Three more reasons to use video

Most merchants recognize that there’s a compelling case for developing video content. According to Internet Retailer’s compilations, 72% of the Top 500 merchants have at least one video and 44% of the Second 500 feature video on their sites.

In-depth product demonstrations can satisfy shoppers’ need for information and motivate the add-to-cart, with merchants such as Zappos reporting sales increases of 6-30% on pages featuring video. Video reviews give buyers a new way to weigh in on products, and lifestyle videos provide a compelling demonstration of how brands align with shoppers’ priorities.

But video’s utility extends far beyond these basics — and its importance is only likely to grow with the continued expansion of new shopping formats and networks. To justify expanded investment in video, consider:

Video gives email a boost. Using the word “video” in the Subject: line can boost open rates up to 20%, and video in email can produce a two-fold to three-fold increase in click-through rates, according to the Email Experience Council. The latest wave of email clients, those that support HTML5, enable inclusion of video playback within the body of an email message; animated .gifs or still images that link to videos can also be effective in motivating email engagement, as in this email from American Eagle Outfitters, which has three animated .gifs for lifestyle videos embedded in it.

Video usage example from AE

(Image from the Retail Email Blog)

Video is a preferred format for tablet users. The expanded horizontal layout of the email above is ideal for tablet consumption — no coincidence, given tablet users’ propensity for watching video. More than half of tablet owners report watching video at least once in the past month and nearly 1 in 10 watch video daily, according to measurement firm comScore. With tablet commerce generating , merchants should provide as much content for this new format as possible — with video front at center. Saks has developed an iPad app that puts video front and center with a “video gallery” featuring interviews and how-to fashion advice.

Video example from Saks

Video is catchy for social media beyond YouTube. Merchants can easily syndicate video across social networks, making for compelling content for brand followers. Facebook is the number two video site after YouTube, according to comScore, while eMarketer reports that video is the most popular content type on Google+; and 9% of links posted to Twitter are video clips, eMarketer found. Merchants can extend the life of existing video content — and should also take the opportunity to create custom social video, such as this clip from luxury retailer Burberry welcoming viewers to its Google+ site. Google+ offers the additional possibility of creating video events with its “hangouts” feature — worth exploring as a way to connect loyal followers with brand insiders.

Video example from Burberry

How are you making the most of your investment in video?

How to smooth the cross-screen transition

Ever since mobile devices began gaining traction as a shopping tool, merchants have been preoccupied with how to serve shoppers who cross from touchpoint to touchpoint as they research, consider and buy products.

Much of that mobile optimization has focused on shoppers who move from online research to in-store purchasing, with merchants souping up store locators and, if possible, giving shoppers visibility into physical store inventory.

But new research suggests the extent to which shoppers engage in a whole other range of cross-channel behavior merchants need to address: “crossing screens” from one online touchpoint to another — and specifically from research on mobile devices to purchase completion on laptops or PCs.

revealed that 96% of smartphone users research products on their phones; 32% of those users went on to complete a purchase offline — but even more, 37%, went on to complete the purchase via a computer.

Delving further into that behavior, . One key finding: mobile is the starting point for most cross-screen shoppers, with 65% of them starting on a mobile device. More than half, 61%, move to a PC to continue their shopping journey, while 4% continue the task on a tablet.

So while most merchants consider the eCommerce Web site as the anchor of their brand’s online presence, a substantial base of consumers begin shopping via mobile first — requiring merchants to work harder to engage shoppers on mobile devices and then smooth the transition across touchpoints. To do so, merchants should:

Encourage spontaneity. The lion’s share of mobile shopping occurs on the spur of the moment as opposed to being a planned research and buying task, the study found. More surprisingly, most shopping on PCs or tablets is also spontaneous, with 58% of shoppers saying they looked on their computers for shopping-related information on the spur of the moment.

Data about spontaneous shopping from Google

Merchants should cater to this impulsive behavior by spotlighting time-sensitive offers on mobile sites, such as daily deals, best-sellers soon to be out of stock, and seasonal campaigns. To establish continuity, the promotion should carry across to the eCommerce site, so shoppers who resume their shopping journey on computers can orient themselves and are reassured that the offer is still available.

