Five Keys to Success Online

It’s more critical than ever that online merchants leverage payments to satisfy shoppers’ expectations. From the checkout experience to social media, here’s a quintet of ways to make that happen.

Holiday sales hit a record high this past season, when Americans spent $53.3 billion online, according to a recent study by comScore. Now, six months later, consumers are reluctant to transition back to brick-and-mortar stores, keeping online shopping in high demand.

That makes the e-commerce shopping and payment experience more crucial than ever for capturing sales and profits.

Online payments, and the ease of purchasing online, have a direct effect on the customer’s shopping experience. It’s the last touch point your brand has with the customer before the product leaves your warehouse and lands at the customer’s front door.

Word of mouth and online reviews are crucial when customers are regularly sharing experiences on where to find the best deals or which sites meet their purchasing preferences. If retailers don’t measure up online, word can spread quickly. And it’s all too easy for customers to visit a competitor or find an online site that better meets their needs.

For this reason, retailers must understand what’s driving purchasing behavior and what’s driving customers away.

The following online customer expectations must be met to ensure retailers’ front-end e-commerce platform succeeds from the point of interest to the point of sale.

1. Seamless Checkout

According to CPC Strategy, which specializes in retail-focused online-search strategies, retailers lose an average of $18 billion annually due to shopping-cart abandonment. If a checkout process is too long or complicated, shoppers tend to drift from their carts and look elsewhere out of frustration. In a SecureNet study, we found that 68% of online shoppers reported abandoning the checkout process because of frustration.

Storing customer credit card information makes it easy for shoppers to complete a transaction in a matter of a few clicks. It increases the likelihood of repeat sales in the future, because customers know the sale will be fast and easy thanks to remembered information. In fact, according to a survey released by SecureNet titled “The Way We Pay,” nearly one in three shoppers are more likely to buy from an online retailer that stores and automatically loads payment information.

But even with stored data, online payments become a hassle when consumers get new credit cards and are required to update personal data. Payments processors able to facilitate that process automatically ensure a more seamless checkout.

In addition, consumers seek out a seamless transition between selling environments. When choosing which retailer to buy from online, 65% of shoppers favor retailers that offer a way to return online purchases in-store.

2. Affordable Shipping

One of the reasons consumers choose online retailers over their in-store counterparts is the convenience of shopping right from their homes, with delivery of goods directly to them. While this may seem like common sense, one of the biggest reasons consumers decide to shop in a physical location is the cost of shipping. Consumers aged 18 to 44 listed shipping costs as the biggest factor impacting their decision to purchase a product online.

Shipping costs are often added at the final stages of checkout, when shoppers are preparing to decide whether or not to confirm the purchase. When shipping costs make an item more expensive than if it were purchased in-store, the convenience and appeal of online shopping is lost and consumers will seek different sites for lower prices.

Clearly, it is unrealistic for all retailers to provide free shipping to their online customers. But offering loyalty programs, or shipping deals to preferred shoppers with registered accounts, or discounts with the use of promotional codes can all be solutions that help alleviate the shock of shipping costs.

3. Big Data in Real Time

E-commerce retailers have the ability to track and record data from online consumer transactions. Yet, fewer than 5% of e-commerce companies use big data or predictive analytic software, according to the research firm Gartner.

Monitoring the behavior of their customers allows businesses to make smarter and more efficient business decisions. For instance, certain hours of the day are slower sales periods than others, making them an ideal time for a promotion aimed to boost sales. Certain products are sure to sell better than others in particular regions, so regionalized home pages can better target local interests.

While these business decisions will ultimately mean bigger profits for retailers, the benefits extend to their customers as well. It creates a more personal shopping experience and an opportunity to take advantage of relevant sales and promotions.

The Millennial demographic, in particular, favors a personalized shopping experience when it provides a unique value. Statistics show that 85% of Millennial shoppers are more likely to shop at a retailer that offers customized promotions or discounts based on their past purchases.

4. Secure Transactions

According to the Identity Theft Resource Center, 2014 saw a 21% increase in data breaches in the U.S. from the previous year. So now is the time for retailers to amp up their security game.

The 2013 holiday season, in particular, really opened the eyes of consumers to the concept of safe transactions. In what has become known as the infamous Target security breach, close to 40 million consumers had their personal payment information compromised.

Incidents like these are not easily forgotten by consumers. For shoppers aged 45 and older, secure checkout is the number-one factor that impacts their decision to buy a product online, and nearly half of all consumers are less likely to shop at a retailer that recently suffered a data breach.

Overcoming this trust barrier can be difficult, but not impossible, for retailers. To avoid profit losses and reputation damage, retailers must prioritize safe and secure transactions across all channels. There are many tactics that make this possible, such as encryption, tokenization, filters, or network-monitoring software.

Customers need to feel assured their credit information is safe before clicking “proceed to check out.” Without assurance of security, they’ll shop elsewhere.

5. Social Benefits

A social-media presence is a great way to round out the online experience and influence shoppers. Millions of consumers spend time on social-networking sites from their computers and mobile devices, providing ample opportunities for brands to connect with existing and potential customers.

Forty percent of consumers have purchased a product after marking it as a favorite on a social-media channel, according to a study from SocialMediaToday.com. Some of these “favorited” items are then the subject of showrooming, a popular practice by Millennials in which the buyer visits a store to examine a product before purchasing it online at a better price. More than one in five consumers have purchased a product from their mobile device while inspecting the same product in a store.

Beyond providing retailers with the chance to post about new products or sales, platforms such as Twitter are even testing out “Buy” buttons to shop directly from the social site. Retailers have to make sure they’re equipped with a payment system that can handle an influx of social-media traffic or even function through the channels.

—Nish Modi is senior vice president of product and innovation at SecureNet Payment Systems, Austin, Texas.