The online retail climate is an ever-changing competitive environment, which is why it is crucial that retailers offer a vast array of payment methods to their customers.
The retail industry has dramatically transformed in recent years and continues to do so at a rapid pace The days of bricks and mortar stores being a consumer’s only option are long gone as the increase in online shopping has meant that consumers now have higher expectations when it comes to buying online.
From easy to navigate web pages, to a wide variety of products and getting items delivered straight to your door, all of these methods save consumers time, effort, and in some cases money.
The combination of the death of the high street, and the instantaneous nature of buying goods online has meant that customers shopping expectations have changed.
Consumers demand immediacy and expect retailers to provide a seamless shopping experience during every transaction. However, one thing that is far too often overlooked, is the payment process customers face at the checkout stage. Online retailers are continuing to lose out on sales by failing to address their consumers preferred payment methods; offering a wide choice of local and preferred payment methods is crucial, otherwise, retailers risk losing potentially loyal customers to their competitors.
According to PPRO’s own research, 67% of UK consumers have abandoned an online purchase simply due to the payment process on offer. The research revealed that just over a fifth of these (22 per%) left their shopping basket because the process was too complicated, while 21% failed to complete the transaction at all as the merchant didn’t offer them their preferred payment option. This demonstrates how important payment methods really are to the consumer when buying goods.
It is always essential that consumer expectations around payment processes are addressed, otherwise, retailers put themselves at a huge risk. However, there are several other aspects to consider:
- Cultural differences when it comes to payments
When it comes to addressing consumer expectations around offering suitable payment processes, it’s important to consider that preferences differ from country to country.
For example, research by PPRO has revealed that 50% of consumers shopping in the UK prefer paying with PayPal, and 43% prefer paying by debit or credit cards. In countries such as Germany, most digital buyers prefer payment on account and via direct debit. Merchants need to know exactly who is shopping on their site and must accommodate to their preferences accordingly.
Payment preferences vary just as much as languages do and when it comes to attracting global customers, the last thing merchants want is the method of payment to be the barrier to potential sales.
Picture this situation – a customer in Germany goes to a UK merchant’s site to make a purchase. They get through the perfectly translated front-end but when they reach payment, they do not recognise any of the methods offered to them. The likelihood is they will abandon their shopping basket and go elsewhere. Limiting payment options ultimately limits global reach, all the while extending a competitor’s reach. To truly go global, merchants don’t need to just break down language barriers, but also the payment barriers that their customers are facing.
- The risk for retailers who don’t offer local, alternative payment methods
Payments and payment methods have come a long way since the advent of online shopping. Customers expect to be able to buy what they want, when they want and how they want. This was substantiated in our research study, which showed that 90 per cent of UK consumers expect to have the option to pay by a number of means when they shop via the internet.
It’s no longer adequate to offer customers just one single way of paying – both in-store and online. Not everyone has a credit or debit card, and if this is all that’s on offer, merchants will inevitably lose out on sales from those who prefer to pay by a local, alternative payment method.
For example, the internet has introduced card-free methods, such as PayPal, which are in-keeping with the quick and easy style of online shopping itself. This type of payment method simplifies the overall shopping experience for customers, as this type of payment option mean that customers no longer need to carry cash or card around with them, in order to make a quick payment – they simply need to log in, enter their password and submit.
Imagine if a customer had an online basket worth hundreds of pounds but doesn’t have their credit card details available at that moment. If they are unable to pay through a local, alternative online payment method, that sale is therefore automatically lost. It’s key to remember that if the payment options are limited, then so are the potential sales opportunities.