The Checkout Benchmark: Data shows retailers can boost conversion with a tailored checkout
Founder and Managing Director at Leading Lights, Rick Kenney, recently hosted an in-depth conversation on the value of checkout to the conversion process, reflecting new data that showcases how integral this part of the purchase journey is, especially on mobile devices. Panel guests included Richard Gilbert, Senior Manager, Channel Partnerships at PayPal, Yvan Boisjoli, Co-found and CEO at Bold and Deanna Traa, CMO at Bold. The insights below were outlined throughout the conversation.
Checkout is an integral part of your conversion process
Ecommerce brands can no longer count on web traffic alone to meet their sales target — especially since the growth of online traffic has come to a stall.
The Salesforce Shopping Index reports that digital traffic declined by 1% in the final quarter of 2021, compared to the year prior.
On top of this, the cost of acquiring a lead through key media channels like Google ads and social apps like Instagram, has risen dramatically.
For instance, the cost-per-click (CPC) for a Google ad went up by 19%, and the cost-per-thousand-impressions (CPM) on Instagram increased by a hefty 37%, year over year, reported Tinuiti at the end of 2021.
Faced with these two major challenges, and so many more, the path forward is clear.
“It’s more important than ever for brands to maximize conversion for their existing traffic” -Yvan Boisjoli, CEO, Bold Commerce
And the checkout process plays a much bigger role in this strategy than many retailers realize.
Brands want to improve shopper experiences, but aren’t optimizing checkout…yet
Retailers have found that investing in remarkable customer experiences (across the entire customer journey) is the key to maximizing conversion.
Some of their top strategies include:
- Digital marketing to attract new customers.
- Optimizing on-site discovery to help shoppers find what they are looking for.
- Customization so that every digital experience is as unique and engaging as possible.
But one area that is still left untapped? Checkout.
In the third quarter of 2021, Bold analyzed shopping activity data to produce The Checkout Benchmark — a report that includes insights from 3 million checkout sessions or 1.5 million orders, which altogether generated nearly $140 million in Gross Merchandise Value (GMV).
One of the most important metrics in the report is Checkout Completion Rate: it’s the number of completed orders divided by the number of checkouts that shoppers began, i.e. when they click or tap to “begin checkout.”
Broken down by the two major devices used for online shopping, the data reveals that consumers are more than 10% less likely to complete checkout on a mobile phone versus a desktop computer.
The thing is, people are more likely to start a checkout process on mobile devices (55.5 per cent), which means intention or at least interest to buy is there. But in the end, mobile only accounts for 47.5% of GMV.
That’s a lot of potential revenue being left on the table during the checkout process.
And it means shoppers are comfortable with the idea of making a purchase via their smartphone, but are either uncomfortable checking out on the device or simply not happy with the experience.
The opportunity: customized checkout journey = increased checkout completion rates
The numbers are clear.
Top performing retail sites — that improve checkout user experience by employing testing strategies to remove friction — perform two to three times better when it comes to completion rate.
“One size fits all isn’t going to cut it…Brands are going to need to optimize the mobile experience differently.” -Deanna Traa, CMO, Bold Commerce
Mobile checkout optimization is more than pre-filled addresses and payment credentials though.
It requires a tailored checkout flow that is not designed for desktop, but rather tests out which information is most important to display, considering the smaller screen size of a mobile device.
This process should be informed by analytics and make the experience as seamless as possible for the shopper.
Examples include: a one-click purchase experience, easy access to checkout via a proliferation of different touch points (such as QR codes and social media apps), seamless shipping and/or delivery options, access to loyalty points, as well as quick pay options such as digital wallets.
The role of payments when optimizing mobile checkouts
Payments is a key point of checkout friction for consumers, with 35 per cent of mobile shoppers abandoning a purchase because their preferred payment method isn’t available, reveals a study by Forrester Research on behalf of PayPal.
Digital wallets such as PayPal (by far the most accepted wallet by online retailers across North America and Europe) securely store user payment information — which saves a customer from having to fumble around and dig out their credit card in order to make a purchase.
Quick pay solutions like this then enable the potential of other customization options, like one-click checkout and buy now, pay later.
“We’ve seen much greater conversion rates when merchants do expose a buy now/pay later solution.” -Richard Gilbert, Senior Manager, Channel Partnerships, PayPal
Options are great, but retailers must be careful not to provide too many via a mobile platform with limited space. That can just reintroduce a new type of friction. So with payments, it’s not a question of how many options to offer, but determining (via testing) which ones most appeal to your target audience.
Wondering how to structure your ideal checkout flow? It depends.
As they think about how to provide an optimal checkout experience, many brands want to know what the best checkout structure is.
One-click checkout? A single-page scroll? A multi-page progressive flow? Data from Bold’s checkout study reveals…there is no clear winner.
“Checkout needs to be dependent on you as a brand, and on your shoppers, and how you instrument the engagement between you and the shopper…Test different things to get you to the best, most optimal outcome.” -Rick Kenney, Founder and Managing Director, Leading Lights
The focus of a checkout flow should be on customer convenience. They want a flexible, frictionless checkout and what defines that experience is unique to every business and consumer audience. So testing, testing and testing again is the strategy for success.
We know that checkout offers tremendous opportunity for revenue growth — even potentially delivering double digit improvement — if conversions can be boosted at this point in a shopper’’s buying journey.
Just remember that checkout is a key element of that journey, not an afterthought or end point.
The knowledge and data discussed here was shared during a webinar discussion, “Inside the Checkout Benchmark” hosted by Bold Commerce on February 17, 2022. The talk featured host Rick Kenney, Founder and Managing Director at Leading Lights, Richard Gilbert, Senior Manager, Channel Partnerships at PayPal, Yvan Boisjoli, Co-found and CEO at Bold and Deanna Traa, CMO at Bold.
- The Checkout Benchmark