Online shopping

These payment hurdles are obstacles to success

Many furniture retailers underestimate the payment process as a factor in online shopping. But creating hurdles means lost sales.

Jun 12 2020

The new bedroom cupboard has been chosen; the delivery terms are fine. Now all there’s left to do is pay. But the online store offers just two ways to settle the bill – and the information about them is insufficient and long-winded. The customer is confused and starts to rethink the whole thing again. Maybe there’s a better solution available from the competition? In this case, it’s not just this sale that has been bungled – the business may have lost the customer, too.

This is not an isolated case: The payment process is one of the biggest hurdles in online shopping. Because when it comes to money, consumers take things very seriously indeed. Security, simple processes and the largest possible choice of options – this is what they expect from an online store today.

This means that constantly adjusting payment systems for online purchases is essential for the furniture industry, too. Companies that refuse to get on board with the latest developments in this field are missing out on a lot of sales – it’s almost like accepting cash only in a bricks-and-mortar store. 

The numbers speak for themselves

But what really matters when it comes to payment processes? A recent study by ibi research at the University of Regensburg on payments as a success factor provides valuable insights. The study surveyed end customers in Germany and examined the state of the art in payment methods. These are the most important findings from the study:

  • The majority of online shoppers currently prefer four payment methods: PayPal, invoice, credit card or direct debit are the most popular ways to pay for 95 per cent of respondents. 
  • Right at the top of this list is PayPal, followed by payment by invoice.
  • On the other hand, there are many purchasers who reject particular payment methods from the outset. 
  • If their preferred payment process isn’t offered at the checkout, many purchasers will simply abandon the online purchase. 

So what do the authors of the study recommend? Offering the widest possible choice of payment methods is one way to stop buyers from switching to the competition. If a customer absolutely wants to pay by credit card, but payment by PayPal or by invoice are the only options offered, they’ll quickly get annoyed.

The problem: Habits are constantly changing because new payment methods are being introduced all the time or consumers suddenly change their preferences and adopt a different process. This is yet another reason for following the principle of having a wide selection of payment methods – the faster companies adopt new options, the likelier it is they’ll be able to please more customers. 

The furniture industry: the bigger the bill, the trickier the problem

There’s one point that is crucial for the furniture industry: When it comes to choosing a payment process, the amount of the invoice is an important factor. Payment in instalments or by invoice are preferred over PayPal for larger sums. For furniture retailers, whose products are typically over the Euro 100 mark, not offering these methods means they are taking a risk. 

German retailers are losing Euro 4.6 billion in physical and online stores each year because they don’t offer the preferred payment methods according to calculations by payment provider Adyen. But not providing a particular payment method isn’t the only factor that can have a major impact. Flaws in the payment process can also reduce sales: Endless drop-down menus (for credit card expiry dates, for instance) can annoy customers just as much as not being told where they can find their Card Verification Code (CVC) on their card.

This was one of the findings by technology company Stripe. The big providers are by no means immune to mistakes: The researchers found that two-thirds of the 100 largest e-commerce websites display at least three of these kinds of flaws. Payments on mobile devices may work well in principle, but the devil is in the detail: If the website or app hasn’t been optimised for inputting numbers on smartphones and tablets, customers can get really frustrated. 

What can online retailers do?

The recommendations are clear:

  • They should offer the widest possible choice of payment methods and adopt new processes such as Apple Pay or Amazon Pay as an absolute must. 
  • Eliminate errors or flaws in the payment process, such as cumbersome drop-down menus.
  • Don’t forget to optimise the website or app for mobile payments.
  • The higher the invoice amount, the more important it is to offer payment by invoice and in instalments. 
  • Ongoing testing of the payment process is essential because making sure payment is seamless and easy is the only way to generate online sales.
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