As consumer demands continue to grow, delivering high-quality e-commerce experiences and improving the customer journey has never been more important to attracting and retaining online shoppers. However, regardless of consumer calls for personalized and easy-to-navigate online stores, retailers are failing to meet the basic demands of their customers when it comes to the final stages of the transaction process. New research from PPRO reveals that 44% of UK consumers will abandon a purchase if their preferred payment method is unavailable. In fact, this percentage jumps to 51% for Generation Y (those born between 1980 and 1993), closely followed by Generation Z (those born between 1994 and 2001) at 48% – arguably the two most active generations in regarding online shopping.
In a particularly turbulent and unpredictable time for the retail industry, online competition has become increasingly fierce. Therefore, retailers simply cannot afford to lose sales on the checkout page. While consumers clearly appreciate the availability of preferred payment methods; this essential requirement is often overlooked by retailers, leading to them losing a sale at the very last hurdle – a common cause of declining conversion rates.
Retailers need to realize the importance of allowing their customers to complete a purchase with their preferred payment methods. Otherwise, retailers run the risk of not only missing out on that one transaction, but also losing a potentially loyal customer. In today’s customer, every penny counts more than ever.
Why do online shoppers abandon their shopping carts?
According to a recent study by the Baymard Institute, the average cart abandonment rate currently stands at 70%. Brands need to recognize what drives consumers to leave the checkout point to respond to this disturbingly high statistic, and that starts with looking at what shoppers value, need, and expect in a customer journey.
Consumers demand speed and convenience when shopping online. Many retailers invest heavily in a website to ensure it’s easy to navigate, streamlined and built with the customer in mind, to keep up with competitors – but that investment will be wasted if checkout processes and of payment do not follow the same nature.
The need for speed and convenience has been exacerbated by the so-called “Amazon Effect”, which has led consumers to demand instant gratification and set ever-higher expectations for online shopping. a click. Therefore, time-consuming manual processes simply will not suffice. More than half of UK respondents would abandon a purchase if the checkout process was too complicated, while 37% would avoid using a merchant who required them to enter payment details every time. A further 40% of UK consumers prefer to use a merchant whose payment details are already on file. Together, these figures underscore the urgent need for retailers to enable a fast and seamless transaction experience, with appropriate payment methods and preferences.
Offer alternative means of payment
While the majority (91%) of UK consumers are confident using, or have used, debit and credit cards for online purchases, there is also a growing number of consumers turning to alternative methods. alternative payment methods – particularly 42% of Millennials and 35% percent of Gen Z. Payments is certainly not a one-size-fits-all approach, and with over 450 major local payment methods in use around the world, it is no longer enough for retailers to simply offer only credit or debit card payments. for UK consumers.
From the growing use of PayPal to prepaid cards, mobile wallets (Apple and Google Pay), Pay Later products like Klarna and Clear Pay, or new bank transfer products like PayByBankApp in the UK, retailers need to reflect this change in shopping behavior and ensure that a wide range of payment options are offered at online checkout. With global spending on mobile wallets expected to reach nearly $14 trillion by 2022, those that don’t risk excluding a significant proportion of consumers and losing market share as a result.
While speed is essential for online payments, knowing a payment method is just as important. Customers establish some element of trust when they switch to a preferred payment option, with up to 23% of UK consumers saying they never switch to a new method. This indicates that if brands should seek to adopt and include new payment methods; they need to keep a range of options available – so they don’t discourage customers from clicking that last “buy” button.
Shaping the future of online customer experiences
Before Covid-19, analysts predicted that online shopping would more than double its share of the retail market over the next ten years – that statistic is likely to be even higher now. Growth in online sales means the retail market will only become more crowded with multiple brands offering similar products at similar prices. The ones that will prevail and maintain a competitive edge will be the brands that deliver a seamless customer journey from start to finish.
Given the importance of variety in terms of payment methods and UK consumer preferences, retailers should offer a range of payment options on the online checkout page which encompasses both alternative methods traditional and more recent. By recognizing consumers’ payment needs, customers will have no reason to abandon their carts in the final stages of completing a transaction.
While high cart abandonment rates may seem like an inevitable part of doing business in today’s highly competitive retail industry; it is certainly not necessary. The negative impact of conversion rates can have a detrimental effect on the success of a business of any size, especially in an already turbulent and uncertain market. There are, however, clear and concrete steps that online brands can take to address the problem, simply by being aware of the payment needs of today’s consumer.
Online retailers can win and retain loyal customers by having payment options that bring simplicity, convenience and speed to every transaction – no matter who the customer is, no matter the value of the ticket and no matter how the customer chooses to pay. pay. Those who recognize this reality will be in the best position to compete in the evolving digital retail market.
James Booth, VP Partnerships, EMEA, PPRO