feedback to retailers about friction points and advocate for smoother, more user-friendly processes.
Enhance & Secure Loyalty Programs
Create transparent loyalty programs and invest in security measures to protect points and customer accounts.
Utilize & Protect Loyalty Programs
Participate in beneficial loyalty programs, protect your rewards from fraud, and report any theft or account takeovers.
Adapt to Evolving Consumer Preferences
Offer flexible payment options like Buy Now, Pay Later (BNPL) while addressing security concerns on social commerce platforms.
Stay Informed About
Security in Social Commerce
Be cautious about sharing personal information on social commerce platforms, and choose those with strong security measures.
Retailers
Consumers
Opinion Matters is an award-winning insight agency. Their consultants create bespoke market research solutions for businesses, organisations, and agencies worldwide. They are experts in creating concepts, implementing and managing projects, analysing results and reporting. The agency operates internationally, offering highly targeted niche panels that are more pertinent to specialist audiences and media requirements. Generic samples are also available.
Opinion Matters abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Opinion Matters is also a member of the British Polling Council.
About Opinion Matters
These practices are common among well-intentioned retailers aiming to curb fraud or abuse. Unfortunately, the friction-filled customer journey created by these measures is becoming a significant hidden cost.
Clear and customer-friendly loyalty program policies are crucial in maintaining consumer trust and loyalty. Friction in these policies can lead to significant customer churn, as shoppers quickly abandon brands that do not meet their expectations. And while nearly 3 of every 4 consumers said that loyalty programs are an important piece of a purchasing decision, nearly 1 in every 5 has been the victim of loyalty abuse.
The importance of loyalty programs and perks is evident. However, to fully leverage them, retailers must implement these programs while ensuring any abuse prevention solutions do not over-rotate on friction for trusted customers.
*according to Forter’s first-party data
72
%
of consumers said that loyalty programs are important in deciding where to shop
more likely to be targeted by fraudsters if the account holds loyalty points.
4-5
of consumers have had loyalty points or rewards stolen in the last three months
18
%
The stark contrast between the high usage of social commerce platforms and the significant portion of users who feel these platforms are unsafe creates a unique challenge in building trust. This disparity underscores the heightened importance for retailers to foster trust by creating seamless and secure customer experiences. As social commerce continues to grow, addressing security concerns transparently and effectively will be crucial in maintaining consumer confidence and ensuring the long-term success of these platforms.
To unlock the full potential of the Trust Premium, retailers must invest in building and maintaining trust, driving higher average order values (AOVs), and boosting their bottom line. Failing to do so leaves substantial money on the table for retailers.
Salesforce predicts brands and retailers will spend an extra $197 billion in middle-mile expenses this holiday season, increasing 97% over last year.*
Make reduced or free shipping standard practice this year — motivating shoppers to buy online and pick up in-store while lowering costs and potentially increasing basket size.
of consumers have abandoned their shopping cart because of a complicated checkout
31
%
of consumers abandoned their cart due to payment verification and/or multifactor authentication
20
%
of consumers have abandoned their cart because they were required to create an online account
23
%
Social Shopping
Despite ongoing economic pressures, nearly half (48%) of consumers indicate they will spend the same or more on holiday shopping in 2024.
The question isn’t whether consumers will shop but where they will choose to spend their money.
more wallet share up for grabs
51
%
When deciding where to shop online, what percentage of consumers consider the following factors important?
*according to Salesforce’s first-party data
Trust* levels vary by age, with 61%** of Gen Z and Millennial respondents feeling secure about their personal information, compared to only 48% of Gen X.
Coined the “Trust Premium,” consumers are willing to spend 51% more, on average, with a retailer they trust.
51
%
times