Consumers’ online shopping behaviour has changed due to the current economic landscape, but online merchants can optimise seasonal deals to achieve eCommerce success.
In the face of spiralling living costs, consumers are eager to optimise their budgets and are on the lookout for online shopping that supports that. Our latest Lost in Transaction research, which surveyed 14,500 consumers in North America, Europe, the UK, and Latin America, found 47% of consumers have abandoned their carts due to budget constraints.
But thinking more carefully about whether they should buy an item at all isn’t the only way consumers have changed their behaviour in the face of rising bills and tightening budgets.
Our latest research shows they’ve also reconsidered when to spend money online, and how they pay for those purchases.
So what does this mean for eCommerce merchants moving forward? What steps should they take to keep customers engaged and boost sales?
Our 2023 Lost in Transaction research reveals that cost-consciousness has become a key driver of consumer buying behaviour. While there’s still appetite for discretionary spending, consumers increasingly look for value for money when deciding whether to buy.
From a merchant’s perspective, this means compelling promotions will probably have a considerable impact on sales moving forward.
In 2022, Black Friday revenue hit a record $9 billion in the US alone. But with 67% of survey respondents telling us they’re now more likely to wait for Black Friday or another seasonal sale or discounting event to make an online purchase, revenue could soar even higher in 2023.
More to the point, while unmissable offers may bring in more customers, they won’t necessarily be enough on their own to boost sales.
If consumers were comfortable changing their minds at the checkout when the economy was on more solid footing, they’re even more willing to do so now that they’re worried about their bills. So online merchants also need to offer the streamlined online payment experience consumers expect.
What does a ‘streamlined online payment experience’ look like in 2023?
According to our research, it must deliver on three priorities: choice, convenience, and security.
Put more simply, merchants must enable consumers to pay using the method they prefer, with minimal friction, while feeling reassured that their financial details and other sensitive data are safe.
75% of Lost in Transaction survey respondents expect their preferred payment method to be available at the checkout, and significant numbers will abandon their cart if it isn’t.
But accepting a wide range of payment methods — credit and debit cards, digital wallets, mobile wallets, and alternatives like eCash — isn’t just about control. It’s also about having different options available. 74% of consumers want multiple payment methods at the checkout so they can choose.
More choice at the checkout is beneficial to merchants, too.
It reduces cart abandonment by offering consumers a fallback option. 28% of our survey respondents told us they try a different payment method if their first choice fails.
More significantly, choice can be a key differentiator in an ever more competitive landscape, enabling merchants to stand out and reach a broader pool of potential customers.
Case in point, accepting eCash, which makes it possible for consumers to pay online with cash, can make merchants more accessible to the 1.7 billion unbanked or underbanked adults worldwide. For merchants, this means an expansion of their addressable market to cater to more consumers.
Convenience and security are typically viewed as being in competition with each other: less friction usually means more risk, while less risk means more friction. But our research reveals they’re equally important to consumers.
69% of our survey respondents expect a frictionless checkout, and 46% of those who shop online regularly say convenience is their priority when choosing how to pay.
At the same time, 75% of respondents only buy from merchants who are known to have a safe and reliable checkout, with 64% of those who shop online saying security is the most important factor when choosing how to pay.
More significantly, consumers are becoming less and less willing to accept trade-offs.
Only 12% of our respondents who shop regularly online would accept higher risk in exchange for easier payments. And while 23% would accept more friction in exchange for safer payments, this is contingent on friction being minimal.
With less room for compromise than ever before, offering more payment choices at the checkout — particularly digital wallets and eCash — takes on even more importance.
Besides making the checkout accessible to more consumers and giving them more flexibility and control, alternatives to credit and debit cards enable consumers to pay without sharing sensitive financial details, while keeping friction to a minimum.
Economic uncertainty would be challenging enough on its own.
But, in 2023, eCommerce merchants also have the added complications of entrenched payment preferences, and very clear expectations for what a stand-out online checkout experience should look like.
When consumers decide to buy online, they have an eagle-eye for deals.
And when a deal does catch their attention, it’s not a given that they’ll complete the purchase. If checking out feels like too much effort or the process raises security red flags, consumers will simply leave their cart and move on.
It’s a daunting landscape for online merchants to navigate. But those that get it right will gain a significant competitive advantage.
Ultimately, the eCommerce industry’s most valuable currency is trust. And the best way to earn it is to give consumers the choice, convenience, and security they crave at the checkout.