E-commerce has completely revolutionized the way people shop. With the rise of online shopping, the process of buying goods and services has become much more convenient, efficient, and accessible.
However, this convenience has also created new challenges for online retailers. One of the most significant challenges is cart abandonment, which occurs when a customer adds items to their cart but then leaves the site without completing the purchase.
In the UK, cart abandonment is a major problem for online retailers. According to recent statistics, the average cart abandonment rate in the UK is around 75%, which is higher than the global average of 70%. This means that for every four people who add items to their cart, only one actually completes the purchase. This can have a significant impact on an online retailer's bottom line.
It’s a vital KPI for ecommerce sites, enabling retailers to understand if there are problems with the sales funnel or whether the online experience is poor for the end user. A low cart abandonment rate means more sales and more revenue.
One of the main reasons for cart abandonment in the UK is payment friction. Payment friction occurs when the payment process is too complex, time-consuming, or confusing for the customer. Customers may become frustrated with the checkout process, leading them to abandon their cart and look elsewhere for the same product or service.
Omnichannel payments refer to a payment system that allows customers to pay using multiple channels, such as credit cards, debit cards, digital wallets, and other payment methods. By providing customers with multiple payment options, omnichannel payments reduce payment friction and make the checkout process much smoother and more convenient.
One of the main benefits of omnichannel payments is that they allow customers to use their preferred payment method. Different customers have different payment preferences, so by offering multiple payment options, retailers can cater to a wider range of customers.
For example, some customers may prefer to pay using their credit card, while others may prefer to use a digital wallet like PayPal or Apple Pay. By offering both options, retailers can cater to both types of customers, reducing the likelihood of cart abandonment.
Another benefit of omnichannel payments is that they allow customers to switch between payment methods. For example, a customer may start the checkout process using their credit card but then realize that they don't have their card with them.
With omnichannel payments, the customer can easily switch to a digital wallet or other payment method without having to start the checkout process all over again. This reduces the risk of frustration and cart abandonment.
Omnichannel payments also provide customers with a more seamless checkout process. With traditional payment methods, customers may have to enter their payment information manually, which can be time-consuming and error-prone. With omnichannel payments, customers can save their payment information and use it across multiple channels, making the checkout process much faster and more convenient.
In the UK, digital wallets such as PayPal and Apple Pay are the fastest-growing payment method, with usage increasing by 114% between 2017 and 2018, according to a study by Worldpay. This highlights the importance of offering digital wallet options to UK customers, as they become more accustomed to this payment method.
In addition, the same study found that 70% of UK consumers prefer to pay with a debit card, followed by credit card at 26%. Offering both options is therefore crucial for retailers looking to reduce cart abandonment in the UK.
By reducing payment friction and providing customers with multiple payment options, retailers can create a smoother and more convenient checkout process, reducing the likelihood of cart abandonment and increasing sales. As e-commerce continues to grow, omnichannel payments will become an increasingly important part of the online shopping experience, helping retailers to stay competitive and meet the evolving needs of their customers.