How Much ‘Friction’ Costs Online Retailers

‘Tis the season to be digital.

ECommerce forecasts for all of 2015 are expected to reach $349 billion in the U.S. and $1.67 trillion globally. Analysts report that this holiday season alone, digital will drive $70 billion in sales – with roughly 14 percent of that coming strictly from mobile devices. That $11 billion, while small, represents a stunning 47 percent increase from last year – at the expense of desktop-driven shopping. Clearly, mobile is on the move this holiday season – and beyond.

But merchants know that much of this has the potential to remain in abandoned carts and incomplete checkouts. It’s frustrating when a merchant has opened their virtual storefront for business, gone to the trouble to stock it with things that a consumer might want to buy, offered great prices, yet failed to “close” the deal when it comes time for that consumer to push the “buy” button and checkout.

The PYMNTS.com Checkout Conversion IndexTM (CCI), in collaboration with BlueSnap, measures the payments conversion problems that arise when consumers encounter friction in their digital shopper experience.

WHY DO WE NEED TO MEASURE CHECKOUT CONVERSION?

• Merchants are still working their way to fully cash in on the demand exodus emerging from the ease and influence of interconnected devices. It’s a problem that costs merchants as much as 36 percent of their sales – the difference between the “average” conversion stats and what a merchant could achieve if their site was optimized for mobile checkout.

• The CCI measures what contributes to that checkout abandonment as a result of shopping at over 650 U.S.-based eCommerce sites across 14 merchant categories, representing over 70 percent  of all U.S. eCommerce spend – for both digital and physical goods.

• It identifies website elements that are most responsible for creating problems during the shopping process and, therefore, are most likely to result in cart abandonment and lost sales for a merchant.

CCI KEY FINDINGS

It’s hard to be simple

The best of the best make it quick for consumers to get from start to finish on their site. That has a lot to do with how well payments and checkout is optimized on the site. That’s hard to do but can make the difference between a lost sale and a conversion.

Digital sites lag

Digital sites don’t have a lot of the same “baggage” as physical retailers do – so they should be better at optimizing the checkout experience, right? Not so much. Offers, rewards and mobile optimization get in the way every time.

Size doesn’t matter on the Internet

Guess what? Local businesses aren’t the only SMBs doing well in retail. Online they are, too, proving to be more consistent in their performance.

Download the Checkout Conversion Index below.