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Reducing eCommerce Cart Abandonment with Alternative Payments

Abandoned card vector illustration. Flat tiny cancel purchase persons concept.

 

eCommerce has become essential for home furnishing businesses to reach and engage with customers. However, despite the convenience and accessibility of online shopping for customers and retailers, eCommerce cart abandonment is a significant challenge.  Online shopping carts’ average cart abandonment rate is a whopping 70%, signaling a need for innovative solutions. In this blog, we will delve into eCommerce cart abandonment, understand why customers engage in this behavior, and discover strategies for retailers to overcome and convert sales in the online shopping realm successfully.

What is eCommerce cart abandonment?

eCommerce Cart abandonment occurs when a potential home furnishings customer adds products to their online shopping cart but leaves the website without completing the purchase. The top 4 reasons for cart abandonment are:

  • 48% Extra costs too high (shipping, tax, fees)
  • 24% The site wanted me to create an account
  • 22% Delivery was too slow
  • 18% I didn’t trust the site with my credit card information

Source: Baymard Institute

Home Furnishings customers also choose to abandon carts due to reasons related to payments, including there being a too long/complicated checkout process (17%), not being able to calculate the total order cost up-front (16%), not being enough payment methods (9%) and the customer’s credit card being declined (4%). Businesses must implement strategies that minimize friction in purchasing and cater to customers’ diverse financial situations to address these issues.

The Role of Alternative Payments

Alternative Payments have emerged as a game-changer in the eCommerce landscape, offering customers more flexibility and control over their shopping experience. Among these, Lease-To-Own (LTO) options have gained prominence due to their ability to empower underserved customers with flexible payment terms, affordability, and simplified checkout processes.

Benefits of LTO for Furniture Retailers

  • Reduced Financial Barriers: Big ticket furniture purchases can strain a customer’s budget. An LTO option at checkout lets customers choose a lease plan that fits their schedule and cash flow, making larger purchases more accessible and affordable.
  • Enhanced Customer Experience: Lengthy and complicated checkout processes contribute to cart abandonment. LTO payment options can streamline the process by pre-approving customers and integrating seamlessly into the checkout, minimizing friction and increasing conversion rates.
  • Increased Sales Conversion: By offering LTO, furniture retailers can tap into a broader customer base. Customers who might have previously abandoned their carts due to financial concerns or barriers are more likely to complete their purchase when presented with LTO as a flexible payment option.
  • Building Customer Loyalty: Those excluded by traditional payments in the past are highly value-inclusive and welcoming merchants. Providing flexible payment options like LTO boosts customer satisfaction and fosters long-term loyalty and retention.

Implementation and Best Practices

To effectively leverage alternative payments to reduce eCommerce cart abandonment, furniture retailers should consider the following best practices:

  1. Diverse Payment Options: Integrate multiple providers like Buy Now Pay Later (BNPL) and LTO to cater to various customer preferences and increase the likelihood of conversions.
  2. Transparent Communication– Communicate the terms of each alternative payment option to ensure transparency and build trust with customers.
  3. Strategic Placement– Position alternative payment options prominently on your product pages and during checkout to remind customers that solutions are available to them no matter their financial situation.
  4. Continuous Monitoring: Work with your alternative payment providers to regularly analyze the impact on cart abandonment rates and sales conversions to optimize your strategy.

Furniture retailers must adapt and innovate to stay relevant in the fiercely competitive eCommerce landscape. Reducing cart abandonment rates is a critical aspect of optimizing online sales. Alternative Payments, particularly LTO options, have proven to be a valuable tool for overcoming eCommerce cart abandonment challenges in the furniture industry. By offering customers flexible and affordable payment choices, furniture retailers can transform abandoned carts into completed orders while building brand loyalty.

To learn more about how Lease-to-Own can help open a world of new and loyal customers, Katapult is here to help.

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