The Checkout Chasm

Customers have seen significant innovation and improvement in their experience to add items to a shopping cart and completing purchases. However, there’s a glaring oversight at the crucial juncture where these two experiences intersect – the checkout screen. The retail industry persists in embracing a one-size-fits-all approach, neglecting the customer’s needs at this pivotal moment.

This oversight is starkly evident in the staggering statistic that 70% of customers abandon their purchases after loading up their carts, citing a lack of personalisation and over-complication in the checkout process. It’s a clear symptom of the industry’s blind spot.

This issue will persist as long as payments are viewed merely as a cost centre, with a focus on cost reduction rather than a strategic emphasis on enhancing the customer experience and, consequently, boosting revenue. It’s time for a paradigm shift in priorities – making the checkout page as personalised to the customer as their music playlists.

Abandonment

While attracting customers is crucial, retaining them during checkout is equally important. Based on Baymard Institute Studies 70% of online shoppers abandon carts, often due to checkout complexity. Customers expect a seamless payment experience, yet they are faced with multiple forms of unclear instructions. This problem goes beyond just inconvenience, it directly impacts businesses sales performance and customer satisfaction. Additionally, addressing cart abandonment isn’t just about reducing losses; its about maximising the potential for revenue growth. Studies by Baymard suggest that optimising the checkout process can lead to a significant increase in conversion rates, potentially boosting sales up by 35.2%.

There are several other common issues contributing to cart abandonment. Unexpected costs, such as shipping fees or additional taxes, often catch customers off guard, and 48% rethink their purchase decisions. Furthermore, online consumers have concerns about payment security, and many choose to abandon their carts of fear of having personal and financial information exposed.

When it comes to international transactions, the importance of seamless payments cannot be overstated. The complexities of currency conversions, varying payment methods and cross-border regulations add another layer of difficulty to the checkout process. If businesses address these issues it will minimise cart abandonment rates and maximise their global sales potential.

Personalisation

Customers associate personalisation with positive experiences of being made to feel special; according to McKinsey that means for a company to recognise them as individuals and to know their interests. This can help businesses foster deeper connections with their audience and encourage them to complete their purchases.

Businesses must align their strategies with consumer expectations and industry trends. Global consumers have clear preferences when it comes to online shopping experiences. According to PayPal, a staggering 58% of global consumers express the need for detailed product information, highlighting the importance of transparency and clarity in product listings. Furthermore, 50% of consumers emphasise the importance of promotions and offers in influencing purchase behavior.

Integrating local payment methods is crucial in building trust and convenience for customers, particularly in International markets. By offering familiar and preferred payment options, such as digital wallets, credit/debit cards, and bank transfers, businesses can deliver diverse consumer preferences and reduce concerns about payment security. Adopting a one-size-fits-all approach for each country or market ensures that payment methods are tailored to local preferences, further enhancing conversion rates and reducing cart abandonment.

Existing Solutions

Looking at available offerings in the market, highlights the point that there is limited practical solutions provided to solve these issues. Some of the existing attempts to improve the checkout experience are:

• One-click checkout
• Automating real-time triggering emails & push notifications
• Offering multiple payment methods

Unfortunately, even after being available in the market for a few years, the solutions above have had limited impact. They still take a one-size-fits-all stance, failing to customise the user experience and missing customised changes based on geographical differences.

Where two Worlds meet: customer acquisition and checkout conversion 

Efficient checkout processes, offering personalised experiences, and integrating local payment methods have been proven to show significant results in reducing cart abandonment rates and improving overall conversion rates. Businesses that prioritise these strategies stand to gain a competitive advantage in the crowded e-commerce industry while building long-term relationships with their customers.

At FERO we deliver distinct checkout experiences to each individual shopper based on who they are. We recognise past behaviors and streamline the checkout process. This can reduce checkout time by as much as 50%, leading to more efficient shopping experiences. We combine personality attributes such as demographic, behavioural, psychographic, and geographic data with the experience we have in the purchasing process and the value/need of the items in the basket. The integration of the two worlds is what makes us different.

We emphasise on the often overlooked layer between customers initiating the checkout process and actually completing their purchases. Through our comprehensive dashboard, we provide our customers with insights that highlight the underlying causes influencing authorisation and conversion rates. It provides insights as to the reasons behind cart abandonments, whether due to issues like missing preferred payment method or expensive shipping costs and suggesting what actions to take, enabling companies to address these obstacles effectively. Our customers are therefore better equipped to understand their consumers, how they behave when purchasing, and the best way to personalise their offerings. Its completely customised based on the interest of each customer, guaranteeing the best change of completing the purchasing journey.

Navigating the complexities of checkout optimisation requires not just the right technology but also the right expertise. We are a team of Data Scientists and Payment Geeks. FERO’s personalised checkout revolution is not just about convenience; it’s about building trust, fostering loyalty, and creating a frictionless online shopping ecosystem.

Sources: FinancesOnline, Baymard, PayPal, Scoop, McKinsey, Bolt, Primer, Paddle, Dynamic Yield, Stripe, Paddle