1. Shopper & Customer

Why Retailers’ Obsession with Conversion is Keeping Them from…Converting

It’s no secret that retailers and brands have become obsessed with driving conversion in their quest to recover the more than half of shoppers who abandon checkout before completing their purchase. After all, “conversion rate optimization” is one of the more common catchphrases in today’s retail industry. But too often, in trying to reach this final destination, retailers are missing out on the proverbial journey — and that journey is usually far more lucrative than the typical take-no-prisoners, myopic approach to “conversion.”

There are a few common examples of this “take no prisoners” strategy, but one of the most egregious is stripping the checkout of any features that could possibly stand between a shopper and their final purchase. It seems like a good idea in theory — if shoppers are left alone with nothing to do but pay, that’s what they’ll do. 

Unfortunately, like many seemingly good ideas, while this approach might drive a few more completed purchases, it fails at the bigger picture metrics that these retailers actually care about: revenue and profit. That’s because neither revenue nor profit is a function of conversion alone. Instead, it’s the combination of conversion, average order value and customer lifetime value that matters.

Maximizing that combination of factors can be accomplished at checkout, as long as it’s not stripped of all its goodness.

Instead of a tunnel-visioned focus on conversion, here are three things that retailers should prioritize as they shift from obsessing over conversion alone to obsessing over every step of the checkout experience.

1. Speed is one thing—not everything.
A speedy checkout will convert shoppers — but rarely should it be the default checkout experience offered to every shopper. Shoppers’ behavior varies too much.

By knowing their customers and where they’re coming from, companies can determine when a speedy, conversion-focused checkout should be the priority — and when they should focus on maximizing customers’ cart size or lifetime value.

There’s a right time and place for a speedy checkout.

Picture, for example, a shopper waiting in the carpool line, scrolling endlessly on their phone as they wait for school to get out. When this person comes across an ad for a product that interests them — say, a backpack — getting that shopper through checkout as fast as possible is a top priority because as soon as they start moving, the sale is lost.

A shopper that’s on the hunt for a particular backpack, on the other hand, will have dedicated more time to the experience, perhaps shopping via their desktop after wrapping up their workday. This shopper will be doing what we refer to as “spearfishing,” or typing a very specific search phrase into the internet, such as ‘black backpack with 15.7-inch laptop sleeve and a water bottle holder.’

As a result, they’ll spend more time browsing and making sure that the item they’ve found is the one they want. In this scenario, speedy conversion doesn’t matter nearly as much as the opportunities to increase customers’ order size from one to three items by upselling and cross-selling during checkout.

2. No two shoppers are the same. Their checkout experiences shouldn’t be, either.
Retailers used to be blind to who their shoppers are and what they’re shopping for, but not anymore. It’s why retailers have introduced personalized experiences everywhere else on their sites — except, for some reason, checkout.

For example, marketing and advertising campaigns are tailored around a shopper’s age, gender, geographic location, shopping history and other demographics. And many retail brands store their shoppers’ individual sizes and preferences in their profiles, so they can make personalized recommendations based on what shoppers have already said they want.

Tailor checkout experiences in the same way as the rest of the ecommerce journey.

Retailers have countless data points around shoppers’ unique buying habits, their purchase and browsing history, and their preferred payment and shipping methods. They just have to put it into action at checkout.

Every checkout experience should reflect four key traits about the shopper:

  1. Who they are: Are they a first-time or repeat shopper? Member or non-member? B2B or B2C?
  2. What they’re buying: One or 10 items? High or low price?
  3. Where they’re coming from: Email? QR code? Social media? Search engine?
  4. What device they’re on: Mobile? Desktop? In-store kiosk? A sales clerk’s tablet?

3. There’s no limit to the extent that retailers can tailor their checkout experiences.
If retailers aren’t offering dozens — if not hundreds — of different, personalized versions of checkout to shoppers, they’re already falling behind.

Those that aren’t doing this type of personalization often blame it on their traditional views of checkout as either too costly, too complex, or (frequently) too scary to modify. But checkout technology has advanced, and that — combined with the readily available data around shoppers’ profiles, preferences, devices and purchase intentions — has made optimizing the checkout experience much more accessible.

And the gains are enormous. A modification as simple as having a shopper’s preferred payment method available, for example, can mean the difference between a repeat shopper, a one-time shopper and a lost sale altogether.

Once retailers start to see the power of checkout beyond simply converting shoppers, there will be no stopping them or the possibilities they pursue.


Peter Karpas is CEO of Bold Commerce, the checkout company for leading omnichannel retailers and DTC brands. He has over three decades of experience in ecommerce, payments and fintech at companies including PayPal and Intuit.

View Original Article
https://retailtouchpoints.com
Do you like Retail TouchPoints's articles? Follow on social!