Retailers – whether online or brick-and-mortar – have had to adjust to consumer habits that changed permanently during the pandemic. Large numbers of people were working from home or shielding, while high streets and shopping centres were temporarily closed, or their opening hours and customer numbers severely curtailed. This seemed to give online retailers an advantage during lockdown restrictions. 

According to Statista, in 2020, e-retail sales accounted for 18% of all retail sales worldwide, a figure that is expected to reach 21.8% in 2024. This translates to Finextra forecasting the UK’s ecommerce market to be worth £264bn by 2024, a 37% increase on 2020 levels.

Traditional brick-and-mortar retailers that previously relied on customer footfall were forced to examine ways to improve online offerings. This proved tough for the many physical businesses that did not survive the economic impact of the pandemic. According to PwC figures, an average of 48 stores closed per day in 2020 in the UK. But during the pandemic, the online retail space became increasingly more competitive and crowded, so the pressure was on virtual stores to find new ways to retain customers too.    

Digital transformation in the retail sector has raised consumer expectations – while this presents opportunities for all retailers to engage with customers and create loyalty, the challenge is how to go about this in a dynamic and demanding marketplace. A flexible and convenient buying experience has become an integral part of customer retention. This includes better customer service, user-friendly interfaces and a range of payment options at the checkout.

Elissa Quimby, global director of retail insights, Quantum Metric, summarises what consumers now expect since Covid-19 changed the way retailers do business: “Being reliable in uncertain times is essential. We saw it with supermarkets during the pandemic – those that could provide online delivery when people couldn’t get out of the house were the winners, with loyalty remaining even as restrictions eased.” Quimby says the expectation of reliability in customer service “comes back to human emotion.”

“[We tend] to be loyal to products and services that give us a positive feeling,” she says. “The user experience should tell a story and offer convenience – giving the consumer what they need, when they need it.”  

The positive feeling created by reliability applies equally to online and physical retailers, especially as more shopping experiences involve looking at products on websites or apps, then visiting stores in person to see the products before making a purchasing decision. This approach depends on shops having products in stock. In 2020, Google reported that shopping searches for “in stock” grew by 700%. Therefore, regardless of whether the consumer intends to buy online, make a click-and-collect order, or visit a store to make the final decision, this is a vital part of the reliability equation.

User-friendly interfaces are important for ecommerce retailers that are serious about customer retention. Online shoppers expect a seamless, easy experience.

“In this world of increased competition, making sure the online customer experience is fast and glitch-free is vital to loyalty and brand,” says Deri Jones, CEO of software company thinkTRIBE. “This is because online there are so many suppliers and very little is actually unique, so we can all shop elsewhere so easily.”

In this world of increased competition, making sure the online customer experience is fast and glitch-free is vital to loyalty and brand

Jones cites poor usability of search engines, difficulties in comparing similar products at the same store, and extra complexities, including search AI plugins and personalisation, as affecting the user experience. Such issues can cause glitches and slow websites down, which is frustrating and inconvenient for shoppers. 

As well as ensuring websites and apps are built by competent developers, Jones cautions that marketing teams can cause glitches that interfere with user-friendly interfaces: “[Marketing teams’] use of multivariate or A/B testing means they create two or more versions of the web store in parallel … and users can experience problems [caused by] unexpected tech interplay in javascript.” 

The payment experience is the last stage of the transaction, but it can be the most important one in terms of customer retention. The increased expectations of post-pandemic consumers extend throughout the entire process – and poor experiences at the payment stage can lose retailers a lot of revenue.

Jonny Longden, conversion director at Journey Further, a performance marketing agency, explains the psychology of a customer at the checkout: “Handing over cash for something represents final commitment, as well as absolute vulnerability and risk.” 

He says this point in the transaction is “a crescendo that is built up to by the rest of the checkout process, which can either build trust and confidence or the opposite – this experience is a pivotal moment in the creation of brand perception and trust, so it has an immeasurable impact on loyalty and retention.”

Offering a range of payment options at the checkout not only meets the increased expectations of customers, but it creates trust and gives the retailer credibility. This reassures the customer that the brand is convenient, flexible and meets their needs.

“Payment methods that suit the user are paramount,” says Andrew Rogers, ecommerce consultant and founder of Rogers & Rogers. “People feel safe using a payment method they trust and use regularly, so limiting to only one method will increase cart abandonment, which eats away at profits.”

