Checkout Conversion

Merchants Hop Aboard The Mobile (Optimized) Train For Conversion Success

When it comes to checkout conversion, apparently, there’s no middle ground. The hot-off-the-presses Q4 2016 Checkout Conversion Index™ reveals that there’s no average for online retailers — merchants are either superstars or below-average performers. PYMNTS.com research reveals that the top merchants check out customers 25 percent faster than the typical vendor, and they’re getting faster. Find that, plus more insights and an interview with Andy Barker, senior director of strategy and growth at Magento Commerce, inside the Index.

Keeping hands off a mobile phone, it appears, is no easy feat. American consumers check their phones nearly 46 times — or, collectively, 8 billion times — a day, a Deloitte study found last year.

And merchants are no different. They’re spending as much time trying to get consumers’ attention on their mobile screens.

In the fourth quarter of 2016, over 93 percent of mid- to large-sized merchants and over 84 percent of small to mid-sized merchants offered a mobile-optimized eCommerce experience to their customers, according to the latest PYMNTS Checkout Conversion Index™ research.

The trend is only getting stronger, said Andy Barker, senior director of strategy and growth global payments at Magento Commerce. PYMNTS caught up with Barker to get his perspective on 2016’s hits and misses and how he is seeing merchants preparing for 2017.

The big mobile optimization opportunity

With more consumers increasingly spending extra time on their mobile devices and merchants stepping up their game, it is predicted that, by 2017, total mobile commerce will account for 50 percent of U.S. digital commerce revenue, research and advisory firm Gartner reported — an opportunity that merchants are rushing to capture.

“Merchants are spending a lot of time looking at mobile optimization of their checkout flows because it’s been a recurring theme that more and more of their traffic is originating from mobile devices,” Barker said.

While consumers aren’t necessarily making a majority of their purchases via their mobile devices, they are overwhelmingly using it do their research, be it for buying products online or in-store.

This trend was widely visible in the 2016 back-to-school shopping season. More than half of the parents were projected to use smartphones while shopping, whereas 61 percent said they would use them to do research before buying products in-store, according to data reported in the PYMNTS Back-to-School Report.

To make that mobile shopping experience better and, in turn, drive checkout conversion rates, merchants are seemingly going the extra mile.

“I have actually been surprised at the number of transactions that I have placed online, where they are doing a number of simple things, like popping up a number pad instead of a full keyboard when you have to enter your credit card number into a credit card field on a mobile device like either a handset or a tablet,” Barker said. “From that perspective, they are moving in the right direction.”

All that said, merchants are playing catch-up as the growth in use of mobile devices has been exponential, but ease of use of mobile-based shopping not as much, he added.

Nonetheless, mobile optimization is most certainly not where a merchant’s job ends.

“Despite the hundreds of initiatives and billions of dollars invested in mobile apps and mobile-optimized websites in order to get consumers to buy stuff on those phones, there’s still just too much friction,” said PYMNTS’ Karen Webster earlier this year.

“Friction because of regulatory or infrastructure impediments. Friction because of technology decisions and merchant inertia,” she added. “Friction because it’s just still too hard to check out on mobile devices.”

Barker agreed: “You can’t just simply make sure that you have a responsive design on your website and then [assume] everything’s going to be perfect for mobile devices.”

Providing an optimal experience includes optimizing the checkout flow to leverage payment methods that are mobile-centric, such as using PayPal’s One Touch capability, Apple Pay, Samsung Pay, as well as user capabilities and inputs that make it easier for the consumer to actually finish the checkout, he added.

Providing these capabilities becomes all the more important in the holiday season as shoppers flock to physical stores and go online to make their purchases. The National Retail Federation (NRF) projects that consumers will spend $655.8 billion this holiday season — a 3.6 percent increase over last year. A third of those of those consumers are projected to shop at merchants that provide an easy-to-use web experience or mobile site.

Consumers’ changing expectations

Another important factor that is increasingly influencing consumers’ buying decisions is the availability of free shipping. According to the NRF, 48.2 percent of shoppers this holiday season plan to shop at merchants that offer some form of shipping promotion.

That’s a factor that merchants now need to integrate into their mobile-optimized platform more than ever.

“Amazon has really trained us,” Barker said. “They have been pushing the fulfillment envelope with Amazon Prime. Everybody is pretty much expecting two-day shipping for free for everything.”

Consumers do realize that they may be paying a couple of dollars more for a product for free shipping, but they still prefer that over buying a lower-priced product and then paying a charge for shipping, he added.

And now, with the rollout of Amazon Prime Now, which delivers products in a day’s time at no extra cost to Prime members, the retail giant is training consumers to believe that they should get products as quickly as possible without having to pay for them, he said. “It’s almost becoming table stakes for free fulfillment.”

However, for average merchants, extending free shipping is not as easy as it sounds. It’s one thing to negotiate rates with merchants as Amazon and another to do it as an individual merchant, Barker said.

Other than extending shipping promotions, loyalty is fast emerging as another functionality that is key to providing a superior experience on a mobile platform.

Loyalty presents one of the biggest checkout conversion opportunities for merchants in 2017, Barker said.

“Usually, if you can combine your loyalty program seamlessly with all your shopping experiences, including your mobile application, that’s going to be important to start changing the mindset of the consumer,” he said.

However, Barker warned that extending loyalty on a mobile-optimized platform should be one of the higher-level items on a merchant’s to-do list.

Before they set out to accomplish any of that, they need to first perfect their basic mobile optimization offerings, including mobile payments, and be able to offer a seamless experience to their customers across multiple channels — a struggle, as Barker pointed out, that proved to be a big challenge for most merchants in 2016.

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About The Index

The PYMNTS Checkout Conversion Index™ provides a quarter-by-quarter look at what hurts conversion rates and creates friction in the shopping process — just how much money retailers are leaving on the table due to problems with friction and conversion and why customers are abandoning their online purchases.

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