CurexeConversion Rate Optimization Fintech eCommerce Payments
By: Chris Bourgeois and Erich Ko
It's no secret that online shopping is growing and eCommerce merchants want to position themselves to capture more online sales.
According to market research by Statista, the eCommerce market netted just over 3.2 trillion dollars in online payments last year in 2017 with projections to nearly double by 2020.1
Fig.1 - Denotes global retail recap and projections through 2022.1
Considering that 60% of Carts are recoverable through recovery tactics according to Business Insider, it's imperative that eCommerce store owners do everything they can to recover their abandoned checkouts.
What we found out in our research is that there are two things to consider when increasing eCommerce sales and minimizing cart abandonment rate.
1. Understand online shopping behavior of your audience
2. Actionable tactics to implement to increase conversions.
What do we know about online shopper behavior?
1. Mobile is where customers spend most of their time browsing your site, but it is not their primary purchasing device.
There were 1.771 billion people shopping online last year. Approximately 42.0% of those users browse and interact with our brands through smartphones. That number is set to jump to 52.0% by 2022 according to reports by Statista.2
In 2017, evidence showed that rates were still significantly lower for mobile shoppers.
Android and iOs mobile platforms showed conversion rates of 1.39% and 1.94% respectively.3 All the while the desktop softwares like Windows and Macintosh held stronger at conversion rates of 3.83% and 3.46%.3
What makes customers not want to check out on mobile devices as much?
- Security Concerns of Checking Out on Mobile Devices
We already know that some people feel uncomfortable even having social media let alone inputting their payment credentials in online portals.
- Fraud and payment security concerns are high, especially with recent stories of hackers taking down large institutions.
This leaves consumers apprehensive about sharing their payment information on online platforms, they fear for the security of their personal information. According to research, even as much as 18% of Canadians don't feel comfortable about making online purchases.10
- Specific Instances of Poor User Experience
Most users have difficulty with the user experience (UX) and the user interface (UI) of eCommerce stores who do not plan their mobile experiences, leading to abandoned carts due to poor experience interacting on mobile.
Think of these instances to give you a clearer picture of how to improve UX and UI:
- Inadequate visual display of products. Users state that product photos are either too low of quality to give them an idea of how it looks or there aren't enough photos to give them enough confidence to take the next step in a purchase.
- Difficulty in moving between screens. Slow load times are among the biggest deterrents of completing online purchases. As technology advances, we all get more and more impatient. A slow loading checkout experience is a good way to frustrate your customers to drop off and never complete a purchase.
- According to Econsultancy, 29% of customers abandon their carts due to an inability to input basic information into the tiny screen frame. The reason the input fields can be so difficult to fill in is again attributed to an unplanned mobile experience.
2. They are interacting with our brands on multiple devices before checking out
Multi-Device Journeys at Checkout
According to Monetate's 2017 Q4 report, "two devices account for more than 75% of all initial and final 'touches' in multi-device journeys." 4
Luckily customers aren't typically hopping in between three or more devices when purchasing as introducing more devices typically skews our marketing data and is harder to track the purchasing journey.
To the point, multiple statistics suggest that consumers are spending most their time interacting online with a brand on mobile, and making the act of purchase on a desktop.
There isn't recent data on the exact percentages for purchases per device, but the latest we found was in Q1 of 2015 10% of purchasers used Tablet, 15% used mobile and 75% paid via desktop according to BI Intelligence.5
When compared to businesses reporting their marketing activities however, "they are failing to detect at least 25%, but possibly as many as 50%, of the sessions that are part of a multi-device journey to purchase." 4
It's a stark reality that anywhere from a quarter to half of businesses aren't able to pull these insights, as it's imperative to deliver a customized and personalized omni-channel shopping experience.
Meaning if you want to have a better grasp on your customer's data and know how they interact with your omni present channels, tracking the customer's multi-device journeys leading to your checkout is a big priority.
