Digital blind spots
While large retailers have more resources than their small merchant counterparts, that advantage has not translated to better results when it comes to converting online shoppers into buyers. And that’s especially true when customers are shopping using a mobile device.
PYMNTS’s Karen Webster, along with BlueSnap CEO Ralph Dangelmaier, recently weighed in on why big companies are struggling to convert online shoppers at checkout. There are four “blind spots” that get in the way of stronger performance from those retailers, but a lack of relevant data about the problem may be chief among them.
Here’s a sneak peek:
The data blind spot: It’s hard to fix a problem that retailers don’t know they have.
Now that’s perhaps a bit of an oversimplification, but it’s a fact that retailers don’t really know how bad their checkout experience is for the mobile shopper. And they don’t because they don’t have the right data that would allow them to pinpoint where the real frictions occur in the process once a consumer shows up at their virtual front door.
Of course, it’s not as though these larger retailers don’t have data – they do. But disparate pieces of it are available from multiple sources since large retailers also maintain multiple processor relationships. Separate systems and processors handle a retailer’s mobile apps, mobile browsers and the web – and each come with their own set of reports. For a large retailer, those reports are lengthy and often confusing. Getting a consolidated view of their customers across all of those acquiring relationships to really understand how they are performing is time-consuming, if it’s done at all.
But if the checkout conversion process isn’t monitored with the same diligence as many of the marketing components of their site are, merchants aren’t well equipped to understand the root cause of abandonment at the moment of truth: checkout.
The result is an executive team that intuitively knows that they could do better at converting shoppers to buyers, but lacks the right data to make the right decisions that would improve it.
The drum and the strum of checkout conversion
Let’s call it good news, bad news.
2016 is supposed to bring in more than $2.05 trillion from shoppers around globe, including $399 billion from shoppers in the U.S. alone. But merchants are also likely to lose out on the chance to sell even more – $162 billion to be exact.
The Checkout Conversion Index™, a PYMNTS and BlueSnap collaboration, reveals what’s causing consumers to abandon their virtual shopping carts at an alarmingly high rate. The situation can be costly for merchants – as much 40.7 percent of their sales, which means that a typical merchant pulling in $5 million in annual revenue may be losing out on more than $3 million.
The Q2 Index dives into what is actually keeping online retailers from turning shoppers into paying customers, and what merchants can do to convert those missed sales.
Key takeaways from the Checkout Conversion Index™ for the second quarter of 2016 include:
- Things are improving. There was a significant increase in the number of companies receiving top marks of A and B. 10 companies received an A, a 150 percent increase compared to Q1 2016. Additionally, more than 30 sites that received failing grades last quarter are now passing, and another 29 companies that received Ds in Q1 improved their scores this quarter.
- Average checkout times were 22 seconds faster for all merchants than the previous quarter. The top 30 retailers had an average online checkout time of 146 seconds, which is nearly 30 percent faster than average, while average online checkout time for the biggest retailers was 197 seconds, which is 41 seconds slower than the smallest merchants.
- Mass Merchants are on the rise. The industry saw a significant increase in this edition of the Index, moving from the seventh ranked industry out of the 14 profiled, to the top spot.
The PYMNTS and BlueSnap 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 are retailers leaving on the table due to problems with friction and conversion, and why customers are abandoning their online purchases.
In order to so, we first looked to existing research to see what consumers reported as important in driving their shopping behavior online. Our team shopped over 650 online retail sites, keeping track of whether or not particular websites did (or didn’t) contain some key design features. Analysts also applied perspective on just how easy or difficult it was to finishing their shopping process, and collected data on payment processing, finally using statistical techniques to analyze which factors caused the most friction and purchase abandonment.
About the Index
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. The CCI is based on a team of “shoppers” shopping at over 650 U.S.-based eCommerce sites across 14 merchant categories. We identified more than 55 attributes and used them to score merchants on how easy (or hard) going from discovery to final payment was on their site.