Retail

Shopify: Online’s Biggest Liability Is A Friction-Filled Checkout

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After two decades of online commerce, Mohammad Hashemi, General Manager of Financial Services at Shopify told Karen Webster, online checkout shouldn’t be a friction-filled mess anymore. So they’re fighting the problem, a host of online checking solutions, including Shopify Pay – and an eye toward resetting merchant’s data outlook.

Losing out is always a bitter pill to swallow, but the worst defeats are the ones that are seemingly snatched from the very jaws of victory. The Bill Buckner between-the-legs-bauble, the Aaron Boone Green Monster killer, the David Tyree helmet catch – the moments when fate intervenes in the form of a small bad choice cascading out of control. The unforced errors that take wins that looked like sure things and nudge them ever so slightly – but permanently – out of reach.

Aside from Boston’s oddly Shakespearean sports history, in an example drawn from retail, there is the checkout page failure that leverages an alchemy of bad decision-making to take an attempted conversion and turn it into an abandoned cart.

The problem, Mohammad Hashemi, general manager of financial services at Shopify, told Karen Webster in a recent conversation, is that the checkout experience “is a weird three-page mess that really hasn’t evolved over the now almost three decades people have been shopping online.”

Granted, the UX has gotten a bit nicer, and some streamlining efforts have been baked in, but at its base, Hashemi noted that it’s the same bad experience: The customer has to enter their shipping data, billing data and card information “over and over again, and multiple properties.”

“This is a checkout process that just desperately needs to go away,” Hashemi stated.

It’s something that Shopify can see happening anecdotally, at retailers of all sizes, as its merchant base exceeds 600,000 these days.

It’s also visible by the numbers in gathered in the PYMNTS Checkout Conversion Index: Consumers want to convert – right up until the moment they hit a friction-filled checkout process, at which point they either bail on the purchase entirely, or head to higher (more one-click-enabled) ground on Amazon.

But getting it to go away – desirable though it may be – has been a two-decade process that is just now really picking up speed, as the offerings to streamline the process are getting better and merchants are resetting their views on data collection.

Partnering for Better Checkout Tools

As of this week, Shopify had announced that it is rolling out Google Pay to all of its merchants, something Hashemi described as an “interesting partnership in a two-sided ecosystem” where both platforms can bring each other something critical.

“If they can bring the buyers, we can certainly bring the merchants,” Hashemi noted.

More broadly, he added, the decision to bring in Google Pay was a natural extension of Shopify’s decision to bring in other alt pays, such as PayPal and Apple Pay – and it’s an opportunity to enable merchants of all sizes to expand their reach to an ever-broadening set of consumers.

“When it comes to Google, younger demographics especially know and trust their brand – and they have a lot of access to the most important retail hardware these days: the phone. And a lot of cool things, like the autofill capacity for forms across devices that removes a lot of friction.”

And, he noted, allows Google to offer hundreds of millions of shoppers access to an accelerated checkout.

But, while the Google pair-up this week expands their offering, Shopify has already spent the last year building their own one-click checkout solution for merchants – Shopify Pay – to ensure that click-and-go accelerated checkout can be available to any consumers who want to frequent Shopify merchants.

Shopify Pay

Most consumers, Hashemi noted, have never noticed Shopify Pay, because it is not a heavily branded buy button that sits on site and beckons to consumers.

Instead, he told Webster, the payment product is designed for customers who Shopify “sees” on their sites over and over again, offering a “checkbox option” to store their necessary data for repeat purchases. If the consumer approves, the Shopify Pay function sits in the background; it doesn’t surface as a buy button on the screen, but “recognizes” the buyer from their previous purchases.

“We send a quick box up so the consumer can confirm their information and then complete the purchase,” Hashemi told Webster. There are no additional forms or friction, much to the majority of consumers’ preference.

“We’ve had this product out for about a year,” he noted. “Most buyers are happy with the elegance of the experience and don’t actually ask much about the magic behind it.”

Building a Better Buy Future

Because ultimately, although the consumer expects the magic in the payment, Hashemi told Webster, it’s not what brought them there.

The customer is there to buy a product – and the goal is to make that easier for them, not harder.

Historically, he stated, merchants have been slow to embrace that – partially because they have been limited by legacy technology that pushes checkout conversions through a very inefficient funnel.

But partially, he added, this is also about a reflex instinct to be territorial about data – and a feeling that they need to personally gather and protect every scrap of information a customer is willing to offer.

That instinct, Hashemi pointed out, is not entirely off-base. Merchants need to have some level of access to proprietary data, so they can leverage it to build a lasting relationship with their consumers. So the desire for data makes sense – but in order for merchants to build the proper access channels to their customers, it has to be the right level of ownership over the right data.

Because equally crucial to merchants is “whatever helps them sell more,” and trying to over-collect data in a checkout process, Hashemi told Webster, just fundamentally undercuts that primary goal.

“We’re not quite where all merchants are thinking about how to make correction decisions on the tradeoff between the right and wrong time to attempt data collection,” he said. “But I think retailers are increasingly aware that buyer expectations are continuously increasing – and that one-click buying experiences are how consumers expect to make their purchases when they shop anywhere.”

The long-term vision, he noted, is for a more unified online checkout process that isn’t incumbent on customers constantly switching between various proprietary checkout methods.

It probably won’t ever be entirely universal, he noted. “There have been many very successful businesses built around the strategic advantage of having a proprietary checkout experience – and a lot of firms have business models set around controlling that checkout flow.”

But it doesn’t need to be universal, he pointed out, so much as it needs to be predictable, secure and – most importantly – smooth, so that the future of digital checkouts is as an asset to merchants instead of a giant liability.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

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