News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Guest Perspective: Increasing Holiday Sales Conversions – It’s a Matter of Trust

Guest Perspective: Increasing Holiday Sales Conversions – It’s a Matter of Trust

By Stacy Fassberg, Vice President of Marketing, PayItSimple

Guest Perspective: Increasing Holiday Sales Conversions – It's a Matter of Trust Retailers have reason to be merry as the 2014 holiday shopping season approaches. The National Retail Federation (“NRF”) forecasts that sales in November and December will increase by 4.1 percent to $616.9 billion . Even better for online retailers, (NRF’s digital retail division) predicts that online sales will see an increase of 8-to-11 percent over last holiday season to as much as $105 billion, with 56 percent of all consumers planning to do at least some of their holiday shopping online.

But even with all this optimism in the air, e-commerce retailers still need to determine how to capture as much of this holiday goodwill as possible. Even after you win the battle to drive traffic to your Website and get that all-important “add to cart” click, the reality is that upwards of 70 percent of consumers abandon their shopping carts.

The reasons are myriad, and some you certainly can’t control. At the same time, there are numerous factors you can influence, and if you succeed in reducing shopping cart abandonment by even a few percentage points, you can significantly benefit your bottom line.

Improving Conversions: Earning Consumer Confidence

In this, the first holiday shopping season following the infamous Target security breach, it is not surprising that many of the reasons shoppers cite for not completing an online purchase relate to the matter of trust. Consumer trust issues are never more critical than in an e-commerce context, in which the shopper can’t look at the product, can’t see the merchant, and doesn’t have the instant gratification of walking out the door with something in his hands after parting with his hard-earned cash. Add in the extra pressures of holiday shopping (with shoppers eager to ensure that they don’t disappoint their friends and family but anxious about overspending), and it’s easy to see why you must inspire consumer confidence in order to convert the sale.

As a start, of course, the overall design of your site impacts its credibility. Easy navigation, clear images, well-written text – all of these factors influence the consumer’s sense of whether your site is legitimate and worthy of his trust. But as important as these overall factors are, the place where it all comes together (or falls apart) is the shopping cart. So, let’s take a look at three specific ways to earn consumer confidence and improve conversion at this critical juncture.

Shipping Costs

The truth of the matter is that customers have come to expect free shipping, especially at holiday time (with over 70 percent of online shoppers considering this factor critical to their purchase decisions). But it’s equally true that free shipping is not possible for all retailers. Even without offering free shipping across the board, there are important steps you can take to keep your customers happy when it comes to your shipping policies.

Setting a minimum purchase amount for free shipping is a great way to satisfy customers as well as boost your total sales. In fact, a study conducted by UPS and comScore found 58 percent of online shoppers in the U.S. indicated they have added items to their shopping cart to qualify for free shipping. For even better results with this method, try reminding customers as they shop how much more they need to spend in order to receive free shipping and suggest complementary items to get them to that total.

From a trust perspective, even more important than free shipping is not to surprise your customers with shipping costs at the last moment. Thirty-seven percent of customers report that “shipping and handling costs being presented too late in the checkout process,” is a reason they do not complete their online purchases. Clearly indicate shipping costs on your product pages or provide a shipping calculator to earn consumer confidence and increase conversion at the shopping cart.

Return Policies

More than any other time of year, shoppers want to know that holiday gift returns will be hassle-free (especially for those who are on the receiving end of gifts).

Increasingly, shoppers are paying closer attention to return policies before they make their purchases, and these policies strongly impact their buying decisions. Sixty-three percent of online shoppers report they review a Website’s return policy before making a purchase, and an equal percentage report they will shop more with a retailer that offers hassle-free returns.

As Shopify explains in its e-commerce university : “Having a solid return policy inspires confidence in buyers and shows you’re committed to customer service. Even though the customer isn’t satisfied with the returned purchase, handling the return professionally will ensure their continued patronage.”    

Appropriate return policies for Internet retailers vary widely based on product segment and target market, so take your bottom line into consideration when determining the right policies for your site. If it’s practical for your business, consider following the example of brick-and-mortar retailers by making your policies more liberal during the holiday season. But whatever your return policy, stating it in plain language and putting it in plain sight will make shoppers feel more secure about their purchases and encourage them to complete the checkout process.

Payment Options

The most popular online payment method in the U.S. (by an overwhelming margin) is still credit and debit cards, accounting for 63 percent of online purchase transactions .

Even with the credit card’s dominance in the United States, recent studies show that every additional payment option an online merchant offers can help increase conversions by 14 percent. Offering several additional payment methods can increase conversion rates by up to 20% percent.

Clearly, giving consumers additional payment options is not enough. They must be payment options shoppers (and merchants) trust, as the disclosure of sensitive personal information is at the very heart of consumer confidence and security.

An Additional Option: Installment Payments

There are six countries in the world today, including the United States, that allow people to divide credit card charges into interest-free installments on their existing credit card, with no additional credit checks or paperwork. At the point of purchase, customers can immediately select the number of interest-free installments they want and the installment payments are guaranteed in the same manner as regular credit-card transactions.

There are a number of other alternative services available to consumers, like BillMeLater, closed-loop retailer cards, GE money, etc; however all charge the cardholder high interest rates after a set grace period.

Every e-commerce merchant hopes to build and maintain meaningful customer relationships that last long past the holiday season. As in any relationship, trust is a key parameter between merchants and customers, and there is no room for mistakes in this area.  Feelings of trust make the difference between a loyal customer and a one-time shopper. We hope you will continuously look for ways to build a trusting relationship with your customers. Having great products at appropriate prices are critical; but without trust, very few people are likely to buy them. 

Guest Perspective: Increasing Holiday Sales Conversions – It's a Matter of Trust Stacy Fassberg is a global marketing veteran with over 25 years of experience in the fields of financial services, technology and retail. PayItSimple enables consumers to divide the total cost of their retail purchases across as many months as they choose, without the need to complete a credit application or qualify for a new credit line. The company, founded in Herzliya, Israel, was a member of the first cohort of the Citibank Basecamp Tel Aviv Accelerator Program. Stacy can be contacted at .

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Daniel Leibovitch