This is where alternative payment methods, such as buy now, pay later (BNPL) solutions, are important, especially for customers making large purchases, such as furniture or large household appliances.

Steve Cronin, a financial independence coach and the founder of DeadSimpleSaving.com, says that alternative payment methods “reduce the fear of spending a lot of money”. But he adds that such systems have to be “very straightforward to use, otherwise it will lead to cart abandonment from confusion and third party links not working properly.”

Longden echoes Cronin’s call for alternative payment methods to be introduced carefully as they are an “attractive option [but can] create complexity that otherwise wouldn’t exist.” To avoid this, Longden advises rigorous testing to ensure the solution is easy to use and the terms are clear to the customer at the checkout.   “Embedding alternative payment providers online at checkout, for which customers already have accounts, will likely result in higher conversion,” says Wizz Selvey, retail expert and founder of Wizz & Co. “These options can be beneficial for both brands and customers, particularly for peak trading periods such as Black Friday and the run-up to Christmas.”

For many online retailers, the website or app is well-designed, the search function is optimised, the pricing is transparent and the descriptions of products and services are clear – but if the checkout experience is difficult, frustrating or inflexible, the risk of cart abandonment is high.

A Barclaycard survey found that every month British shoppers abandon £30 on average in online shopping baskets. But an improved experience that supports the customer for the entire journey, from logging on to the website or opening the app right through to the checkout, is essential for maximising revenue and customer satisfaction.

Steve Cronin, a financial independence coach and the founder of DeadSimpleSaving.com, says online retailers can lose business “anywhere customers can get distracted, confused or fearful.”

He outlines the many reasons customers will abandon a cart or log out before making a selection: “A page takes too long to load, there are too many additional options to choose from, customers can't navigate through the sales page, they put their details in wrongly or too slowly, something looks amateurish and they get worried about getting scammed, there is a coupon code box and they don't have a coupon code, or they worry they can't afford it.”

It is important for online retailers to get these many moving parts right to make the sales and ensure customers return to the websites and apps – engagement and developing brand loyalty is important for ensuring repeat business.

Before going live, Cronin recommends “relentless user experience testing with actual customers” and, once the site or app is live, “getting the email address early so businesses can follow up on abandoned carts.”

Flexibility in payment is essential for successful ecommerce businesses. Just as shoppers expect to be able to pay with cash, use the credit or debit card of their choice, pay by mobile phone apps and have the option of alternative payment methods at physical retailers, a wide range of options should be available online. It is no longer enough to only offer the lone choice of typing in card details.

Deri Jones, CEO of software company thinkTRIBE, emphasises the importance of a smooth experience at the checkout: “Consumers have made their purchase decision, having found what they want, so they are super-expectant of a simple and frictionless final stage – as Star Trek captains used to say, they just want to ‘make it so’.”

Personalisation at the checkout is important, particularly when it comes to choice of payment methods, according to Elissa Quimby, global director of retail insights, Quantum Metric. 

“Multiple payment options that suit individuals are the key to attracting and keeping customers – for one person this might be buy now, pay later (BNPL), for another it might be paying via bitcoin,” says Quimby. “Viewed like this, it becomes another part of the increasingly sought-after personalised experience. It’s this personalisation, the holy grail of user experience, that attracts, delights and keeps customers coming back.”

Wizz Selvey, retail expert and founder of Wizz & Co consultancy, says alternative payment methods, such as BNPL solutions, are “definitely an important factor for online customers, particularly for large or expensive orders, because it gives the customer more options.” 

“In today’s ecommerce landscape, flexible payments are almost seen as a must-have feature and customers have begun to expect it, especially after the pandemic,” says Buzz Carter, SEO manager for online retailer DotcomBlinds. “When everyone has their purse strings tightened, customers really want the option to spread out costs on large purchases without needing to compromise on quality.”

In today’s ecommerce landscape, flexible payments are almost seen as a must-have feature and customers have begun to expect it, especially after the pandemic

Quimby advises due diligence when selecting and implementing alternative payment solutions to ensure this particular customer expectation is met safely: “Of course, there are security and privacy issues to take into account – being able to reassure customers of this quickly and easily is a trend that’s growing apace.”

According to recent data, BNPL schemes are on track to double to 10% of all ecommerce payments by 2024.

