The year 2020 meant big changes for retailers that had primarily defined themselves by physical interaction as brick-and-mortar merchants were forced to adapt to an eCommerce-focused world as their best option for holding on to their now homebound customer base. That digital dive was difficult for many sellers and gave a stiff advantage in the competition to those who began the race this year already digital-enabled and ready to meet the eCommerce customer’s increasingly exacting experience requirements.
But for all the challenges thrown up by 2020, the surge of consumers online has forced merchants to raise the level of their digital checkout game, according to the latest edition of the PYMNTS Checkout Conversion Index.
The Checkout Conversion Index gauges online and mobile checkout performances of a random sample of more than 650 merchants that represented 70 percent of non-Amazon sales online in Q4, determining the features that have become crucial to driving sales. Taken across 70 indicators to measure the quality of customer experiences through checkout, a score increase reflects an improved user experience for consumers that leads to more seamless conversions. The year 2020 saw the overall index score rise by 2.2 percent for online and 1.4 percent for mobile transactions, meaning merchants have intensified their efforts to remove friction from both their online and mobile checkout processes.
So what were the winning ideas, particularly when it came to fighting the fraction at checkout? The Checkout Conversion Index offers a few critical points to keep in mind.
It’s All About Maximizing Value, Minimizing Effort
Consumers who are intent on buying, according to the index, do not take roadblocks on their path all that well — and “requirements like the need for a customer profile to be created prior to order fulfillment declined,” can do massive damage to a merchant’s relationship with a consumer.
Retailers with streamlined online ordering earned increased revenue during the pandemic, while merchants — even popular ones — unable to keep pace with audience demand and expectations did not. The expectation is now for frictionless as over 80 percent of consumers who have shifted to digital-only retail shopping are likely to continue to do so in the future. What they want primarily, according to the index, is practical utility. Consumers, according to the report, “largely ignored consumer-facing website features that were more related to branding than demonstrable end-user value.”
SMBS Outpaced Top Retailers When It Came To Innovation Adoption
According to the index, the gulf between top-performing merchants and those at the bottom when it comes to mechanisms to improve checkout was vast as of Q4 2020. Both groups saw positive impacts on Checkout Conversion Index performance influenced by added features, like free shipping and quick-add-to-cart, which were direct responses to intensifying consumer demand for frictionless shopping.
But the bottom 30 retailers experienced substantial gains on the Checkout Conversion Index (5.5 percent) compared to the top 30 merchants (0.8 percent), however. And while the index noted that rapid uptick in the smaller, less initially-digital retailers may reflect a greater willingness to absorb the opportunity cost of checkout innovation by those more pushed into a corner by the pandemic — the trend might also indicate an uptick among small and medium-sized businesses (SMBs) of the use of advanced SaaS platforms that offer “plug and play” mobile and online order fulfillment tools allowing SMBS to make big digital dives happen faster in 2020.
Transparency Is Key When Completing A Consumer Conversation
Consumers, reasonably, want to know what exactly they are buying and when exactly they can expect to receive it — which is why a conversion driven checkout process needs to be as clear as it is simple for consumers to leverage. According to the latest PYMNTS data, features like product ratings and reviews add to that feeling of transparency — and ipso facto build customer trust. Product ratings and reviews adoption rose in our Checkout Conversion Index from 79 percent to 82 percent for mobile channels in Q4 2020, with lower placed merchants benefited the most from the launch of new features, such as product reviews on mobile.
Also critical to adding clarity to the consumer perspective in 2020 were live site help offerings. This feature helps keep customers on the product or checkout page and promotes the kind of quick problem-solving that lessens the likelihood of shopping cart abandonment. It was also, according to the data, a key determinant in the high mobile and online checkout scores of top performing industries in Q4 2020: health and beauty, apparel and accessories and automotive parts and accessories.
The Classics Still Count
While there are any number of emerging new and innovative ideas on how to better leverage data to build a better, more transparent and more personalized consumer experience, the Checkout Conversation Index also indicates that one should never underestimate the power of an old favorite.
An old favorite like free shipping, for example. Rolled into something of a standard by Amazon with its Prime program over a decade ago, it still packs a surprising among of power when it comes to consumer conversion decisions. According to the data, consumers download mobile apps from retailers who offer free shipping twice as frequently as those that do not. Free shipping is a common feature for the top 30 companies on our Checkout Conversion Index as well as for the top three industries ranked by online performance: health and beauty, apparel and accessories and automotive parts and accessories. Bottom 30 retailers frequently began their efforts to create better customer experiences by offering free shipping, with nearly half (47 percent) of bottom 30 retailers offered free shipping in Q4 2020 compared to 30 percent in Q4 2019.
Speed’s Not Quite Everything
The natural assumption perhaps is the fastest checkout experience is necessarily the most friction-free and therefore the best when it comes to keep those conversions coming — but actually PYMNTS data offers a bit of a caveat on that assumption, because checkout time, according to the Checkout Conversion Index, is going up.
According to the latest data, consumers spent an average of 144.2 seconds before conversion online in Q4 2019 and 147.9 seconds in Q4 2020. Mobile shoppers spent 134.8 seconds in Q4 2019 versus 137.9 seconds in Q4 2020 before finishing their purchases.
Those upticks follow on with a small uptick in the number of clicks required to checkout. But a bit slower may not always be more friction — in light of the buy now, pay later (BNPL) plan boom during the 2020 holiday season, with basket sizes increasing by as much as 30 percent for one platform. These payment options at checkout make it easier for consumers to buy more and encourage longer browsing times — even if they are slightly longer than other processes. But, as the study also demonstrates, speed along is not enough — what the consumer wants is simplest speediest, but also bearing the maximum amount of value.