Outdoor retailer REI promoted its Labor Day sale prominently on its mobile site, encouraging shoppers to “save now” — and then echoed the look, feel and content of the display on its eCommerce site, with expanded text and further incentives to purchase, such as the “2 days left!” banner at top left.

Promotion example from REI

Promotion example from REI

Help shoppers pick up where they left off. Merchants should use all the technology they have available to enable cross-screen shoppers to resume their shopping journey with a minimum of backtracking. Consider adding functionality such as:

  • Email to a friend – and not just for products. Go beyond the capability to email links to individual product pages and allow shoppers to send themselves the contents of their shopping cart or wish list, as well as detailed product information such as warranties or spec sheets.
  • Saved searches and carts. For registered account holders who sign in, the ability to access on their laptop or PC the searches they tried using their mobile devices, along with any items they added to the cart, shortcuts what could otherwise be a frustrating process of duplication.  Amazon offers persistent cart functionality for registered shoppers, with additions to cart on the mobile site reflected on the web browser and vice versa.

Mobile example from Amazon

Shopping example from amazon

How are you smoothing the path to purchase across screens?

Webinar recap: getting the mobile picture

Last week’s webinar on optimizing mobile commerce was jam packed with strategies and advice for meeting shoppers’ expectations for the upcoming holiday season and beyond. One of the biggest takeaways: the importance of thinking visually for the mobile medium.

As stated in the webinar preview post, most mobile shoppers prefer to view brands’ full-fledged Web sites on their devices, rather than streamlined, text-based versions designed for small screens. That desire speaks volumes about shoppers’ preference for accessing bountiful product imaging as well as browsing alluring merchandising offers.

But perhaps more importantly, visually rich mobile sites stand brands in good stead with potentially the most lucrative of mobile audiences: tablet shoppers. The webinar revealed that  – a fivefold increase. Moreover, tablet owners form a potentially lucrative market; more than one in three consumers earning more than $75,000 per year owns a tablet, according to the Pew Internet & American Life Project.

Most importantly, the larger screen size makes mobile purchasing a more appealing prospect, as shoppers can more easily navigate products and cart and checkout screens than on a smartphone. As a result, – 3.2% of all web sales, compared with 1.5% for smartphones. And conversion rates are more than twice as high on tablets than on smartphones. Merchants should cater to tablet users’ abilities to use gesture-based interactions, such as taps, swipes and zoom, to view rich visuals.

Statistics on smartphone and tablet commerce from Forrester Research

To incorporate more visuals into their mobile commerce offerings, merchants should not only offer multiple images on the product page; they should also use pictures to convey the brand story throughout the mobile site. Just a few ways to beef up the visuals:

Navigation.  Gone are the days when navigating a mobile site meant layers of text-driven menus. Use images or icons in the lineup of product categories to help shoppers scan and locate the relevant section, as Cabela’s does with the start page for browsing products by category.

Mobile example from Cabela's

Home and gateway page promotions. Devise a design that includes space for spotlighting products and offers with a primary large image. And maximize screen real estate with “swish merchandising” — swipeable scrolling features such as the “Best Sellers” promotion on HSN’s “Home Décor” gateway page, which elevates a group of bestselling products to prominence.

Mobile example from HSN

Index pages and search results. Give shoppers the option to view product listings in an image-rich format that puts pictures front and center and fits more items on each screenful. Athleta’s “images only” option eliminates price and product name from listings, allowing shoppers to scroll through items quickly and tap for more information when desired.

Mobile example from Athleta
Mobile example from Athleta

Download the webinar replay or the accompanying whitepaper for more strategies and statistics about mobile commerce. What tactics are you using to create a rich mobile experience?

