Avoid Cart Abandonment: Consider Payment Methods & Free Shipping
This week, we’re talking about eCommerce websites. More specifically, discussing how utilising the right payment methods and offering free shipping can play a vital role in avoiding cart abandonment and boosting conversions.
Payment Options: Offer your prospects many ways to pay
You can increase conversions by making it easier for your prospective customers to buy your product or service. One way to do this is to give them multiple payment methods such as PayPal, credit or debit cards, telephone payments, direct debit, etc.
Recent studies have shown that cards are the primary method of payment, accounting for 53% of eCommerce payments. E-wallets usage comes in next with 29%, PayPal leads the way, followed by Google Pay, Amazon Pay, and Apple Pay.
Why not limit the choice of payment options to keep things simple?
Well, there’s a strong likelihood people will cancel their purchase if they don’t see their favourite payment option.
A survey carried out by YouGov found that half of regular online shoppers will cancel a purchase if their preferred payment method is not available. Furthermore, 40% of shoppers said they’d feel more comfortable buying from a retailer that offers a wide range of payment options, than one that only offered a single payment method.
If you limit your customers’ payment choices, you’ll make it more likely that they’ll go to a website where shopping is more convenient. And the more options you offer your target audience, the more likely your site is to appeal to a greater number of people.
There’s another very good reason to offer people multiple payment options, and that’s to overcome their fear of having their identity stolen or becoming the victim of fraud. With so many news articles about credit card and identity theft, people are wary of using their credit cards to make online payments, particularly on websites they’ve never visited before.
How to offer multiple payment options
Find out which payment options are most appealing to your target audience. After all, there’s no point going to the effort of setting up a payment option like a Bitcoin wallet only to discover that your customers are never going to use it.
You could survey your existing and prospective customers and look at what payment options your competitors use. Compare the set-up and running costs of each option you consider.
Opt for a payment processor that offers multiple options
Free Shipping: Offer free delivery to win over prospective customers
Free delivery or shipping, is hugely important to consumers. Only 35% of shoppers are willing to pay for delivery on online orders, research has revealed. The remaining 65% are unwilling to pay for shipping on online orders at all.
And free delivery is more important to customers than price. A free delivery offer that saves a customer £6.99 is more appealing to many than a discount that cuts the purchase price by £10.
The same may also apply to free set-up. There are two types of free shipping (or free delivery) that you can offer:
– Conditional free shipping. You set conditions such as a minimum order value, select items or economy delivery. A minimum order value can encourage customers to spend more, research has shown. A UPS Comscore, Inc. study found that 60% of consumers added items to their cart to qualify for free shipping.
– Unconditional free shipping. You offer free shipping on every product you sell. The benefits of offering free shipping are that it makes you competitive since many eCommerce stores are likely to be offering it. And it lessens the likelihood of your website visitors abandoning their shopping cart. It might not be such a great idea however if you sell items that have a small profit margin or that are heavy or bulky because you will lose more on the transaction than you make.
How to offer free or low-cost shipping
– Minimum order level. The ideal minimum order level should be low enough to attract new and existing customers, but high enough so you don’t lose money on the offer. To set a minimum order amount, take your average order amount and set your minimum about 10% to 15% higher. This encourages shoppers to spend a little more to save on shipping. Display the free shipping threshold amount prominently throughout your website. Showing ‘Free Shipping’ prominently on your store but not drawing the user’s attention to the ‘threshold’ order value, can work against you. If a user notices the threshold order value late during the checkout process, he or she might feel tricked and abandon the cart.
– Offer free shipping on select items only. Offer free shipping on products that have a low shipping cost and enough markup to be profitable after the shipping fees are factored in.
– Offer free shipping for a limited time. Generate interest in your limited free shipping promotion by publishing details about it on social media, in emails and on your website.
– Offer free economy shipping. Offer your prospective and existing customers a free but slower delivery service along with a fast, non-free option.
Shipping
Before offering unconditional free shipping on every product you sell, make sure you factor in your profit margins and ensure you can closely control your fulfilment and shipping costs.
If you must charge for delivery, make sure that you always mention the costs upfront. And if you can afford it, charge a flat fee because it will be easy for people to understand. A flat-rate shipping fee can also encourage people to increase their order size.
State the obvious
Be clear when explaining payment, shipping and return processes – don’t be afraid to state the obvious. If a customer is uncertain about any of these details, they won’t buy your product. It’s that simple.
Customers don’t want to waste time wondering whether payment and shipping will meet their expectations.
Make it easy to see and read the details. Actual shipping costs and payment conditions shouldn’t be displayed in tiny font sizes nor be clarified using extra asterisks or footnotes.
One study showed that 20% of people have abandoned a purchase because shipping costs were unclear, so make sure your terms are easily understandable even when they aren’t a selling point.
Key takeaways
1. Offer multiple payment methods at checkout to avoid cart abandonment.
2. Offer FREE shipping if you can to give you a competitive edge.
3. Make payment and shipping details crystal clear so the process is as simple as possible for the customer.
