Shoppers are clearly feeling the pinch when it comes to spending. Many customers are having to sit down and really break down and consider where they can make savings in not just what they are paying for, but in how they are paying for it.
If retailers want to acquire and retain customers during this tricky time, they need to consider the options they are offering — and those options should be informed by consumers’ opinions.
From payments to shipping to customer service, we’ve highlighted the key takeaways from BigCommerce’s 2023 Digital Payments Report: How Consumers Prefer to Pay to help shed some light on the latest consumer preferences.
Customer carts are shrinking.
Low value transactions are increasing this year as shoppers are hesitant to splash out all at once. Online purchases over $500 have fallen 4% from 2021–2023. Purchases over $100 have also declined in the last three years, down 4%, which may come as a surprise as the cost of goods has risen.
Low-value transactions have increased. Most notably, online orders between $20–$50 surged 7% from 2021–2023.
Retailers should avoid hidden costs.
So, how do you encourage shoppers to make a repeat purchase? The answer may be as simple as offering free shipping. As expected, 93% of shoppers say that free delivery will encourage them to make a repeat purchase with an online brand. Expensive shipping is the number one reason preventing shoppers from making a repeat purchase at 91%.
Transparency is also important with 97% of shoppers likely, or very likely, to abandon their carts due to additional charges at the checkout.
Good quality products are the next most important reason influencing additional purchases (87%), followed by fast shipping methods (75%).
Poor product quality and a negative customer service experience take equal second places in preventing repeat shoppers.
Is the BNPL bump over?
To say Buy Now, Pay Later (BNPL) is over may be an exaggeration as many shoppers are still using it to save for bigger purchases; however, it’s evident that shoppers are lowering their reliance on BNPL, or at least aiming to do so.
What we are seeing now is a stronger reliance on debit and credit cards this year. Credit card purchases have ballooned to a startling 43% in 2023, an increase of 17% since 2021. Over the same period, BNPL has seen a 4% decline.
With cost of living challenges, many turn to credit to fund bigger purchases. As an example, in 2020, BNPL experienced a bump as shoppers turned to the purchase method early in the pandemic to ease the pain of paying throughout a time of high uncertainty.
In 2021, almost a quarter of shoppers said they wanted to decrease spending with BNPL payment methods. The following two years saw nearly a third wanting to reduce that spending. The reason for this is a concern over incurring late payment fees at a time where there is some uncertainty over income consistency and the rising cost of living.
However, it is important to note that despite this desire to reduce reliance on BNPL methods, actual BNPL payments have only dropped by 3% since 2021. Additionally, 26 percent more shoppers than in 2021 are boosting BNPL spend due to insufficient savings, and an additional 11% of them versus 2021 are also increasing BNPL use for significant events.
Notably, the government continues to take steps to regulate the BNPL industry, which may further affect its impact over time.
You can find out everything you need to know about consumer’s payment behaviour in BigCommerce’s 2023 Digital Payments Report: How Consumers Prefer to Pay whitepaper, available to download for free here.