Frictionless Transactions Customer experience | Greta Paa-Kerner | 14 September 2015

Frictionless transactions pave a smooth path for online retailers


Today’s buzz phrase in e-commerce is “frictionless transactions”. Why is there a heightened interest in smooth functioning e-commerce? Well, it has to do with where consumers are in the e-commerce technology adoption curve.

Using Everett Rogers’ technology adoption lifecycle, we’ve moved past the “early adopters” and in fact, are hitting the plateau in the “early majority” phase. Today’s online shopper not only includes the online bargain hunter, but also the time-poor consumer who is looking to find whatever combination of ordering and delivery that will make their life easier.

As we reach the top of the bell curve, what does this mean for online retailers and technology partners? It means they have to continue to improve the online shopping experience to make it smooth and effective or they face extinction. Retailers need to get to grips with the following:

1. Easy ordering: Retailers who make it easy to order benefit from a higher conversion rate and basket value. Fashion brands who curate an entire look should go one step further and add a “buy all items” to their website so the whole purchase will take only one click. Ideally, these looks can be purchased not only from the commerce site, but from social media too, like Pinterest. E-commerce must move closer to online content.

2. Easy payment options: According to a recent study by MasterCard and PRIME Research, convenient payment options dominate the consumer conversation. (Their research was based on analysing 1.6 million unprompted online conversations.) Consumers favoured less cumbersome and more innovative ways to pay, like digital wallets as well as in-app and contact-less payments.

3. Easy delivery options: Consumers expect multiple delivery options, such as click and collect, home delivery or delivery on their way to/from work. The more responsive retailers like Argos have developed new collection points such as within the London Underground stations as well as inside large grocery chains like Sainsbury’s.

4. Speed of delivery: Delivery times are under increasing pressure because consumers have to feel confident that if they buy online, their product will be delivered within a delivery window that they would expect. That means inventory and delivery logistics have to function to a high degree of accuracy. With the rise of services like Amazon Prime that offer free one-day shipping, consumers have lost patience with long delivery times. In fact, Amazon even offers a two-hour delivery service for common household and grocery goods called “Prime-now” throughout 11 cities in the US.

5. Easy returns options: Offering free returns are a way of establishing consumer confidence and loyalty with a retailer. This is most important during the Christmas holiday shopping season. However, whether the items are damaged, unwanted, outmoded, leaking, or spoiled this comes at a cost to an online retailer. In fact, according to InboundLogistics.com, returns account for an average of 8.1% of total sales.

As ecommerce eventually moves from the “early majority” to the “late majority”, the back-office online retail operations and technology underpinning the consumer experiences will determine who will remain a household name and who will wobble and become the next Quicksilver, which has lost 79% of its market share in just one year.