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Ecommerce touts instantaneous buying and convenience among its many benefits, but the truth is that consumers can be fickle on the way to completing checkout.
Once their cart is full, they want to be able to choose from a multitude of payment options. They also want checkout to happen quickly. If those aren’t provided, there’s always the danger looming that a second thought or distraction will creep in, leading a cart to be left waiting.
“In today’s crowded retail landscape, there is little room for error when it comes to ensuring that purchases are not only initiated effectively but followed through until the very last step,” said Ralph Dangelmaier, CEO of BlueSnap, a payment orchestration platform. “How shoppers experience your brand is now more important than ever, because even the slightest inconvenience at checkout can result in both customer and cart abandonment.”
To avoid losing customers – and sales – before the final payment is completed, Dangelmaier said several gaps in the ecommerce experience need to be considered.
For one, the end matters. It’s worth remembering that when it comes to a sale, closing the deal is just as important as an attractive entrance. For brands and retailers, driving traffic to a site is often a primary focus. After all, more traffic means more chances for sales.
“But these efforts are effectively useless if customers are met with a confusing, faulty checkout experience,” Dangelmaier said. “If customers are making it to checkout, it’s up to the retailer to ensure the process is seamless enough that people don’t abandon their cart at the last second.”
As retailers see a few customers trickle out here and there, it may seem insignificant. But taken together, the lost sales can add up to big deficits, Dangelmaier said.
For global retailers, it’s also necessary to localize payment options to a specific area. If a customer goes to checkout and doesn’t see a payment method they regularly use, they may be more likely to abandon cart.
“By offering preferred payment methods, a range of languages and local currencies, these sales are more likely to be completed, while also resulting in higher levels of customer satisfaction,” Dangelmaier said.
It’s also important for retailers to keep up with changes in payment methods. To keep up with the pace of innovation, they should also add alternative payments, such as eWallets, buy now pay later (BNPL) and crypto.
Increasingly, the ability to access a multitude of options is part of a shopper’s expectations. According to a PYMNTS survey, 45% of shoppers said they want the ability to use their preferred payment method while shopping online.
There’s lots of talk about frictionless experiences in commerce, and making payments easy is part of that. After all, consumers want to complete their purchase in as few steps as possible. But it’s made possible by having a payment infrastructure in place, Dangelmaier said.
“A strong payment infrastructure must be able to capture, authorize, and protect each sale while providing the greatest amount of ease possible to the shopper,” Dangelmaier said. “From a brand perspective, having a durable payment infrastructure in place also aids in achieving higher authorization rates, and avoiding cross-border fees.”
Within this infrastructure, there are complex and interwoven systems working under the surface to make things simple for the customer. Having the right payment options in place is just one piece of what’s required. Brands and retailers are also growing the number of channels on which they are selling, from web and mobile to marketplaces and social media. So it’s important that all payment options are offered across each channel in order to keep them consistent, said Dangelmaier.
“In establishing this payment infrastructure, retailers must hold a strong understanding of payment orchestration, which simplifies payment processes by integrating service providers, acquirers, gateways and banks within one consolidated layer of technology,” Dangelmaier said. “In streamlining payment flow through the integration of multiple payment methods, payment orchestration provides a higher likelihood of customer satisfaction in the checkout process that directly translates to a higher degree of brand loyalty and retention.”
Payment orchestration offers access to a wide range of payment services providers, and support for cross-border sales. It also reduces the risk of declined payments and other failures by directing all transactions to the highest-performing payment processing provider.
By bringing all of the different sides of the payments equation together, retailers can present a unified experience for consumers. While there may be a lot happening behind the scenes, for the customer, this ensures checkout is quick and easy to complete. It’s a way to stand out at the end of the sale, just like retailers want as they seek to bring a customer to their site.
“Payment orchestration is key to making sure shoppers are experiencing a continuous, technologically ‘with it’ brand,” Dangelmaier said.
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Still, plans to buy big-ticket items ticked up.
Those were a couple of the words used to describe consumer confidence in May. The Conference Board reported that the index fell to a six-month low amid debt ceiling anxiety and increasing concerns about employment.
“Consumer confidence declined in May as consumers’ view of current conditions became somewhat less upbeat while their expectations remained gloomy,” said Ataman Ozyildirim, senior director of economics at the Conference Board, in a statement. “...While consumer confidence has fallen across all age and income categories over the past three months, May’s decline reflects a particularly notable worsening in the outlook among consumers over 55 years of age.”
The dip among those over 55 came as Congress negotiated a deal over increasing the debt ceiling that included talk of cuts to programs such as social security and Medicare. While officials reached an agreement over Memorial Day weekend, the Conference Board’s survey was fielded prior to that date.
The job picture appears to be more anecdotally cloudy, as the number of consumers reporting jobs as “plentiful” fell to four percentage points to 43.5%. The job market has been consistently robust for nearly three years, as unemployment remains near historic lows. In April, the economy added 253,000 jobs, which remained a positive sign despite being below the gains of prior months. The confidence reading comes ahead of fresh data from the U.S. Bureau of Labor Statistics on Friday.
Despite the declines, there were signs that consumers are not completely pulling back on big-ticket items. Plans to buy big-ticket items such as cars and appliances ticked up on a monthly basis. It’s worth watching whether this extends to providing resilience in other discretionary categories, which have seen a pullback in early 2023.
Nevertheless, the index offered another sign that the consumer mood is getting more pessimistic. It was the fourth time in five months that confidence fell. On Friday, the University of Michigan offered another with a consumer sentiment report that showed a 7% dip.
Brands and retailers must work to reach consumers that are increasingly in less of a buying mood than the month before.