Webinar preview: optimizing mobile for the holidays and beyond

As we noted at the beginning of this year, mobile should be a top priority for merchants of every stripe. After all, the rise of mobile technology has revolutionized shopping; thanks to the ubiquity of mobile devices, shoppers now expect a seamless experience from site to store and in between, with mobile bridging touchpoints as well as functioning as its own stand-alone shopping destination. Mobile users will make $10 billion of purchases on their phones this year, according to industry researcher Forrester — 3% of all online spending — and that revenue figure is set to more than triple by 2016. And beyond those who actually make purchases on mobile devices, there are still more consumers whose shopping journey begins on a mobile device and ends with a purchase elsewhere. According to research from Google, , while 37% have gone on to make purchases via their computer Web browser and 32% finalize the sale in physical stores .

The numbers suggest catering to mobile shoppers is a must — but it’s also a steep challenge. Consumers prefer a rich shopping experience, even on their mobile devices; when asked by Forrester how they preferred to interact with brands on the go, – not a pared-down mobile version. Especially for small and medium-sized merchants, the prospect of meeting this expectation for a full-fledged shopping experience for mobile devices alongside the full eCommerce site is especially daunting.

Data about mobile shopping from Forrester Research

But now is the time for merchants to rise to the challenge — especially with the holiday season looming on the horizon, when shoppers will research intensively and cross channels freely to complete purchases. The good news is that merchants already have a roadmap for mobile optimization: they can apply proven best practice from their years of eCommerce success to the mobile environment to focus and prioritize their efforts.

This approach doesn’t mean that merchants can simply port over their eCommerce site to a smaller-screen format — but it does mean that tried and true principles of usability, credibility and cross-channel service still apply in the mobile world. By adapting these concepts to the mobile medium, merchants can create effective, relevant mobile offerings that connect with customers and win sales.Four guideposts to start with:

  • Know your audience to choose the right platforms and build the unique mobile features that will resonate best with your potential customers
  • Offer multiple pathways to purchase so shoppers can discover relevant products and content
  • Earn customer trust by addressing privacy and security concerns
  • Bridge touchpoints with features that link shoppers across the brand

Tune in to tomorrow’s webinar to explore each of these topics in-depth — and meantime, let us know: what best practices have you successfully implemented for mobile?

A tool for turning “showrooming” to your advantage

QR codes are just about everywhere these days. According to the Multichannel Merchant Outlook 2012-2013: eCommerce survey and report, t compared with last year. Fully 47% of merchants are using QR codes now, compared with just 8% a year ago — a more than four-fold increase.

The survey revealed that the majority of participants used QR codes in direct postal mail pieces, perhaps as a means of qualifying for summer price breaks on offer from the U.S. Postal Service for mailers that include QR codes. Printed catalogs were the top means for sharing QR codes, used by 63.2% of those survey respondents using QR codes.

Data on QR code usage from MultiChannel Merchant

But although it may not buy them a price break at the postage meter, another use for QR codes is just as vital, not to mention potentially profitable. For merchants with physical store locations, QR codes can help combat “showrooming,” — the practice of using bricks-and-mortar outlets to see, touch and try products before using mobile devices to seek the lowest price online, often from a different brand.

While “showrooming” behavior is believed to hurt bricks-and-mortar merchants, the ability to access online information that complements the in-store experience can be a boon to shoppers, and has the potential to help drive in-store sales. In fact, new data from Deloitte suggests that consumers’ in-store mobile activities are contributing to, not taking away from, in-store sales: smartphone shoppers are 14% more likely to convert and make a purchase in the store than non-smartphone users, according to the study.

QR codes are a powerful way way merchants can swing in-store research behavior in their favor. Because they lead to a specific piece of content, QR codes can help merchants direct shoppers well beyond basic product research to in-depth information that supports the purchase decision.

As we pointed out early this year, it’s crucial to consider QR codes as part of a larger mobile strategy; if you don’t have the basics of mobile commerce in place, it’s probably better to tackle them first before leaping to offer QR codes throughout stores. But if your mobile house is in order, QR codes could be a worthwhile addition to the arsenal, especially with the holiday season coming up. Consider using QR codes to:

Spotlight expert advice and how-tos. Content that demonstrates how items on store shelves can be put to use helps motivate purchasing. The Gap used a QR code to link in-store shoppers to styling advice for a new line of trousers, along with customer reviews.

