SME online fashion retailers face barriers to innovation, Klarna

Small online fashion retailers in the UK are open to embracing innovative technologies, but various challenges are preventing widespread adoption, according to research by Klarna.

This was conducted across 100 decision makers at e-commerce players in 2019. Over the next 12 months they plan to prioritise investing in flexible payment options (49%) and e-commerce capabilities (48%) to meet consumer demand for a frictionless shopping experience.

In terms of challenges, 53% said the cost of introducing flexible payment options was the biggest barrier to adoption. The UK’s current turbulent landscape is also inhibiting tech spend; whilst SME online retailers have budgets set aside for investment in new technologies, 48% cited uncertainty around Brexit as the main reason they’re currently halting investment. This was followed by not knowing what tech will provide the best return on investment (31%).

But SMEs who let this stand in the way could be damaging their bottomline in the long run, especially as 54% said competition from bigger players and online giants is the biggest external challenge currently impacting them.

The research shows that online SME retailers are thinking ahead and have plans in place to boost customer experience within their businesses over the next 12 months. They also understand the importance of an omnichannel presence, with 74% having created some form of physical experience for their customers in the past. Yet whilst customer loyalty remains stable, SMEs are losing more customers than they should during the checkout process; 21% of visits result in a dropped basket, according to Klarna’s research.