“People want to pay how they want to pay and brands are latching onto this,” Quimby continues. “The infrastructure for it isn’t always easy to implement, but it’s an increasing necessity.” 

Trust is vital to successfully implementing alternative payment methods – customers will not be keen to pay via any method if they do not feel secure online.

Andrew Rogers, ecommerce consultant and founder of Rogers & Rogers, advises online retailers to make trustworthiness visible, such as using review scores in prominent places and displaying security signs at payment gateways. He also highlights the importance of transparency in pricing, such as displaying shipping costs on the product page.

When it comes to data collection, Rogers says it is important for engagement and communication to offer customers the ability to sign up but “don’t make people give you all your details on the first date – impulse purchases especially don’t require unnecessary data capture.”

Ultimately, reducing cart abandonment is about making the entire shopping journey easy, convenient, flexible, engaging and glitch-free from the first time a customer uses a website or app.

“To optimise the shopping experience and reduce abandonment rates, retailers must focus on the customer journey,” says Quimby. “This means monitoring usability issues and error rates on new visitor journeys, such as account creation and first-time checkout, and paying special attention to where and why new visitors fall out of the conversion path.”

Payment processes have undergone a radical transformation in recent years, driven by shifting shopping habits and the acceleration of ecommerce throughout the pandemic. While this has helped businesses boost sales, it has also shone a spotlight on a critical issue facing many merchants: online cart abandonment. One way that merchants can address this challenge is by implementing checkout finance. In particular, products that access a marketplace of lenders, such as those offered by Deko, help to ensure that cart abandonment is minimised and more sales are converted. 

Lack of checkout finance options can be costly

Access to checkout finance is increasingly important. For example, a recent Finder survey found that nearly 9.5 million Britons have avoided buying from retailers that don’t offer an increasingly popular method of checkout finance, buy now pay later (BNPL). 

A merchant’s ability to offer checkout finance is increasingly key in attracting customers and driving sales. However, the early generation of BNPL products can often present a ‘one size fits all’ approach suited to particular baskets. In addition, these solutions invariably work with only one lender. This does not guarantee the best results for either merchants or customers, as there is an increased chance that a consumer’s spend request will not be accepted. 

To offer the best chance of consumers being able to complete their purchases, checkout finance solutions need to take a marketplace approach and include multiple lenders, to offer the highest acceptance rates. This means that baskets are much less likely to be abandoned and customers are more likely to be able to buy the products that they want. 

The next wave of checkout innovation is emerging

It is consumer habits and expectations that are driving a fundamental change in checkout finance. Shoppers expect payments to be quick, easy and safe, as well as having financial payment options at the checkout. It is also increasingly important for merchants to create a capability that allows consumers to opt for their preferred financial payment products at the point of consideration, such as the product page, to help ensure a seamless experience.

Next-generation products in the sector will offer whole-of-market aggregation across short-term BNPL options, as well as across higher value and longer-term instalment finance. These will also work with lenders that cover a variety of credit and sector appetites. 

This will elevate payment conversions into the ‘every basket’ promise that is at the heart of Deko’s platform. Deko’s vision to further transform the BNPL market is powered by this innovative multi-lender, multi-product capability. 

Deko’s financial platform offers merchants an attractive solution

Deko’s unique marketplace approach allows consumers to access a wide range of finance providers, which can maximise checkout conversion all at the speed of a click. Put simply, why constrain yourself to one provider, when you can access a wide pool of providers in the same amount of time? This boosts both merchants’ access to finance and customer conversion, helping to ensure that consumers are well served and cart abandonment is reduced. 

Having a panel of lenders with various risk appetites means that Deko’s decision engine can ensure the best match between consumers, merchants and lenders. This has had a demonstrable impact on existing merchants, giving on average a 24% boost to checkout conversion and therefore sales. Importantly, the application process is instant and unlocks immediate purchasing power.

This means that Deko can cover any basket, of any size, anywhere, with products suited to purchases that range from £25 to £25,000. Baskets of greater value tend to suffer higher levels of abandonment, and Deko’s products can help to minimise this and ensure that more purchases are converted. With this capability, merchants can convert more baskets and help more customers connect to the things that they love. 

Deko’s omnichannel platform also provides solutions for in-store, online and mobile payments, meaning that merchants can choose whichever options best suit them. Moreover, Deko’s products are available through one streamlined platform, and can each be integrated into existing operations within 24 hours.

