Cart Abandonment is a huge phenomenon and is the single biggest issue eCommerce businesses have to overcome. Just think, 7 out of 10 shoppers who visit your site will save items they like to their cart, and then leave, never to return. That’s huge!
You can calculate your own cart abandonment rate using this simple formula.*
What can be done about it?
According to SaleCycle, 18% of online abandonments were due to price, and a further 6% due to lack of payment options. Prices are simply too high and shoppers can’t justify paying so much online. And it seems these shoppers are also looking for a different way to pay.
Flexibility and control over personal debt has shoppers turning to installment payments as an alternative payment method. Especially cash-strapped millennials. With zero-interest and greater flexibility, it’s a great option, particularly for more expensive items. Offering shoppers newer and unconventional payment methods, such as installment payments, have been shown to reduce cart abandonment. The key is to keep this process simple, safe, and secure.
So, why is it so hard for online commerce stores to get this right?
It’s so hard for online commerce stores to get it ‘right’ because installment payments are a new concept for most merchants. Using this type of fintech seems scary and troublesome, but in reality it is very easy. Splitit works directly with a shoppers existing credit or debit card, which means there is no friction for shoppers, and for the merchant it is a global solution, with seamless integration.
During checkout, shoppers select Splitit from the list of payment options and choose the number of payments they wish to make, reducing the amount they pay at checkout to a fraction of the cost. Their full payments are completely secured through Splitit, ensuring the merchant always gets paid in full.
Shoppers are happy because they are paying less upfront. Merchants are happy because having this option helps decrease their cart abandonment rate, results in higher average order value (AOV), and increases website conversions.
Awareness is key here to “getting it right.” It comes down to merchants being aware of these payment options in the first place, as well as have an understanding of just how much their shoppers are seeking these options.
Get now, pay Later
Some shoppers are hesitant to push the “buy” button because they are worried that they won’t like the product and have to go through the hassle of returning it and getting their money back. This is yet another big point of friction that can be solved with alternative payment options.
Splitit offers the ‘get it now, pay for it later’ option, which can be really beneficial to merchants. Imagine using an ‘exit-intent popup’ to offer 90-days free trial, no payment required until the end, AND installment payments available once they do pay for the product….that’s a great closer!
Industries like mattress companies and fashion companies have already been jumping on this concept, and it’s working for them! Shoppers can “test drive” their product for up to 90 days without paying a dime. People can order boxes of clothing and accessory items straight to their homes, keep what they like and send back anything they don’t want. Likewise, shoppers get to see how sleeping on their new mattress really feels, without worrying that they paid so much for something less than perfect. It’s a literal “hands-on” shopping experience from the convenience of your home.
Plus, people are less afraid of the price if they can try the item first and know that they will love it. The payment is secured for the merchant, and it provides yet another push to close a sale.
Flexible payments are here to stay
Alternative payment options are only going to become more prevalent as time goes on, and they are already helping merchants turn their cart abandonment rates around. The less friction and the more (simple) options provided by an online commerce store, the better.
Find out more about how you can improve your cart abandonment rate today.