QR code example from Gap

Link to buying guides and product comparisons. Help shoppers faced with an array of products sort through the options by using a QR code to link to detailed comparisons and recommendations. For the coming holiday season, adapt gift guides to the mobile format and make them available to store shoppers via QR code.

Offer exclusive in-store deals. As an incentive to purchase immediately in stores, consider offering discounts via QR code. To keep the discount offer from breaking your budget, limit it to selected products or set the coupon code to expire within a short time frame — such as within the hour.

Create affinity with the brand and other customers. QR codes can connect in-store shoppers with the community of brand followers, thereby demonstrating how the products on offer fit with shoppers’ lifestyles. Outdoor retaler REI invites in-store shoppers to see how other members of its loyalty club are spending their annual dividend through a QR code displayed in-store — thereby showcasing the brand’s community as well as its selection of products.

QR code example from REI
Are you planning QR campaigns for the coming holiday season? How are you using QR codes in-store to help drive purchases?

Webinar recap: The language of search

Last week’s webinar took a deep dive into the topic of on-site search — the crucial feature that drives one third of eCommerce revenue, according to the MarketLive Performance Index. As discussed in our prior post, most merchants recognize the need for improvement with on-site search to boost relevance and generate even more sales using this potentially versatile tool.

While the webinar covered a range of topics, from determining whether faceted search is right for you to best practices for mobile search, there was an overarching theme — the importance of context and language. The on-site search tool shouldn’t merely generate a page of product listings as a results set; rather, on-site search should orient users to how the results set was generated, guide them to options for narrowing or expanding the range of products they view, and even suggest non-product content as an alternative. In particular, on-site search should:

Prominently place spelling corrections. Users now expect search mechanisms to assist them with alternatives for commonly-misspelled terms, and account for errors from shoppers using tablets and smartphones that rely on tapping rather than typing – such as hitting letters adjacent to the intended target. Spell out the alternatives clearly in prominent type, as Helzberg Jewelers does with its spelling correction feature. Shoppers can click any of the alternate terms or browse top probable matches.

On-site search example from Helzberg

If an automatic redirect is used, explain it. Whenever the on-site search tool overrides the usual functionality, shoppers should be alerted to that fact with a prominent flag. For example, if shoppers enter a term that returns just one match, then many search tools are set to link directly to that product rather than displaying a nearly empty results page — but a special flag should appear so shoppers know why they landed there. Similarly, if a term exactly matches a product category, it’s fine to link directly to that category — but give shoppers the option to see items in a search results set instead, as Sears does with its food processor page. The message highlighted in yellow lets shoppers know they’ve been redirected, with the option to view result without the redirect.

On-site search example from Sears

Maximize the communicative value of facets. We’ve all been on sites whose faceted search tools complicate, rather than simplify, the product discovery process. To avoid overwhelming shoppers, it’s crucial to fine-tune faceted search so the tool communicates effectively and efficiently. Merchants should:

  • Use data to create a usable set of facets. Study existing internal search logs to determine which product attributes shoppers already search for, and what keyword terms they use – don’t assume insider industry terms are commonly used by consumers.
  • Display the number of product matches for each attribute, so shoppers don’t have to select each to see how many results are available.  This addition is especially important in the mobile environment, where shoppers receiving a large results set will invariably rely on facets to zero in quickly on the right products. Outdoor retailer REI’s mobile search returns the same full results set as on the eCommerce site — but gives shoppers drop-down options along with the number of matches for each for a quick shortcut to a more manageable list of products.

mobile on-site search example from REI

Highlight the availability of non-product content. Customer service content such as shipping information, buying guides and lifestyle content should all be searchable — and the on-site search results page should offer clearly-labeled links to that content alongside the products that match a shopper’s keyword terms. Online jeweler Blue Nile uses the heading “Education and Guidance Results” to set off its rich content from the results set — easing access for shoppers who need more information before selecting products.

on-site search example from Blue Nile

Download the Webinar replay and whitepaper for more on-site search strategies. Meantime, how have you tweaked your on-site search presentation and functionality to better orient shoppers?