"While mobile and desktop are fairly similar in terms of accounting for initial touches (mobile: 40%, desktop: 37%) and final touches (mobile: 42%, desktop: 36%), it’s mobile that often keeps a multi-device purchase moving along. Consumers are using mobile as an intermediary touch (neither the first nor last) in 58% of all multi-device purchases." 4
3. Insights Regarding Loyal Customers
It takes a customer on average 3.5 shopping visits and 25 days to make their first transaction.3
While that may seem like an alarming number, eCommerce merchants must remember that it takes time to build customer loyalty. The goal is obtain repeat customers in order to build brand loyalty.
Fig.2 - Denotes the average days between purchases to build customer loyalty.3
The first factor is in examining the average number of days between making purchases.
We see a peak in time elapsed at purchase number two, but this number declines on purchases three and four which shows the slow build of customer loyalty.
If you are seeing this spike in number of days on the second purchase, do not worry. Build the relationship with your customers slowly and allow them that time to come back to you.
Fig.3 - Denotes the average number of sessions between purchases to build customer loyalty.3
The next trend denotes the number of sessions needed between purchases in order to transact.
The number of sessions increases noticeably with each purchase, but this should not be taken as a negative.
In fact, studies by Monetate show that engagement from repeat customers can grow to as much as 85% compared to first-time buyers.3 So in reality, a greater number of sessions equates to greater engagement.
This also leads to more spending. As the Average Order Value (AOV) of repeat customers is 4.5% higher than first-time customers.3
Fig.4 - Denotes the average retention rate between purchases to build customer loyalty.3
To support the above data, retention rates are known to soar with repeat purchasing. Allowing your customers to take the extra time to shop actually helps to build your relationship with them.
From the first purchase to the fourth purchase, the retention rate jumps by 38%.3
In order to build proper customer loyalty, eCommerce merchants must understand that they need to invest the time into their customers. Incentivize them the time to shop around and engage multiple times, reward them for certain behaviors like creating an account, following you on social media, spending money on higher ticket purchases, etc.
Services like Smile.io are perfect to implement into your store regardless of what platform you use to increase customer loyalty.
How to increase eCommerce Sales and have a more profitable store
1. Offer an expedited checkout option and convenient payment methods
A big reason why people drop off in checkouts is because there are too many fields of information to input.
A senior director at Magento Commerce, Andy Barker said “The majority of cart abandonment occurs during the payment phase because the process is too lengthy and complicated, which can deter customers from following through with their original purchase."6
One strategy that we've seen eCommerce merchants adopt to reduce cart abandonment is to offer a "quick checkout" option which minimizes the steps to complete the payment.
One example of implementing this strategy comes from OpenCart's One Page Checkout as seen below.
2. Reducing Chargebacks
While this is a more preventative suggestion, the consequences of mismanaging chargebacks can significantly hit your bottom line and eCommerce merchants aren't prepared for the amount of mobile payment fraud going on.
Although 83% of merchants use two or more tools to prevent mobile fraud, 60% of the merchants surveyed said they don't have a real fraud strategy in a study carried out by Kount.6
Two of the three most commonly used mobile fraud detection tools, are address verification services and CVV (card verification value) check. Although they are meant to prevent fraud, these two factors are easily obtained by criminals. Meaning those 60% of merchants didn't have any other factors, identification methods or services in place to prevent fraud.
Mobile Payments Fraud Statistics
Fig.5 - Denotes mobile payments fraud statistics from Kount.6
What can merchants do to reduce the amount of fraud?
- Offering checkout where customers can pay through the cash in their bank reduces fraud because bank logins are harder to get a hold of. This information isn't necessarily attainable and is not stolen nearly as much as credit card numbers.
- Call the customer, search the delivery address on Google Maps, check the social footprint of the customer to verify the details provided aren't fake.
- Use services like Signifyd to review and insure order
3. Remove any friction from your checkout process
Online Payments High Level Facts
- How many people use credit card at checkout? 42%7
- How many people use paypal at checkout? 39%7
- What are Paypal's Merchant fees? 2.9% + 30 cents per transaction8
What factors add friction to eCommerce checkouts?
- Visibility of key checkout elements
- Security Concerns
- Design/ UX & UI
Out of those factors, what can eCommerce merchants do to remove friction from customer checkouts?
