Boosting conversions is vital for any ecommerce business, but before improvements can be made it is important to understand when and why drop-offs occur. Our latest study, conducted with IMRG, investigated exactly this, to help online retailers optimise the checkout process, and thereby improve the customer journey. We have published the results in a report, 'eCommerce Checkouts: UK Retailers Reveal Their Checkout Strategy and Performance'.
Insights in the report were gathered directly from IMRG’s diverse retail community, from varying product categories, market tiers, and retail types. Available to download from IMRG, the report provides actionable advice that can help payments professionals enhance their customers' purchasing journey, reduce basket abandonment, and boost conversion.
The report found that the average conversion rate is just 58%, leaving plenty of room for improvement. And it was interesting to see the difference between multi-page and single-page checkouts, where average conversion rates sit at 56% and 61%, respectively. Simplicity and efficiency are key, but what are the main friction points merchants need to address to get more conversions?
Analysing the difference between Guests and Registered shoppers identifies a specific area for improvement. Average conversions for registered customers (who are likely to have shipping and payments details stored and pre-filled) is 64% for those businesses involved in the study. In contrast, conversions for guest shoppers – who are required to input all their personal and payment details – lags behind at 52%.
Prefilling customer data through payment wallets or express checkout options could go a long way to reducing cart abandonment.
Our study found that, on average, checkout abandonment occurs at nearly 90% of the typical length of time it takes to complete a payment. When a customer has taken time to input their data and abandons the purchase at such a late stage, there is clearly a significant barrier that must be addressed.
Focus must be placed on improving the payment experience itself, if conversions are to increase. One simple but effective change is to add tools like ‘try again’, which can save consumers from restarting the checkout journey in the event of a declined transaction – from our experience with Ecommpay clients, we know that this increases conversion from 2% to 4%.
Providing a range of payment options is high on the list of priorities for ecommerce businesses looking to improve conversions. However, it can add complexity and support resource requirements from the businesses themselves. Credit and debit cards remain the most common payment method, but only account for half of all ecommerce revenue for the businesses surveyed. The other 50% of revenue is split across a range of alternative payment methods including Buy Now, Pay Later (BNPL) solutions and e-wallets.
Many businesses also offer express checkout options to help simplify the payment process. Breaking down conversions based on the number of express checkout options provided shows that the wider range of options available, the greater the conversion rate. Merchants not offering express checkout report 52% conversions, increasing steadily with the addition of each express option, reaching 67% for those providing access to four express checkout options.
Half of merchants who sell internationally provide localised payment options for customers based overseas, which could be having a significant impact on cross-border conversions. Based on feedback from our clients, we know that a dynamic checkout that presents relevant payment methods based on where the customer is located can improve conversion rates, while currency choice boosts conversion and approval.
Adding a wider range of payment and express checkout options to the customer journey does not have to increase resource requirement or website complexity for the merchant. If onboarding, integration, and account management for every payment method, currency, and express checkout solution was managed in-house by the retailer, it would be unsustainable for many. Working with payment service providers (PSPs) will take away some of the pressure. However, the biggest difference comes when working with a PSP that offers a full-stack solution and dynamic checkout to optimise choice and flow of multiple payment methods.
If one provider can deliver a range of solutions via a single integration, it removes the need for a multitude of partnerships. Open Banking, subscriptions, payment orchestration, global payments, express checkout, and alternative payment methods can all be offered via one partnership, one integration, one account to manage. This also provides the ecommerce business with the capability to scale globally with access to a huge range of payment methods, whilst also benefiting from increased authorisation rates and drastically decreased transaction costs.
Chief Revenue Officer, Moshe Winegarten joined Ecommpay in 2022 to scale the company’s robust and innovative products. A global payments expert with extensive experience in fintech across consumer and commercial banking and payments, Moshe’s roles have spanned strategy, product, sales, business development, and customer engagement and management. An established thought leader within fintech, Moshe has authored several papers, as well as spoken at numerous events around the world, promoting fintech and payments innovation.
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