Hey retailers, does your heart belong to mobile?
It better. It’s going to be a $20 billion holiday this year (not to mention the roughly $703 million spent by pet owners last Valentine’s Day).
And at least 17 percent of that is estimated be done via mobile devices.
To gain a sense of how ready merchants are for the first shopping holiday to follow a somewhat disappointing Christmas 2015, MPD CEO Karen Webster spoke with BlueSnap CEO Ralph Dangelmaier about one of the industry’s all-time hot button topics: checkout conversion and what it has the potential to cost retailers.
Which can be as much as 42 percent of their sales, depending on the type of merchant and just how much friction there is.
“We’ve done a bunch of work together to show that there is a big problem called checkout abandonment. Especially on mobile,” Dangelmaier said. “Three out of 10 people buying Valentine’s gifts [this year] will do it on their mobile phone. But what we found is that almost 80 percent of merchants are not optimized for checkout on their phone. And that’s going to create abandonment problems.”
Which begs the next question: “So how do you get optimized?”
For one, Dangelmaier says that it starts by delivering the same type of experiences consumers are encountering while shopping online using a computer. At the moment, however, there are too many fields to fill out, and the text is too hard to read, among other things, Dangelmaier says.
Merchants haven’t put enough weight into mobile and its impact on converting shoppers into buyers and completing purchases at checkout.
And then there’s the notion of discounts and coupons – especially pervasive around Valentine’s Day as retailers look to score lots of sales. BlueSnap’s Checkout Conversion Index indicates that 10 percent of shoppers will abandon their carts if they don’t have — or can’t easily find — a coupon to apply at checkout.
Yet somehow, what BlueSnap and Dangelmaier are seeing is that a lot of merchants haven’t built platforms that can easily execute coupon codes.
“It’s hard for consumers to get them, it’s hard for them to enter those codes. Many merchants have been taking advantage of that,” he emphasized. “It is something consumers are really looking for.”
Outside of the traditional retailers, there’s another subset of merchants that are also likely looking to cash in on the upcoming holiday: subscription dating sites. While it sounds like integrating online payment options into mobile apps/devices would be more complicated for the sector, Dangelmaier says that’s certainly not the case.
But it is for merchants that haven’t kept up to speed with what consumers are demanding.
“It’s not that complicated for anyone to offer subscriptions. But a lot of merchants don’t have the capability to do that with their current platforms. We know that [15-20 percent] people — especially on dating sites — want to try it. A subscription is a really nice vehicle to try something before they buy.”
Just like investing in making their sites mobile-optimized, Dangelmaier says that merchants should be doing the same when it comes to offering subscription services.
What the PYMNTS Checkout Conversion Index research, done in collaboration with BlueSnap,has concluded is that despite the ease of connected devices influencing how, where and why consumers pay a certain way, there are still plenty of merchants left behind. And despite the estimates for eCommerce growth, consumers continue to abandon their virtual carts at alarmingly high rates, because so many of them are transacting — or would like to — on mobile devices.
Checkout conversion, especially on mobile devices, is a huge problem that needs to be addressed – well, that is if merchants want to cash in on their fair share of the roughly $147 billion lost due to friction in the checkout process. When nearly 40 percent of online sales simply won’t go through — in many cases, without merchants even realizing it – merchants lose out. Whether that is because of friction in the checkout process, consumer confidence in a merchant or how merchants handle payment declines, the result is the same: a lost sales opportunity – and maybe forever.
But it doesn’t have to be that way – if retailers ♥ their checkout process and optimize it for mobile.