Online businesses are grappling with a pervasive problem that costs them sales: the abandoned shopping cart.
A recent report titled “How Preferred Payment Availability Can Reduce Cart Abandonment” by PYMNTS Intelligence sheds light on the challenge faced by online marketplaces, retailers’ sites and brands’ sites: Consumers frequently abandon their shopping carts. The February 2024 report, explores how online shopping preferences influence customer engagement.
It suggests that the answer to boosting conversions could be as straightforward as offering the correct payment options, as digital-first consumers expect access to their preferred payment method at checkout and may abandon purchases if it is unavailable.
The data underscores the role of payment method availability in consumer choices. Seventy percent of consumers consider the availability of their preferred payment method very or extremely influential when deciding where to purchase online.
While online marketplaces lead, with 53% of shoppers finding them best at offering preferred payment methods, only 22% say the same about brands’ websites. This disparity may explain why brands’ sites recorded an average of eight cart abandonments in the last 30 days, which is 20% more than retailers’ websites. The findings highlight an imperative for brands to improve their payment experience to enhance consumer engagement.
The report provides several key insights into consumer behavior:
- Payment method availability profoundly impacts store choice: 70% of consumers deem the availability of their preferred payment method “very or extremely influential” when selecting an online store. Online marketplaces are seen as the best online option for offering preferred payment methods by 53% of consumers, much more than the 22% who hold this view for brands’ websites.
- Brands’ websites experience higher cart abandonment: Consumers abandoned carts on brands’ sites an average of eight times in the last 30 days, 20% more frequently than on retailers’ websites (six times) and slightly more than on online marketplaces (seven times). This trend is attributed to brands being less likely to offer consumers their preferred payment methods.
- Generational differences in shopping behavior: Millennials lead in cart abandonment, averaging five abandoned carts in the past 30 days, followed by Gen Z at four, while baby boomers and seniors averaged less than one. This suggests younger consumers often browse or comparison shop, holding items in carts, whereas older generations are more likely to complete a purchase once they go online.
Beyond payment preferences, the report also delves into other factors influencing online shopping behavior. It found that consumers consistently seek the best deals and a frictionless payment experience across all online platforms. While the number of payment methods matters, the availability of the preferred option is paramount. Consumers tend to frequent platforms where they believe they can find favorable deals, such as online marketplaces for electronics (48% preference) or retailers’ sites for groceries (44% preference).
The highest rates of cart abandonment were observed in the clothing and accessories category, particularly among millennials and Gen Z, who abandoned five times more carts than older generations in this segment. This suggests that simplifying the payment process is a crucial strategy to reduce abandonment and build loyalty, especially among younger consumers, while effectively managing multiple payment options often requires a robust technology solution.
