How you might be losing many online sales
You might be losing many online sales because you are making the checkout experience too time-consuming or too difficult for your customers.
A new survey of 5,000 consumers by digital commerce company Forter finds that:
• When retailers rely on one-time passwords (OTP), CAPTCHAs and order reviews to enhance security, they deter good customers and leave money on the table.
• Forcing customers to create an account can cause 3 to 5% of consumers to drop off.
• Requiring consumers to validate their email addresses or phone numbers can cause an average drop-off rate of 4% to 7%.
Seamless experience is critical
In the race to win the next generation of shoppers, ensuring the legitimate ones have a friction-free experience is critical, Forter says.
Forter estimates that for every $1 that retailers lose to fraud, they forfeit $30 by declining legitimate customers.
The report finds what it calls “alarming” rates of false declines of customers’ would-be purchases, cart abandonment, and trust issues heading into the holiday shopping season.
It finds, too, that customers are willing to spend a whopping 46% more with retailers they trust.
‘Trust Premium’
Three-quarters of those who responded to the survey reported having a negative online shopping experience in the past three months.
Forter, calls it the “Trust Premium.”
“The Trust Premium represents potentially millions of dollars in revenue uplift for retailers,” says Michael Reitblat, chief executive officer and co-found of New York-based Forter. “Retailers that lean into and invest in customer experience—from account creation to authentication to checkout—are best positioned to turn a profit over the Black Friday and Cyber Monday weekend.
Young shoppers face most friction
The poll finds that younger shoppers face the most friction with online shopping. They are up to four times more likely to be falsely declined at checkout compared with older shoppers.
A lack of data and insight ultimately leads to false declines instead of an opportunity to secure the customers’ lifetime value.
Essential in building trust
The survey found that a seamless checkout experience is one of the most essential pieces of building trust and completing a transaction.
“Our report reveals the brands that win the next generation of shoppers will provide fast, frictionless and fraud-free shopping experiences—and establish mutual trust with their consumers,” Reitblat says. “Friction in the purchasing process no doubt persists, but it doesn’t have to go unabated.
“Balancing the importance of fraud prevention without impacting customer experience will be the next major test for retailers during the upcoming holiday shopping season.”
You can read the full 2023 Trust Premium Report here.
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