Poor checkout experiences, including a lack of one-click or quick payment options, risks losing retailers vital online conversions, data shows.
With customer acquisition costs (CAC) having already risen 60% in the last five years, the accelerated demand for ecommerce during the pandemic threatens to increase CAC further, as competition on biddable marketing intensifies and more companies vie for shoppers’ attention online.
Original research of 150 of the UK’s leading retailers in parcelLab’s ‘Operations Experience 2021 – How Does UK Retail Measure Up?’ Report suggests that, while retailers invest heavily to get shoppers onto their websites and to the point of purchase, little is done to retain them – or stop them abandoning an order - once they reach the checkout; the critical moment where a conversion is either won or lost.
Almost half (44%) of UK consumers would give up on a purchase if their preferred payment option wasn’t offered at the online checkout, yet retailers are failing to offer alternative payment options. While 41% of retailers have embraced Buy Now Pay Later (BNPL) schemes, such as Klarna and Lay Buy, many still don’t provide the convenience of one-click payments that shoppers have become accustomed to using on Amazon. Just a quarter of retailers (27%) provided quick pay formats, such as Apple Pay or Google Pay, and only 10% offered Amazon Pay.
The majority of retailers do offer guest checkout, the study finds, a fifth (17%) of retailers were adding friction to the checkout experience before the shopper even reached the payment gateway, by insisting customers sign-up or register for an account to allow them to make a purchase.
Tobias Buxhoidt, Co-Founder and CEO of parcelLab, explains: “Conversion blockers at the online checkout risk undoing all the hard-won gains of getting that customer right to the point of purchase. Retailers are already paying handsomely to get a shopper to their site in the first place amidst rising competition online, so they can’t afford to fall at the last hurdle by adding friction at checkout and potentially losing a sale, right at that critical moment. By thinking about the checkout not just as a transactional process in the buying journey, but as integral to the customer experience, retailers can smooth the path to purchase and increase the likelihood of conversions and sales.”