Checkout Conversion

NEW REPORT: Merchants Up Their Digital Checkout Game In The Age Of Amazon

Consumer spending hit a record $880 billion in Q4 2019, thanks to online sales making up 15 percent of total expenditure — higher than ever recorded — and smooth eCommerce checkouts.

Retailers that sell products and services online have been slowly, but steadily, removing payment frictions from their online checkout processes for the past year, smoothing those processes and improving user experience to boost conversion rates. They have done so primarily by adding checkout features, such as free shipping and guarantee or refund policies that save shoppers time, effort and cash. PYMNTS research shows that among the 14 checkout features that impact merchants’ conversion rates, nine of them were offered by more retailers in Q4 than in Q1 2019.

Some of these features have become so common that they are often taken for granted. For example, free shipping has been the industry standard since Amazon Prime debuted in 2005, while features like live-site help, automatic payment form-fill functions and guarantee or refund policies are all offered by more than half of the web’s leading retailers.

With so many checkout features becoming standardized, merchants everywhere are feeling the pressure to find new, unique ways to grab consumers’ attention. Yet, which checkout features can they rely on to convert browsers to buyers?

The answer is not what it used to be. PYMNTS has been studying the online checkout feature offerings of leading retailers in its Checkout Conversion Index series since 2015. The eCommerce market has changed drastically in that time, as online checkout features have fallen in and out of fashion, while others have become even more ingrained in consumers’ collective expectations. The research assesses how much of an impact these features have on overall conversion rates, and assigns a unique checkout conversion index (CCI) score to each merchant, based on which features they offer.

The Q4 2019 Checkout Conversion Index analyzes data on 667 leading web merchants to assess which features will pack the punch that retailers need to convert casual buyers to paying customers in 2020 and beyond.

According to the research, catching consumers’ attention in Q4 2019 was all about bonus features — not the ones consumers expected, but the ones they didn’t know they wanted. Merchants with the highest conversion rates offered many of the same features this quarter, from digital wallet acceptance to rewards programs, to optional profiles.

In fact, every one of the 30 merchants with the highest index scores allowed their customers to create optional profiles on their sites, while 96.7 percent accepted digital wallet payments. The same portion (96.7 percent) provided guarantee or refund policies. These same checkout features were only supported by 20 percent, 26.7 percent and 0 percent of the merchants with the lowest scores, respectively.

However, eCommerce consumers’ shopping preferences and checkout expectations are even more complex than these numbers might seem, changing not only according to the fiscal quarter, but according to the type of product or service they are purchasing.

To learn more about how eCommerce checkout trends and consumer preferences have evolved across time and sectors, download the report.

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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