Webinar preview: Optimizing on-site search

For the third installment in our optimization series, after analytics and content, we’re taking a deep dive into on-site search. The topic may seem a bit staid; after all, site search is the workhorse of eCommerce site features, so commonplace it doesn’t grab headlines or generate hype. But on-site search does have the potential to drive serious revenue, especially during the upcoming holiday season.

Consumers increasingly expect speed and relevance when they shop online. Fully 73% of shoppers will exit a site if they don’t locate what they seek within two minutes, according to search specialists SLI Systems.  Site search can meet and exceed this high standard, delivering a tailored results set that allows shoppers to sort through products according to their priorities.

Moreover, site search can act as a vital link to a brand’s product offering as shoppers roam across channels and devices. Industry researcher Forrester estimates that 36% of all purchases  – not just eCommerce site purchases – are now influenced by online activity, whether through eCommerce orders, in-store purchases influenced by Web research, mobile shopping activity, or social networks. A robust search toolset can deliver relevant information tailored to the touchpoint.

Survey data from industry researcher Forrester indicates that merchants are aware of this potential gold mine – and their need for improvement. The majority of businesses reported their on-site search initiatives were only moderately successful, with just 1 in 5 rating their efforts 8 or higher on a 10-point scale.

Site search data from Forrester Research

The Forrester survey found that the top area businesses identified for improvement with on-site search was improving relevance – connecting shoppers more efficiently to the products that meet their needs. Tomorrow’s Webinar will provide merchants with essential strategies for optimizing on-site search across touchpoints, including:

  • How to decide whether faceted search is a fit. It’s now commonplace for Web users to parse through extensive search results sets with a few clicks of the mouse, selecting for those attributes that matter to them. This type of dynamic search results display – called “faceted search” – enables shoppers to define their personal path to purchase by filtering the results and in essence creating a personalized, targeted category custom-built for their needs. Implementing such a tool to make it as powerful as possible requires an investment in time and resources – but given the potential revenue gains, every merchant should consider whether faceted search is a fit for their business.

  • Best practices for mobile site search. Tailoring search functionality for mobile users is now a merchant must. Not only does industry researcher Forrester predict shoppers will transact purchases worth $10 billion via mobile devices this year, but mobile is becoming an essential research tool for shoppers who go on to buy either at physical locations or via the eCommerce Web site. During last year’s peak holiday season, for example, more than one in 10 shoppers used a mobile device to visit a merchant’s Web site on Cyber Monday, compared to 3.9% of shoppers in 2010 — a more than 175% increase – and the numbers are only expected to climb this year.

Register for the Webinar now and tune in tomorrow at 10 a.m. Pacific to hear about these topics and more. Meantime, what on-site search strategies have worked for your business?

Christmas in July: What to do now for holiday success

Now that the Fourth of July is in the rearview mirror, the end-of-year holiday season looms on the horizon — and for merchants, the stakes couldn’t be higher.  Industry researcher Forrester estimates that from 2005 to 2011, online purchases have increased from 5% to 12% of total retail holiday sales — a 140% increase — and the growth trend is set to continue.

With so much at stake, merchants have been developing their fourth-quarter strategies all year and implementing the technology upgrades they need to remain competitive. While now is probably already too late to add to the list of major new features to devise, deploy and test before the holiday kickoff, there are a variety of site tweaks and marketing strategies merchants can undertake to maximize their chances of holiday success. Top priorities:

Run the numbers on season-long free shipping with no threshold — or formulate alternatives. Painful as its impact on the bottom line is for merchants to contemplate, free shipping with no threshold is a consumer favorite. In the 2011 MarketLive Consumer Shopping Survey, conducted just prior to the holiday season, 45% of participants said high shipping costs prevented them from buying more gifts online, and unconditional free shipping was the top-rated promotion shoppers said would influence their purchase decision.

Because of its popularity, a handful of large brands now offer free shipping with no threshold year-round — upping consumers’ expectations still further. For most merchants, even offering it for the duration of the holiday season is an expensive proposition — but it’s worth contemplating for the competitive advantage it could afford your brand.

