Mobile Optimization Initiative: Switching Retailers Onto Checkoutlesss Commerce

Mobile Optimization

This article is part of our ongoing Mobile Optimization Initiative series designed to help Magento merchants close the mobile revenue gap.

Traffic to eCommerce websites has flipped onto mobile—71 percent of all visits in the UK are from a mobile device, according to IMRG—yet conversion rates and revenue aren’t keeping pace. Customers are busy, seeking the fastest way to make a purchase when buying on mobile and cart abandonment often happens at the checkout stage. At GENE we are continually helping retailers optimize their eCommerce experience, so we decided to find out more about the current payment landscape in the UK on mobile retail sites.

As part of the Mobile Optimization Initiative, we have carried out an extensive study into the take-up of “checkoutless” commerce in the UK. This is where payment methods integrated on a site allow customers to transact before the conventional checkout stage, speeding up and simplifying the buying journey and encouraging conversions.

Don’t Leave Mobile Payment Innovations in The Basket

People have become accustomed to the slick and friction free mobile experience of Airbnb, Uber, and Deliveroo. When they shop with retailers on mobile and need to type their payment details on fiddly forms to make a purchase, frustration inevitably follows.

It doesn’t have to be like this. In the Mobile Optimization experiments, we’ve already shown that adding a PayPal Express button to the mini-cart can significantly boost RPV by simplifying payments. Logically we should also see a boost by leveraging other opportunities and technology to make paying on mobile simple and convenient, where consumers can transact before the conventional checkout stage. Integrating digital wallets such as PayPal Express, Amazon Pay, Apple Pay, and Google Pay on the product detail and basket pages removes the need for customers to enter their details each time. This checkoutless process also reduces the average number of touches required to complete a mobile transaction from eighty to two.

Mobile Optimization

For our inaugural annual report, we examined take-up of the most popular digital wallets—PayPal, Amazon Pay, Apple Pay, and Google Pay—and the resulting customer experience. The mobile websites of the top 250 UK retailers were analyzed and we also looked at how the top brands perform in specific sectors: grocery, fashion, sport, and homewares.

Checking Out Who’s Checkoutless, and Why It Matters

Our research revealed that checkoutless commerce is yet to become mainstream in the UK, with over two-thirds of retailers (70 percent) failing to offer any means of paying for a purchase before the conventional checkout stage.

Of those brands that do provide checkoutless payment methods, the most popular is PayPal Express which is offered by 84 percent. This high level of integration is revealing, if not surprising. Merchants may choose to provide PayPal Express as they know it enables conversion and consumers feel confident with a familiar, trusted brand that operates a simple redress service. The same rationale could apply to the popularity of Amazon Pay, which is offered by 26 percent of retailers.

Checkoutless payment

We also found that Apple Pay and Google Pay have not yet been widely adopted. Offering a device-specific wallet would seem a good way to connect with specific market segments. However, some banks have been slow to integrate the technology, which is reflected in the low take-up.

Digging Deeper into Digital Wallet Use

When we examined the availability of the four major digital wallets at any stage of the payment process, we again found PayPal to be the most popular, offered by 86 percent of the 250 retailers studied. Despite its extensive deployment, only 29 percent were using PayPal’s Express function correctly, on the product or basket page. This implies a possible lack of understanding of its functionality as a checkoutless payment method.

We also observed the number of digital wallets provided, either as a checkoutless option or at the traditional checkout stage. Over half the brands (54 percent) had just one wallet, while just under a quarter (24 percent) offered two. Only one retailer provided all four options, and 33 offered none.

Ideally, they should offer a selection. If retailers are concerned that the basket page will be overrun with logos, they can set up processes that remember how a customer likes to transact, then personalize payment options accordingly.

digital wallet

Sector Specific Findings

By reviewing the performance of retailers in four key vertical sectors: fashion, sports, homewares, and supermarkets, we were able to identify where and why checkoutless commerce is being resisted on mobile in more detail.

The use of checkoutless payment options by sportswear retailers is slightly higher than the overall group, at 32 percent. As this sector tends to target mobile-native younger shoppers, it makes good business sense. However, fashion, which has a similar target market, is less optimized. Only a fifth of brands enable shoppers to purchase ahead of the checkout stage.

An adoption rate of 12 percent by the homewares and DIY sector points to a possible lack of understanding of how best to integrate checkoutless payment methods. If a merchant needs to organize a complicated delivery of kitchen units, for example, they may feel it’s easier to position payment alongside customer requirements at the end of the journey. For the same reason, supermarkets may not want to interrupt a grocery shop with the option to ‘Buy Now’ as they require shoppers to pick a time slot for delivery.

eCommerce websites - checkoutless

Simple, fast payment processes won’t detract from the customer journey if implemented correctly. The technology can be tailored to each retailer’s requirements. Quick payment can also encourage impulse purchases, while passwords, biometrics and face recognition functionality add enhanced security and increase confidence.

Mobilize the Opportunity

Convenience is the new commodity online and checkoutless commerce is an integral part of this. The retail industry can be transformed by embracing technology that makes life more convenient for customers but requires a different psychology. Paying for purchases using a phone or watch is a nascent development and one which retailers and consumers are still adjusting to.

There are always competing IT priorities—investing in the look and feel of an online store will usually take precedence over innovative checkout solutions—and changing payment gateways is relatively high risk. Businesses need payment solutions that integrate seamlessly into their mobile storefronts, so a mindset shift at the web design stage is necessary to integrate digital wallet options in an optimal way rather than layering new software over legacy processes and payment systems which slow down a site’s responsive capabilities.

Traditional online checkouts will become redundant as technology enabling merchants to interface directly with devices for payment advances. Checkoutless commerce is just the start of the mobile payment revolution.

How Many Payment Options Do You Need?

Reluctance by retailers to provide a suite of payment methods became apparent when we examined how many digital wallets are offered either as a checkoutless option or at the traditional checkout stage. Only one retailer provided all four options and, remarkably, 13 percent had none. What is the optimal number of checkoutless options and what is the best way to configure them? Sounds like a great topic for a collaborative Community experiment, doesn’t it?

About GENE

GENE is a new breed of eCommerce agency. It helps retailers and brands outthink and outmanoeuvre competitors. Providing long term consultancy, strategic planning and technical builds, GENE’s team of specialist Magento developers create online stores that significantly grow customer numbers, engagement and revenue. GENE’s proprietary Page Builder and content management system tool, BlueFoot, was acquired by Magento in 2016. The company is also responsible for PayPal’s Braintree extension on the Magento platform. Founded in 2013, GENE won ‘Best Agency’ at the 2017 UK eCommerce Awards.