Maximising revenue through better checkout payment solutions 

Supporting merchants is Deko’s key priority, and Deko understands that every business has different requirements in order to maximise its revenues. Deko’s focus is on providing automated solutions that are tailored to the needs of each merchant, their basket ranges and a wide pool of customers in order to reduce cart abandonment and maximise merchant revenue.

Deko is closing the gap through a marketplace approach, using its multi-lender, multi-product platform to ensure that sales gains can continue to be unlocked. At the heart of Deko’s innovation is the capability to aggregate the market to increase acceptance rates. This will be the key to ensuring that merchants are supported in their efforts to capitalise on the rapidly expanding ecommerce industry. 

Financial payment options are entering a new phase of their evolution. Through this next wave of innovation, both merchants and consumers alike will be able to reap significant rewards.

Find out more about Deko's solutions

The rise of flexible payments, moves towards a cashless society, more digital payment options and the omnichannel experience have changed the checkout experience for customers worldwide. Whether the shopper is in store or online, trends that affect the way we pay for goods and services are transforming customer experiences. Today’s checkouts are often unrecognisable from the increasingly distant days of physically handing over notes and coins. According to Fisglobal’s The Future of Payments in Five Charts report, the decline in cash transactions will continue apace, from 20.5% of global point-of-sale transactions in 2020 to 12.7% by 2024. Here are four ways the checkout experience has been transformed. 

1. Alternative payments in tough times

Paying in instalments is not new, but using technology to ease this process has come a long way. The Covid-19 pandemic brought this into sharp focus for many people who experienced financial difficulties – and were then hit with unexpected expenses, such as vet bills or emergency whitegood replacements. The Fisglobal report estimates that by 2024, an estimated $306.8bn of ecommerce purchases will be made via buy now, pay later (BNPL) transactions, an increase from $97.2bn in 2020. The report attributes this to BNPL being an easy way to budget and control finances by managing purchases directly at the point of sale.

2. Creating a brand experience at the checkout

Trust is important for customer retention and loyalty. A famous example is the US’s so-called cola wars in the 1980s, pitting Coca-Cola against Pepsi. While Pepsi briefly overtook Coca-Cola’s sales, Coca-Cola has remained the long-term preferred brand, with GreenBook Market Research reporting that Coca-Cola is still the preferred beverage of 51% of soda drinkers. Brand experience and corresponding loyalty now extend to payment methods. While logos alerting customers about what credit cards are accepted at checkouts are not new, the sheer range of payment options and the expectation that your preferred option will be available is prevalent. In stores, options involving mobile devices, contactless payment cards and BNPL solutions are commonplace, while online payment options have expanded well beyond simply entering card details by keyboard.

Wizz Selvey, retail expert and founder of Wizz & Co, says that creating a brand is especially important for BNPL because “there is more trust in a financial payment provider over a retailer offering the solution – if the BNPL brand is recognisable, it inspires trust.” 

3. Improved marketing and communications experiences

Creating personalised relationships with customers has become vital for brand marketing and communications, with the online checkout a great opportunity to foster loyalty and encourage customer retention. Checkout pages frequently give customers the option of receiving newsletters by email or SMS, offering feedback and entering personal details, such as their birthday, so they can receive personalised offers. Research by Accenture found that 37% of US consumers would be willing to let companies collect personal data via smart devices in return for a better experience or financial reward, while another 37% would subscribe to a service that finds the best pricing details on their behalf and makes purchasing recommendations.

4. Meeting sustainability goals at the checkout

Walking the walk as well as talking the talk has become important for companies keen to ensure they have a reputation for genuine sustainability. Writing on the Forrester consultancy blog, analyst Abhijit Sunil says that the return on investment on sustainability “extends to more than just goodwill”. 

While the enormous growth in online shopping may reduce carbon emissions caused by travelling to brick-and-mortar retailers, manufacturing, packaging and delivery processes may negate carbon savings at the consumer end of the value chain. But at the online checkout, consumers can be given options to make the shopping experience greener. This includes offering more efficient delivery options, such as bicycle deliveries for smaller and local purchases, and selecting reduced packaging or gift-wrapping. The checkout is an opportunity for ecommerce retailers to communicate to consumers about their sustainability initiatives, such as switching to electric vehicle delivery fleets and ensuring a sustainable supply chain.