How to reduce cart abandonment rates
Customer experience is essential to improve conversion rates in the e-commerce market. It’s important to make the buying and paying process as easy as possible, creating fewer barriers to a full 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, more enjoyable payment experience, and the innovative solutions that are shaping the online marketplace.
It has never been easier to buy online. Gone are the days when consumers had to go through countless forms, filling out personal information, shipping address, card information, billing addresses, and authentication. Today, many top brands are using a more efficient transaction process to help consumers purchase their products. All it takes is one click.
Frictionless transactions are essential for online stores that want to increase their conversion rate from cart to checkout. Did you know that the average cart abandonment rate in all industries is 69.8%? Reducing the barriers to a full checkout is essential. This is achieved through processes such as one-click purchases, where customer details are stored to enable a faster purchasing process. The reduced time eliminates any hesitation on the part of the customer, which means businesses can increase their conversion rates. At the end of the day, the customer gets the product we all know he wants.
It is possible that this could adversely affect the customer experience. Faster purchasing processes increase the potential for fraud and abuse. Businesses can use checks, such as a captcha, to make sure customers are legitimate. This is another barrier to a full checkout that real customers can struggle with. Finally, a customer can abandon their cart. To avoid this, trade protection platforms such as Signified optimize the transaction experience. Smart, automated modules can accurately identify fraud and abuse risks, 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 four to six percent on average.
E-commerce is increasing its share of the global retail market. In 2015, online transactions represented 7.4% of all retail sales. By 2020, that figure had jumped to 18%. The ease of shopping and the variety of choices make the online world a fierce competitor to traditional brick and mortar stores. But not being able to see or experience a product before purchasing it can prevent buyers from trying before they buy from visiting online stores.
Some stores see the POS loan or Buy Now, Pay Later (BNPL) services as the solution to attract these customers. At checkout, customers can choose to pay for their products later. Once they have received their products and are satisfied with it, customers can complete the purchase. If they are not convinced and want to return the proceeds, they can do so by canceling the loan without the money leaving their bank account.
These BNPL services work a little differently from loans. They don’t earn their money from the interest on the loan, but rather take a small portion of your final bill from the retailer. The technician 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 do not match or fit may be returned, allowing customers to pay only for what they have kept.
Will this trend stay? This is uncertain, as some European lawmakers – like the UK Treasury – are starting to regulate these services. They think these small loans should fall under the Financial Conduct Authority. They warn that the BNPL market, valued at £ 2.7 billion ($ 3.7 billion), may cause people to spend more than they can afford. Therefore, this trend may be short-lived or come with more serious obstacles in the future.
The way we pay continues to change. In stores, we used cash, cards and now contactless payment. Online, our options are also expanding. Where computers and card payments gave rise to e-commerce checkouts, today mobile traffic and digital wallets are helping to improve the customer experience.
In February 2021, the mobile activity constituted 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 display information online.
However, the conversion rate of e-commerce 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 e-commerce checkouts. This may be because companies haven’t optimized their online payment for mobile devices. Ecommerce businesses need to improve the customer experience on mobile devices, by understanding how it differs from desktop shopping.
Digital wallets are an example of an optimized mobile experience. Allowing customers to purchase goods using their linked mobile bank account means purchases can be made using the security of fingerprint or face scanning, automating the delivery and billing process.
Other payment trends facilitate the mobile customer experience and prevent cart abandonment. Unnecessary buttons that may move away from the checkout, such as hamburger menu icons, are removed during the checkout step. All buttons needed to complete the transaction should be kept in the “thumb area” – this means all essential buttons are within easy reach of a mobile user. This makes the payment experience more comfortable for the customer and can speed up the payment process.
Adopting innovative solutions for the online payment experience will help you drive conversions, improve your business, and help customers on their buying journey. Understanding how technology is evolving and the new ways we use it ensures that businesses can thrive with the e-commerce revolution. Businesses can be proactive in fraud prevention, user experience, and diversifying payment options to create a simple and enjoyable customer experience.