By Andy Harding, UK Managing Director, Openpay
With society starting to return to some form of ‘normality’ over a year after the pandemic hit the UK, the retail industry remains in a period of high-speed transformation. Over the past 12 months, e-commerce has exploded at an exponential rate while lockdown restrictions have closed physical stores across the country.
Retailers responded to this unexpected change of play by deploying innovative techniques to achieve conversion. These effective tactics became familiar to many online shoppers over lockdown, with flash sales, wide-spread adoptions of one-click payments, Buy Now, Pay Later instalment plans and more advanced tracking cookies driving sales.
Openpay’s recently published Hard Sell report, explores how the UK’s biggest retailers drove £3.4 billion of impulse purchases last year through a combination of ‘cart arts’ when shopping online. The report examines how e-commerce features are most effective when used sparingly and strategically, leveraging data to accurately target the correct demographic and in turn drive sales.
As we look ahead to a new era of retail post-pandemic, the question remains – how can retailers act responsibly with their use of data and marketing techniques, while still driving sales?
Front of shop
For both online-only and established retailers with storefronts across the UK, their website is ground zero when it comes to driving conversion online. It’s arguably the retailer’s most important asset to communicate their brand DNA outside of a physical store.
Openpay’s research discovered 92 per cent of consumers say that a website that is easy to browse and navigate is important when shopping online. Similarly, 93 per cent of consumers said it’s important that a website is technically good when purchasing goods or services, meaning the site loads quickly and adopts transparent and straightforward payment processes. The speed of innovation online proves that sites with prehistoric back-end systems do not provide the customer experience they require to remain competitive. Efficiency, security and speed is paramount for consumers.
Openpay recommends that retailers reconsider the use of one-click payment options for baskets over a certain value, to drive more conscious spending. The efficiency of the one-click feature means there isn’t much time to consider a purchase between adding items to your basket and paying, thereby increasing impulse purchasing.
A similar tactic used to promote impulse buying are low-stock alerts, with some retailers listing the number of units sold in the past 24 hours or the number of products left in stock. For consumers, this elicits a psychological response which encourages careless spending. Openpay recommends that retailers should only use factual information when indicating stock levels and refrain from using overly persuasive or deceptive language which could mis-communicate the availability.
Flash sale floods
Sometimes when you’re browsing online, a tracking cookie may register a return visit to a product page and enable a ‘flash sale’ discount to drive sales conversion. A notification may also be sent via email to the customer’s inbox if already registered as a return shopper. For younger and arguably more vulnerable demographics, which may not be familiar with these tactics, it can create an unhealthy relationship with spending if they’re particularly influenced by these discounts.
Openpay’s view is that retailers should revaluate the number of flash sales and discounting periods annually, limiting the number of sale events each year protects consumers from buyer’s remorse, costly returns and delayed purchasing behaviour.
Buy now, stay responsible later
Openpay recommends retailers and payment providers worked together to follow ASA guidelines and educate consumers on Buy Now, Pay Later solutions. The recent boom of Buy Now, Pay Later has been heralded for allowing consumers more flexible options when shopping online. However, there’s a risk that when consumers don’t pay anything up front, it may inadvertently encourage absent-minded purchasing. Openpay recommends consumers choose a BNPL provider which requires a down payment, encouraging conscious purchasing.
As the Hard Sell report explores, driving customer conversation rates is now more important than ever. Retailers have a bank of sophisticated tactics to draw from, and whilst there’s no denying that many ecommerce features are invaluable to today’s online consumer experience, there are also areas which are causes of concern. The responsibility of conscious consumerism must fall on retailers to adopt honest and transparent policies, as we move forwards together as an industry out of lockdown.
To download report in full, click here.
By Andy Harding, UK Managing Director, Openpay