1. Visibility of key checkout elements
- Prominently display buttons
- Have an easy to use and find shopping cart
- Clearly show total cost (with all shipping and handling included)
- Make it known throughout your site that their information is safe and secure
2. Design/ UX & UI
Make faster page load times
An option for a quick checkout (especially on mobile)
Place an autocomplete address form in the checkout
Don’t force account creation
Show progress bar
3. Make a good deal using coupon codes
About 50% of people among all age groups sampled by Statista stated the importance of coupon codes in online shopping as "very important." 9
There are a couple different ways you can use to distribute the coupon code:
- As the floating header to maximize visibility
- In an email to target specific customer segments
- On social media to promote a specific campaign
- Offered as a unique code to influencers or other brand partnerships to drive new users to your site
4. Create a sense of urgency
What are some specific use cases where I can create a sense of urgency?
- To communicate when items will be received
This becomes important especially during the holiday season knowing to order between specific times to receive the package by a certain date.
- To get customers to recover their abandoned cart (emails)
Mentioning that the cart will expire soon added that sense of urgency in this one example, but the email went the extra mile and added the live chat option too!
- To get customers understand product scarcity
With certain brands, they like to leverage the exclusivity and limited stock and display their diminishing stock to give more urgency to the shopper so they don't miss out!
- To finish the checkout
Brands with limited stock even time the checkout process to ensure that the user makes the purchase.
Places like Ticketmaster use this tactic when selling concert tickets, as these events sell out quick. The consumer understands that these business model's checkouts have urgency.
5.Trust Building: reviews, videos, and trust badges
Incentivize and Customize Reviews
Everyone knows that customers highly value reviews, here are two main tactics you can use to make your reviews convert more customers:
- Send customers an email for a compelling offer at next purchase or a free gift for writing an honest review.
- Allow customers to upload photos of the product in their reviews. This adds an extra layer of genuine trust because the shoppers see how it looks when they actually receive the item. Renttherunway.com is a great example of this.
Add Product Videos
In a similar vein to pictures with reviews, having videos in your product pages gives customers an extra lens to see the product in it's actual state.
According to an article by Neil Patel, he cited a study by Big Commerce where they found that "64-85% more likely to buy after watching a product video."
STEM Education Subscription Box Creation Crate does a great job at explaining their service in more ways than one, with video being front and center.
- Trust Badges
While it's clear that a simple trust badge isn't an earth shattering difference, adding these badges on your product pages, home page and other parts of your site builds confidence with your customers that they can trust your website. It makes a big difference to consumers however, when they are at a payment screen or about to add to cart.
6. Mobile friendliness
Optimize for Speed
According to studies done by Google, a majority of web searchers leave a page if it doesn't load in 3 seconds. Perhaps the even more shocking statistic was that the majority of websites were missing the mark by as much as 19 seconds.
The Google Webmaster Blog has already said as far back as in 2015 that they will give priority to mobile friendly sites for Search Engine Ranking Position.
How can I optimize my website for fast page load times?
First, you'll want to use a tool like GT Metrix or Google Page Speed Insights and plug in your URL to run the test.
After you get your results you'll have an idea of how fast your website is, if you aren't the most versed in development I'd highly suggest you screenshot your results and hire some talent for a project to boost your site's speed.
A couple simple things you can do to boost your score quick can be things like compressing the file size of images on your site and adding a Content Delivery Network (CDN).
Quick Checkout Option Highlighted
We already talked about the benefits of a quick checkout earlier, but this option should be highlighted on mobile.
Along with good UX and UI offering an option for a quick checkout gives customers a piece of mind thinking that the checkout process won't be too complicated on mobile.
7. Easy to access customer support
Use a service like Drift or Facebook Messenger to enable live chat
Roughly 30% of shoppers expect live chat on a merchant's website according to a study by Forrester. However, according to the same study by Forrester they found that a measly 9% of businesses are using live chat.
This is an important feature to implement as it is the preferred communication method compared to email and social media.
In a separate study by Forrester, it uncovered that "live chat leads to a 48% increase in revenue per chat hour and a 40% increase in conversion rate."
The market opportunity for eCommerce stores to capture their abandoned checkouts is massive.
By understanding consumer behavior of online shoppers and implementing tactics like improving UX and UI and boosting mobile page speed along with the others mentioned, eCommerce merchants can better capture the share of sales they are losing everyday.