Is your checkout designed to sell?
By Paul Bridgewater, [email protected]
Consumers remain skittish. Despite recent positive economic signs, the latest Gallup U.S. consumer spending report shows that routine daily expenditures at restaurants, gas stations and online stores are still down from their 2008 highs, falling to $58 per day in January 2011, versus $97 for the same month three years earlier.
What does this mean for online retailers? You need to work smarter and harder to structure your online environment to not only compete for business but maximize sales. And one of the most underrated components in your online arsenal is your payments program. A well-executed payments strategy can turn what is traditionally seen as a cost center into a revenue driver. But to do so, you need to understand your customer better than ever before and mindfully manage your customer’s payment experience.
So where do you start? The answer? At a place often overlooked from a marketing perspective – your e-commerce payment program, especially your checkout process. Without the right configuration, payment options and purchase best practices in your checkout, you risk frustrating your shopper and increasing the possibility of purchase abandonment. Research shows, for example, that 30% of all shoppers abandon their purchases due to confusing and overcrowded checkout pages, which can be further impacted when their chosen and trusted payment options are unavailable. Mind you, these are shoppers who are willing and ready to buy. Imagine what you could add to your bottom line if you optimized your purchase process and captured even half of those shoppers.
One of the key checkout principles to live by is to “keep it simple.” Bear in mind, during the checkout process your customer is no longer shopping. Don’t clutter the process with up-sells, bundles, pop-ups and redirects – make the journey to the “buy” button as short, smooth and clean as possible.
To optimize your checkout flow, it works best to use a combination of common sense, best practices and metric-based testing. A/B testing is good for broad, sweeping changes; multivariate testing (MVT) is more appropriate where you’re seeking to identify trends among various consumer segments or when granular insights are important. Dynamic personalization allows you to leverage your MVT learnings by creating targeted promotions or customized experiences for specific traffic segments.
You can apply the same “keep it simple” strategy to your payment options. When considering what payment options to include in your checkout, a maximum of four payment options is recommended. Your decision on which options to include should take into account:
- Your product: What are you selling? Is it a digital or physical product? How is it going to be fulfilled? Downloaded digital products, for example, will not benefit from a delayed payment method.
- Your price point: Price points affect the payment methods shoppers will use. No one wants to pay for a $5 item with an American Express card or wire transfer.
- Geography: Consider where your consumer is located and offer the preferred payment options that are available to them in that region. In Brazil, a consumer is likely to use Boleto Bancario to complete a purchase versus a credit card; a Japanese shopper, by contrast, will use Kombini, which requires them to take a bar code on the “Thank You” page to their local 7-Eleven convenience store and pay Yen over the counter.
- Your consumer demographic: Make sure you are offering relevant payment options for the demographic you are selling to. For example, teenage and twenty-something shoppers are more likely to use PayPal than older customers who prefer credit cards.
When you are strategizing about what payment options to offer at checkout, you need to take into consideration that in today’s global e-marketplace, credit cards alone are no longer enough – especially if you want to be successful selling internationally. Today’s global merchant must think in broader terms. The Asia-Pacific region favors alternative payment options, which are often only relevant and useable in their domestic countries versus more internationally accepted and recognized brands such as PayPal and bank transfers. Cash on delivery is popular in China and India. Many Europeans use online banking as a form of transferring payments (most bank transfers require re-directing the consumer during checkout – a process Europeans are comfortable with, but Americans will often resist). When you plan ahead and optimize for cross border traffic, the end result is broader global reach, better conversion rates and lower cart abandonment.
So how does your checkout process stack up against these payments program essentials? Is it designed to sell – is it leading your customers to the buy button or to abandon the sale? Some simple, but mindful, changes can have a major impact to your bottom line.
Paul Bridgewater is VP of world payments for Digital River (www.digitalriver.com), a leading provider of global e-commerce solutions that builds and manages online businesses for software and game publishers, consumer electronics manufacturers, distributors, online retailers and affiliates. He can be reached at [email protected].
Report: Target’s Valley Stream, N.Y., store to vote on union
New York City — Target Corp. and United Food and Commercial Workers Local 1500 have settled a dispute regarding which workers may cast ballots in a union election at the retailer’s Valley Stream, N.Y., store, paving the way for the National Labor Relations Board to schedule the vote, Crain’s New York reported.
The election next month will apparently be the first at a Target store since 1990, when a union drive failed at a Detroit store.
The election is part of a larger campaign by the 23,000-member Local 1500 to organize workers at 27 New York-area Target stores, including all 10 in the city, the report said.
Balancing clutter, esthetics and customer flow
By Bill Vetter
As noted in a recent NY Times article, “Stuff Piled in the Aisle? It’s There to Get You to Spend More,” a post recessionary trend to add clutter is being adopted by many major retail outlets. Dollar General has made its shelves taller and Wal-Mart has placed pallets of merchandise in the center of its aisles advertising deals to create a sense of immediate value and bargains that just can’t be missed. As the pendulum swings from sterile, clean and clear aisles to a more cluttered ‘check out this deal’ look there is an important need to balance clutter, esthetics and customer flow when maximizing every inch of saleable space.
Clutter needs to be defined in terms of what is proven to work well in a retail outlet. If you can’t easily maneuver your shopping cart or you are climbing shelves to get to items piled high, or your checkout lanes are poorly defined and littered with random sales items then “clutter” is working against you. In a recent study, two thirds of customers polled said they are less likely to shop in a retail environment if they have challenges with their shopping experience. But if clutter is defined as a busy environment, presenting convincing product opportunities while offering genuine sales value (still keeping in mind store maneuverability and customer flow) then clutter can go a long way in creating customer loyalty.
To produce the right kind of environment that keeps clutter, esthetics and customer flow in harmony, you must keep in mind the objective of your store layout, the experience you wish to create and how you want to merchandise that experience. Coupled with good retail navigation and transaction design, you can increase customer satisfaction and browsing time while improving sales. Consider the following simple and cost effective revamping suggestions that not only help you to promote genuine values, but also to help your customers see items in more visually appealing ways, allowing them to maneuver both efficiently and safely – and even entertain and inform your customers:
- If you have empty wall space consider using merchandising accessories like baskets, bowls, shelves, hooks and prongs to organize, categorize and display items. Use clever signage to attract and direct customer flow — empty wall and even window space can be used to draw attention to items, build brand profiles and help customers navigate their shopping course along the path you would like them to take to get to a hot ticket item.
- Increasing the height of your shelves or leveraging “air space” is another way to add merchandising space but make sure this isn’t going to create problems – where customers have to rely on staff assistance or will endanger themselves trying to get to merchandise.
- Consider installing in-queue merchandising panels to better define your checkout and express lanes? This is a great way to offer the newest and best branded impulse items that people can grab and go without holding up the line.
- Create an environment that informs and entertains your customers. By using media panels, digital state of the art advertising platforms, these products provide an advanced way to accelerate queues, reduce wait times and generate marketing value.
No one likes to wait on lines, but if you can occupy your customers by creating the right kind of consumer centric atmosphere, a retail outlet enriched with 1) indisputable value and 2) easily accessible items and 3) a maneuverable layout designed to expedite customer flow — is poised to capture the loyalty of shoppers who are just starting to regain consumer confidence.
Bill Vetter is general manager of Lawrence, a Tensator Group Company. Lawrence/Tensator customer guidance experts are helping hundreds of retailers create value using proven merchandising formulas, customer flow and queue management techniques and solutions that maximize every inch of existing floor, air and checkout area space, while ensuring shopper safety and pleasing esthetics.