If you can’t offer free unconditional shipping for the duration of the season, consider offering it in small doses, such as:

  • On red-letter shopping days. Black Friday, Cyber Monday, “Green Monday” (the second Monday in December) and Free Shipping Day to start.
  • For limited time frames within a single day, such as night-owl, early-bird or lunch-hour specials.
  • For loyalty club members only, or for customers with a high lifetime value.

Bedding company Cuddledown put a wry spin on a weekend-long shipping discount last year, saying “just please don’t tell our boss” that free shipping with no threshold was on offer.

Holiday offer example from MarketLive merchant Cuddledown

Beef up content. Offering holiday shoppers deep, relevant content can instill trust and help guide their gift purchases. In particular, in preparation for the peak season merchants should beef up content that helps shoppers:

  • Research. Forrester estimates that in 2011, fully 36% of all purchases – not just online purchases – were influenced by the Web in some way, with product and brand research leading the list of online shopping behaviors. Merchants should provide a robust content toolset to assist potential gift buyers with their research.
  • Find gifts. Buying guides, product demonstration videos, and categories for top-rated items all help shoppers connect with the products that are just right for recipients on their list.
  • Get help. Building comprehensive information to assist shoppers with their purchase decision demonstrates the credibility of the brand. And during the frantic holiday season, when shipping costs and delivery deadlines take center stage, robust customer service content is more important than ever.
  • Discover new pathways to purchase. In addition to providing fodder for consumers conducting product research, lifestyle content such as blog posts and articles can help boost merchants’ SEO rankings for non-branded terms, potentially bringing new audiences to the brand, as the graphic below illustrates.

MarketLive chart showing new pathways to purchase via lifestyle content

Add as much cross-channel mobile capability as you can support. Mobile research is likely to be prevalent this holiday season; last year, according to IBM Coremetrics, more than one in 10 shoppers used a mobile device to visit a merchant’s Web site on Cyber Monday, compared to 3.9% of shoppers in 2010 — a more than 175% increase.

To cater to such behaviors, merchants should amp up their mobile offerings to include as much information about in-store activities as possible. In-store inventory integration is the ideal, but information that’s simpler to provide is also helpful to shoppers. Be sure to feature:

  • A robust, up-to-date store locator. Make sure your store locator is set to display holiday hours, local phone numbers and integrated mapping for easy access to turn-by-turn directions.
  • The skinny on store events and services. Special sales, in-store demos and gift wrap services are all relevant for holiday shoppers on the go.
  • Information on in-store pickup. Help connect online and offline touchpoints with prominent links to information about store delivery of items purchased online.

What holiday strategies are priorities for your business?

Top connected commerce priorities: Inventory and fulfillment

Most merchants understand the concept of connected commerce — providing a seamless shopping experience across channels and devices. But for merchants working with limited budgets and clunky standalone technologies, the goal can seem overwhelming and elusive.

New research suggests that inventory and fulfillment integration tops the list of consumer priorities. In a talk at this year’s Internet Retailer Conference and Expo, Lauren Freeman of The eTailing Group revealed results of a consumer survey that found . Specifically, consumers rated the following features as important influencers of their purchase decisions:

  • Not surprisingly, nearly two-thirds of online shoppers — 62% — wanted the ability to have items purchased online delivered to their homes.
  • But more than half of shoppers rated as important the ability to get the product within a day or two. Depending on the cost and availability of expedited shipping, for some shoppers the only way to meet this criteria is through in-store pickup or purchase.
  • Fully 45% of shoppers wanted to know whether items researched online were available to purchase locally at a physical store.
  • The ability to purchase online and pick up in store was rated as important by 33% of shoppers.

The upshot? For merchants still struggling to begin integrating business processes, inventory and fulfillment should top the priority list. Furthermore, those who already offer such capabilities should highlight them as a differentiator. Just over half of merchants offer in-store pickup for items ordered online, according to a new multi-channel report from RSR Research — and the percentage of merchants offering in-store returns of items ordered online has dropped compared with 2011.

