Written by Tony Parker, UK Customer Intelligence Lead at Forter
During peak shopping seasons, retailers have their work cut out for them in the fight for customer wallets. While steep sales and fun advertising can bring customers in, a poor customer experience (CX) can quickly turn them away.
Consumers put a premium on a seamless online shopping experience – they expect speed, convenience and ease. Unfortunately, consumers aren’t getting the friction-free experience they deserve. In fact, according to Forter’s Consumer Trust Premium report, more than 73% of the 1,000 UK consumers surveyed suffered a negative online shopping experience in previous months.
With stiff competition, especially online where consumers have access to hundreds of retailers at their fingertips, merchants must provide a frictionless and frustration-free shopping experience.
Offering Superior End-to-End Customer Experience
Many merchants (for obvious reasons) prioritise and invest heavily in customer acquisition – how can we bring more shoppers to our site? While that makes good business sense, the often missing link is ensuring merchants keep those customers through checkout.
One of the easiest ways to lose shoppers is by filling the checkout process with friction. Over three-quarters (77%) of consumers surveyed said they would abandon their cart if the checkout process was too complicated. So, what does a complicated checkout experience look like?
● One-time passwords (OTP), typically sent via text message, can be a major annoyance and deterrent for shoppers. People might not have their phones close by or be wary about giving their numbers to a retailer.
● CAPTCHAs, which require shoppers to complete an audio-, image or text-based “test” to prove they aren’t a bot, are another arduous hurdle.
● Requiring a shopper to create an account in order to checkout is one step too many for some customers. Forter’s first-party data found that mandating account creation can cause, on average, 3-5% of consumers to drop off.
While these roadblocks are intended to enhance security or thwart fraudulent transactions, they do so at the expense of customer experience, leading to higher rates of cart abandonment. The result is a potential loss in the customer’s lifetime value, emphasising the importance of minimizing friction in the checkout process.
Falling at the final hurdle
If shoppers are able to make it through the checkout gauntlet, their buying journey may end with a false decline. Thirty-five per cent of UK shoppers said they had been wrongly declined when making an online purchase.
With many new shoppers venturing into digital commerce, retailers often turn away new — but trustworthy — customers simply because they’ve never encountered them before. Forter’s first-party data revealed that false declines are typically five to 10 times higher than actual fraud. In fact, Forter estimates that for every $1 retailers lose to fraud, they forfeit $30 by declining legitimate consumers.
A lack of data and insight ultimately leads to false declines instead of an opportunity to secure the customer’s lifetime value.
Trust goes both ways
Despite being in a heated competition for consumer wallets, merchants are unknowingly turning away good customers by creating bad experiences. But, why is this? Poor customer experience is often the result of a lack of trust.
Because retailers aren’t able to accurately assess the trustworthiness (and identity) of consumers visiting their sites, their fear of fraud leads to unnecessary friction, abandoned carts, false declines and lost revenue.
How can retailers turn the tides? They need a better – faster and more seamless – way to assess who is behind every transaction so that trustworthy customers get a great experience every time fraudsters are blocked. Retailers must move beyond manual, reviews-based fraud prevention and implement smarter systems that pattern match thousands of attributes across billions of identities, delivering a simple approve/decline decision on all digital commerce transactions. Doing so will ensure merchants can fight fraudsters and delight customers at every interaction — from account creation and checkout to loyalty programs and returns.