Howard Schultz will be remembered, among countless other achievements as CEO of Starbucks, as revolutionizing the coffee-buying experience. He set an ambitious benchmark for enhancing the entire customer experience and successfully created the blueprint to building a loyal, enduring consumer base.
Yet, where Schultz may have really differentiated himself as a leader was in his ability to innovate for consumers rather than run in place through a proactive approach to incorporating the convenience of technology into current offerings. For instance, he leaned into the mobile generation’s daily rituals of coffee consumption by creating the most popular order and payment app. He took the simple model of a physical loyalty punch-card and transformed the transactional into something greater—the elusive feeling of instant gratification that comes with a seamless experience.
Retail has changed significantly since we grew accustomed to seeing a Starbucks on virtually every corner of the world, yet Schultz proved that even multinational companies can still innovate and separate themselves by looking forward when it comes to optimizing payment experiences.
What Schultz understood well was the massive sea change in consumer shopping preferences. The Kleiner Perkins 2018 Internet Trends study shows that mobile shopping app sessions increased by 54% between 2016 and 2017, which points to the fact that retailers can drive conversions on devices other than desktops. In addition to the immediacy that comes with the mobile experience, customers now have access to more point-of-sale payment options than ever before. However, they are more selective in their point-of-sale products, looking for solutions that are the most convenient, secure and provide the lowest fees and interest, the study shows.
So while consumers still want quality products—whether it is coffee or furniture—they also want to dictate their own shopping journey, including how they choose to interact with retailers and complete purchases.
Fortunately for retailers, optimization in the online payment landscape continues to evolve, in part fueled by the seismic growth in e-commerce, which is projected to exceed $600 billion in sales by 2021. Along with the rise of better online payment processing and platform-based solutions, optimization has manifested itself in a wave of new technologies that power checkout experiences and make online and mobile transactions more simple (see: our aforementioned Starbucks app example), and thus more appealing for the online consumer.
These new alternative payment options have opened the floodgates for retailers to start thinking about the future of payment experiences not so differently than we have all along—more personal, simple to execute and positioned as an extension of the customer journey.
How Retailers Can Optimize the E-commerce Experience
The first step for retailers is to re-evaluate their e-commerce stack and invest in payment solutions—such as Bread—and platforms that power better end-to-end user experiences. Thanks to a new wave of digital payment methods that have become easier to integrate into e-commerce platforms, retailers have more ways to capture a consumer’s attention throughout the entire shopping process.
Retailers need to take advantage of this innovation and make it easier to navigate, shop and pay for items across all digital channels. This all starts with having the toolkit to power a frictionless e-commerce experience that gives the customer what they want and how they want it.
Secondly, a renewed focus should be placed on those pesky cart abandonment issues that have plagued online retailers for more than a decade.
Our previous article discussed a study that identified friction in the checkout process as the culprit for the uptick in cart abandonments to the tune of several billions. Our own research indicated much of the same - in this case to the tune of a three-fold improvement in email conversion rates and a 155% increase in revenue.
Additionally, emails that included the personalized financing checkout links saw a 38% lift in click-through rates and 86% higher average order value.
Then there’s the standard growing pains that come with the adoption of new technologies. Traditional legacy systems are mired in clunky user experience and falling behind a demanding, digital economy. As we’ve seen with the rise of Twitter and Yelp, savvy shoppers have and will use social media to single out companies with inconvenient checkout options or those that don’t offer flexible and alternative payment methods, so it’s crucial for e-commerce retailers to adopt new technological innovations that align with consumer expectations and needs.
What Optimization Means for Today’s Retailers
Today, the disparate worlds of technology, payments, and e-commerce are intersecting in ways retailers could not have imagined even 10 years ago, let alone envisioned in the retail era Levinson described.
Retailers are now better equipped with consumer data and tools that can help them acquire and engage their customers, while the consumer shopping journey is becoming streamlined by an increasing number of alternative online payment options.
Even as we embrace the current era of retail by investing in high-quality payment technologies, it’s worth taking a lesson from pioneering retailers such as Schultz, who long ago discovered the benefits of a frictionless consumer experience.
In doing so, retailers can engage customers with intelligence and purpose across multiple digital channels, and more importantly, offer them a clearer path to navigating the sales funnel and completing purchases