Data about cross-channel integration from RSR Research

To promote delivery flexibility and inventory visibility, consider the following tactics:

Put the emphasis on speed and savings. Most merchants offering in-store pickup position it as a free alternative to home delivery — a factor worth highlighting, given that most shoppers seek savings on shipping costs. In addition, merchants who can promise instant availability in stores should promote speed as a benefit so that shoppers understand they won’t need to wait for an item to be delivered to their local outlet. Sears promotes instant in-store availability in a global promotional banner which promises shoppers can “get it today with free in-store pickup.” The product page drives the message home with a tabbed display that highlights free in-store pickup along with current free home delivery offers.

In-store pickup promotion from Sears

 

In-store pickup example from Sears

Don’t forget mobile. The ability to view in-store availability and flexible delivery options is especially important for shoppers on the go, so  put in-store inventory and pickup front and center when designing your mobile commerce offering. Walmart gives “Find in store” equal footing with the “Add to cart” button on the mobile product page as well as displaying in-stock status and the ability to select free shipping to stores for online orders. Clicking “Find in store” displays inventory levels at stores within a 50-mile radius of the shoppers’ current location, with a link to store directions listed along with the phone number and item number.

Inventory example from Walmart

 

Have you integrated in-store inventory and cross-channel fulfillment into your eCommerce site and mobile offerings? If not, what’s holding you back? If so, how do you promote the service?

 

3 new reasons to use alternative payments

Alternative payment services such as PayPal, Bill Me Later and Google Checkout are now commonplace on eCommerce sites, with good reason. Industry researcher Forrester estimates that fully one in five eCommerce transactions are completed using alternative payments, reaping merchants $64 billion in U.S. sales. That percentage will grow to nearly one in four — 23% — in the next four years, Forrester predicts. It’s not surprising, then, that when we surveyed checkout processes last fall, nearly 60% of the largest U.S. merchants already used alternative payments.

While the prospect of implementing a new payment process may cause logistical headaches, we believe merchants should make the project a priority. Alternative payment options smooth the path to purchase for Web shoppers — and new research suggests alternative payments are crucial for expanding into new channels and markets. Alternative payments:

1. Facilitate mobile buying. In a study of mobile purchases made over the past two months, 67% of those transactions were completed using an alternative payment system versus a credit card, according to a study from eCommerce provider ShopVisible. By giving shoppers a way to avoid entering credit card payment details, alternative payments help overcome two top barriers to mobile purchasing:

  • Convenience.  In the 2011 MarketLive Consumer Survey, conducted prior to the holiday season, the top reason shoppers gave for not making mobile purchases was “shopping is still too awkward on my phone” — an opinion shared by 37% of survey participants. Alternative payments help speed the purchase process.
  • Security. Nearly one-third of consumers are anxious about sharing credit card information over their mobile networks, the MarketLive Consumer Survey found. With alternative payments, shoppers need only enter a username and password, and their financial information isn’t shared.

To reassure mobile shoppers who are hesitant to become mobile buyers, merchants should highlight the availability of alternative payments within their mobile shopping environments, as MarketLive merchant Armani Exchange does on the home page and category pages within its mobile site.

Alternative payment example from Armani Exchange

2. Appeal to international customers. For merchants casting an eye toward the rapidly-growing European eCommerce market, alternative payments are a must. PayPal is used by half of online shoppers in the U.K. and Germany, and by 40% of European online shoppers overall, according to Forrester.  U.K. mass merchant Argos highlights its PayPal service on the eCommerce site home page in a promotion messaging “easy online shopping.”

Alternative payment example from Argos
3. Connect online and offline purchasing. With 15 major merchants now planning to use PayPal at physical store point-of-sale terminals, alternative payments are becoming a means for consumers to make purchases wherever they roam. Such integration creates a seamless shopping experience for buyers, while for merchants, the ability to track purchase data across channels and devices helps build a holistic profile of customer behavior.

How are you promoting alternative payments? If you haven’t yet adopted alternative payment systems, what’s holding you back?

 

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