Streamline checkout to reduce cart abandonment
As a tax compliance software company, Avalara works with retailers to improve their sales tax management and enhance their customers’ overall experience. To better understand that experience, we commissioned business intelligence platform PSFK to examine different aspects of the purchase journey. The resulting report highlights insights from thought leaders as well as Avalara customers and partners.
PSKF learned there are essentially five states of the customer journey:
- ‘Store’ experience
- Shopper education and assistance
- Payment and tax
- Fulfillment and support
This article explores how payment and tax affect shoppers’ overall experience — and how financial software offers improvement.
Offer a one-click option
Anyone who’s ever shopped at Amazon understands the appeal of “buy now with one click.” There’s no need to fumble for a credit card, no need to find the right password. You see it. You want it. You buy it. Bam.
The numbers underscore the benefit of providing a one-click option. Nearly one in three internet shoppers* say a quick and easy checkout option motivates them to buy a product. And 87% of online shoppers will abandon their carts when checkout is complex.
Some payment options cater to certain sales channels. For example, Facebook Pay can be used to purchase through social networks like Facebook and Instagram as well as to transfer money to friends. Visa Token Service and the checkout services startup Fast are ideal for mobile sales.
Let consumers layaway
Flexible payment plans that allow consumers to buy now but pay later or over time — like digital layaway services and split payment options — can increase both conversion rates and the value of the purchase. Companies that offer these programs have seen checkout conversions increase by 30%, and average order value jump by 58%.
For example, Samsung and financing platform Klarna joined forces to provide several options for Samsung customers, including “buy now, pay in 30 days” and “spread the cost up to four years.” Klarna is also an easy way for Samsung users to pay for mobile upgrades.
Don’t be bound by borders
Nearly 60% of online shoppers take advantage of the global marketplace to make cross-border purchases. There’s a world of opportunity out there for American companies: Nearly 85% of the world’s purchasing power is based outside of the U.S.
Yet selling across international borders brings unique challenges beyond currency conversion. Cross-border sellers need to navigate the Harmonized Tariff System, which uses HS codes to identify merchandise sold internationally. Each product must be assigned the proper code to ensure the proper customs duty and import taxes are assigned.
Here again, technology can streamline the process. For example, the payment platform BlueSnap supports local currencies and languages, and provides one-click checkout. And Avalara Item Classification helps businesses identify the proper HS codes for all products, making it easier for them to comply with customs regulations worldwide.
Optimize the shopping cart
Unexpected costs at checkout often lead to cart abandonment. In 2019, 53% of shoppers cited unanticipated fees, shipping, and tax as a main reason for canceling a purchase. Streamlining checkout so there are no surprise charges and following up with customers who abandoned carts can help close deals.
For example, the ecommerce marketplace Shopify added the peer-to-peer payment method Venmo as a checkout option for merchants. Consumers that frequently use Venmo are less likely to abandon their cart when they recognize the familiar option. Similarly, PayPal has partnered with mobile app Honey to build product discovery, price tracking, and special deals into checkout.
Streamline both sides of a transaction
Automation technology enhances the experience both for consumers on the front end and retailers on the back end. It can improve accuracy and security while streamlining checkout.
Find more insights in the Digital Commerce Playbook.
*All statistics come from the report.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
Stay up to date
Sign up for our free newsletter and stay up to date with the latest tax news.