Customer experience is key to improving conversion rates in the e-commerce market. It’s important to make the purchase and payment process as easy as possible, creating fewer obstacles to a complete sale.
While online sales have become the new normal for fast and efficient shopping, there is still room for improvement and growth. Here, we explore customer expectations for an easier and more enjoyable payment experience, and the innovative solutions that are shaping the online marketplace.
It has never been so easy to buy online. Gone are the days when consumers had to wade through countless forms, fill in personal information, shipping address, card details, billing addresses and authentication. Today, many top brands are using a more efficient transaction process to help consumers purchase their products. It only takes one click.
Frictionless transactions are essential for online stores looking to increase their cart-to-checkout conversion rate. Did you know that the average shopping cart abandonment rate across all industries is 69.8%? Reducing barriers to full checkout is essential. This is achieved through processes such as one-click purchases, where customer details are stored to enable a faster purchase process. The reduced time avoids any ulterior motives on the part of the customer, which means businesses can increase their conversion rates. In the end, the customer gets the product we all know they want.
It is possible that this will negatively affect the customer experience. Faster purchase processes increase the potential for fraud and abuse. Businesses can use checks, like a captcha, to make sure customers are legitimate. This is another barrier to full payment that genuine customers may struggle with. Eventually, a customer can abandon his shopping cart. To prevent this, commerce protection platforms such as Signifyd optimize the transaction experience. Intelligent, automated modules can accurately identify the risk of fraud and abuse, stopping them in their tracks, while customers benefit from a streamlined order fulfillment process. Overall, the customer experience is so improved that these automated agents can increase conversion rates by an average of four to six percent.
E-commerce is increasing its share of the global retail market. In 2015, online transactions accounted for 7.4% of all retail sales. By 2020, that figure had risen to 18%. Ease of shopping and variety of choices make the online world a fierce competitor to traditional stores. But not being able to see or experience a product before buying it can prevent try-before-buy shoppers from visiting online stores.
Some stores see point-of-sale loans or Buy Now, Pay Later (BNPL) services as the solution to attracting these customers. At checkout, customers can choose to pay for their products later. Once they have received their products and are satisfied with them, customers can complete the purchase. If they are not convinced and wish to return the products, they can cancel the loan without the money leaving their bank account.
These BNPL services work a little differently than loans. They don’t make their money from interest on the loan, but rather take a small cut of your final bill from the retailer. The technology quickly checks your eligibility before approving your small loan.
This trend is popular among clothing retailers, where customers may want to try on a variety of styles and sizes before committing money to the purchase. Items that don’t fit or fit can be returned, allowing customers to only pay for what they kept.
Will this trend continue? That’s uncertain, as some European lawmakers — like the UK Treasury — are starting to regulate these services. They believe that these small loans should come under the Financial Conduct Authority. They warn that the BNPL market, valued at £2.7bn ($3.7bn), could encourage people to spend more than they can afford. Therefore, this trend could be short-lived or come with greater hurdles in the future.
The way we pay continues to evolve. In store, we have used cash, cards and now contactless payment. Online, our options are also growing. Where computers and card payments gave birth to e-commerce checkouts, today mobile traffic and digital wallets are helping to improve the customer experience.
In February 2021, mobile activity accounted for 56% of all online traffic. Meanwhile, mobile searches account for 60% of all online searches. It is clear that mobiles are the most convenient and preferred way to view information online.
However, the e-commerce conversion rate on mobile devices is only 2.25%. Meanwhile, desktop conversion rates stand at 4.81%. The trend of online traffic does not correlate with our online payments. This may be because companies have not optimized their online payment for mobile devices. E-commerce businesses need to improve the customer experience on mobile devices, understanding how this differs from desktop shopping.
Digital wallets are an example of an optimized mobile experience. Allowing customers to purchase goods using their mobile-linked bank account means purchases can be made using fingerprint or facial recognition security, automating the delivery and billing process.
Other payment trends facilitate the mobile customer experience and prevent cart abandonment. Unnecessary buttons that may stray away from the checkout, such as hamburger menu icons, are removed during checkout. All buttons needed to complete the transaction should be kept within the “thumb area”, which means that all essential buttons are within easy reach of a mobile user. This makes the checkout experience more comfortable for the customer and can speed up the checkout process.
Adopting innovative solutions for the online checkout experience will help you drive conversions, improve your business, and help customers through their buying journey. Understanding how technology is changing and the new ways we use it ensures businesses can grow with the e-commerce revolution. Businesses can be proactive in fraud prevention, user experience and diversification of payment options to create a simple and enjoyable customer experience.
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