Luke Griffiths, general director at Klarna UK, discusses how the online consumer journey has shifted with the torrent of new technology and how retailers can streamline the buying process and stay ahead of the competition
Retailers today are facing an increasingly challenging marketplace. The way that consumers shop has changed vastly in the past decade, enabled by technology. The boom in e-tail has also fuelled by a new generation of consumers who demand optimum convenience.
Gone are the days when competition was limited to business hours and local shops. Instead, products today can easily be bought 24/7 from merchants located anywhere in the world.
As a result, e-tailers from all sectors face increasing pressure to provide consumers with a perfect, streamlined path to purchase.
The online shopping journey
But what exactly goes into building a great online shopping journey? To help determine what drives and influences e-commerce, Klarna, an online payments and consumer finance provider, recently conducted a consumer survey of 2,000 UK electronics goods shoppers.
The research revealed that consumer electronics were the second most popular item to buy online, having been purchased by 71 per cent of respondents.
While online shopping continues to grow in popularity across sectors, consumer demand for richer experiences and greater convenience is constantly rising. So despite the high rate of electronic products already being purchased online, we urge e-tailers to regularly review and update the customer experience to stay a step ahead of the competition.
One element that is key is logistics. Our research shows that logistics were an important consideration for many shoppers – free returns policies (29 per cent) and easier delivery options (28 per cent) were two key areas that those surveyed felt would make shopping online for consumer electronics easier.
Frictionless checkout and payment choice
The checkout is another important stage in the online customer journey. In fact, 40 per cent of electricals shoppers have abandoned a purchase online because the checkout process took too long.
It’s clear, then, that a seamless customer checkout has the ability to significantly boost conversion rates and help prevent dropped baskets.
One aspect that consumers purchasing electronics agreed on was that the lack of flexible financing on offer can be a massive turn-off. We found that customers today expect a variety of payment methods to match their circumstances at the time of purchase. Significantly, 80 per cent of millennials said they had to save for several months before they can buy a new consumer electronics item. A further 65 per cent of 16 to 34-year-olds said they struggled to afford the latest products and would like the option to pay in instalments, or pay later, to help them buy new CE goods.
Customers range in age and circumstance, which plays a huge role in their purchasing decisions – particularly if we’re talking about big-ticket items. The way we shop for larger, more expensive products is substantially different from the way we buy smaller, cheaper items.
As a result, merchants must integrate flexible payment and checkout services that are specifically designed to drive online conversion and smooth the consumer journey from start to finish – particularly via mobile, which is where increasing numbers of electrical consumers are doing their research.
Options that allow shoppers to pay after delivery, or in monthly instalments, are sure to appeal to consumers and help cement their loyalty to a particular retailer. Those that do not offer this flexibility are essentially turning away customers at the final hurdle and risk losing out to their competitors.
With Christmas just around the corner, it’s a crucial time to attract new customers and give them an optimal customer journey.
Staying ahead of the competition
Although the digital revolution hasn’t altered the fact that consumers still experience the same stages of awareness when shopping – consideration, conversion and evaluation – the journey itself has changed. Instead of a path to purchase that is traditionally linear, consumers are moving back and forth between stages.
To smooth the checkout flow and optimise conversion rates, retailers need to understand their customers’ needs and adapt accordingly. Building a frictionless online user experience represents a huge commercial advantage and is crucial to driving profitable growth and consolidating the consumer/seller relationship.