Overcoming Consumer Barriers to Online Purchasing

A version of this article first appeared in Aquaculture Magazine December 2020 – January 2021. Vol. 47, No 6.

The year 2020 and the accompanying COVID-19 pandemic demonstrated the importance and value of e-commerce capabilities and digital marketing tools that drive online sales, particularly for food and small businesses. During the last quarter of 1999, e-commerce retail sales were estimated at 0.6% of total retail sales (U.S. Dept. of Commerce). This rose to 15.7% for Q2 2020 before dropping to a preliminary estimate of 13% for Q3 2021, a 3.3% decrease from the prior quarter but still a 6.6% increase from Q3 2020 (U.S. Dept. of Commerce).

Image 1. E-Commerce as a Percent of Total Retail Sales, Q4 1999 to Q3 2021

For businesses marketing and selling directly to individual consumers, it’s essential to understand why they turn to online shopping. According to a consumer survey conducted by Deloitte (2020), the top five reasons for shopping online are

1. to avoid crowds (65%)
2. comfort of at-home shopping (64%)
3. free shipping/delivery options (60%)
4. 24-hour availability (58%)
5. ease of price comparison (53%).

While, overall, online shopping is steadily growing in acceptance and use by consumers, concerns continue to exist that deter more widespread use.  Concerns regarding security, inability to see, touch, or taste products, lack of personal interaction with the business, and poor past online shopping experiences have been identified as deterrents to online shopping (Katawetawaraks and Wang, 2011). Additionally, even if consumers progress through the online shopping process to the point of placing items in their carts, 88% of shopping carts were abandoned before the sales transaction is completed, with abandonment rates higher for mobile phones than for desktop computers (Statista, 2020a, 2021a).  Reasons for cart abandonment include high shipping costs (63%), discount codes not working (46%), long estimated shipping timeframe (36%), having to re-enter credit card information (30%), and having to re-enter shipping information (25%) (Statista, 2021b).

To counter these concerns, there are several steps that businesses can take to enhance their online presence and encourage online purchasing.

Cultivate a digital mindset. Success with digital marketing and online sales requires that businesses adopt and cultivate a digital mindset.  Businesses should be willing to try new technologies, content formats, and approaches in the rapidly evolving online environment. Provide tools to anyone in the business that is, or will be, involved with online marketing, sales, or customer service activities.

One method to creating this mindset is soliciting feedback regarding the online experience. Website and online store appeal can entice or deter consumers from purchasing.  White (1996) found that consumers who rated a business’s website appeal highly were more likely to purchase from them.  Asking trusted customers, family, or friends to review your website, online store, or social media presence is a useful way to assess your digital presence and approach them from the customers’ perspective.

Review your digital marketing tools. Whether your business has a website, online store, social media presence, or a combination of these, review each presence for user-friendliness and completeness. Make sure that basic information about your businesses is provided. Consumers are less likely to purchase from a business online if information about the business or products is lacking or insufficient (White, 1996).

Throughout a review, identify what can be done to overcome consumer concerns regarding the inability to see, touch, or taste products and lack of personal interaction. Embedding short videos that demonstrate product use or preparation, providing highly detailed product descriptions, and including multiple product photos are all actions that can be taken to improve the consumer sense and feel for products. Videos, photo stories, and regular social media posts about business owners and employees can help to create a sense of a personal connection between consumer and business.

Optimize the online checkout process. With 88% of online carts being abandoned, the checkout process is an important area to focus on with online stores.  Minimizing negative user experiences and interface issues is crucial, building a seamless, efficient user experience. This can be accomplished by offering a short and transparent checkout process. First, don’t require users to create an account. Many shoppers are hesitant to create accounts for every online store they may purchase from. Reasons for this range from not wanting to receive marketing emails (32%), being nervous about providing personal information (24%), to not planning to buy from the store again (13%) (Marketing Charts, 2019).

Second, clearly show customers the number of checkout process steps and their progress through those steps, as illustrated in Image 2.

Image 2. Checkout progress bar

As customers enter information (shipping destination, credit card information, gift cards, coupons or discount codes, etc.), showing the order summary (Image 3) throughout the checkout process can improve the sense of transparency customers have with how data affects the estimated delivery timeframe and final price, allowing them to conduct price comparisons more easily.

Image 3. Example order summary

Offering multiple payment methods (Images 4 and 5), along with the ability to split payment across two (or more) methods of payment, can also enhance the customer experience and encourage purchase completion. The article E-commerce Payment Methods provides more information about the specific payment methods available and their use by consumers.

Image 4. Common online payment methods

Image 5. Alternative payment methods

Researching the checkout processes of other online stores – perhaps as you engage in your own online shopping – is a great way to learn about processes and supporting e-commerce platforms that offer a good experience and those that may be lacking.

Verify privacy and security.  While consumers continue to increase their e-commerce activities, privacy and data security concerns remain. Consumers expect that their personal information – email, credit card number, address, etc. – will be well protected from hackers when purchasing from online stores. Surveys have shown that when data is compromised, they blame businesses, not the supporting service providers such as payment processors. If there is a security breach and payment information is stolen, 43% of consumers indicated that they felt the store or merchant was responsible (TSYS).

If businesses collect consumer information – email, address, birthday, etc. – for purposes not related to online sales, such as loyalty programs or mailing lists, a privacy policy should be readily available online and opt-out instructions provided in every communication. This is particularly important for any business collecting information from European Union residents following General Data Protection Regulation (GDPR) implementation in 2018.  Specific items to review include the server(s) hosting your website and online store, your online payment processor, and database backups.

Ensure quality online customer service. High-quality responsive online customer care is essential year-round and integral to marketing and business success. Research shows that "80% of customers say that the experience a company provides is as important as its products and services" (Salesforce, 2018). The impact of your customer e-service can be substantial. In another study, 21% of customers were more likely to buy from businesses they could reach on social media (Sprout Social, 2018). Other research has found that people indicate that they would be less likely to do business with someone who didn’t answer questions on their social media pages.

Aspects vital to customer care include timely responsiveness and understanding what motivates a consumer to reach out. Take the time to review customer service processes, develop customer service response plans, or make enhancements as necessary.

Ensure mobile compatibility. Mobile phone usage by consumers continues to grow. Whether you use a website builder (e.g. Wix, Weebly, Squarespace) or have a custom-built site utilizing a different platform, businesses must ensure that their websites, e-newsletters, and online stores are accessible and readable, and mobile user-friendly. Take the time to read your email newsletters and browse your website and online store using different devices of different sizes.

Utilize social commerce. Social media platforms are continually evolving with the features they develop to keep users on the sites and engaged. In recent years, e-commerce features have increasingly been integrated. Currently, Facebook (Facebook Shop), Instagram (Checkout), and Pinterest (buy now pins) are leading the way in developing social commerce functionality within their platforms.

Social commerce already has a firm foothold with consumers as the percentage of internet users who had bought directly through social media channels increased from 13% in the last quarter of 2018 to 21% in the third quarter of 2019. Moreover, not only are U.S. internet users between the ages of 18-34 the most interested in social commerce, but they have also purchased via social commerce the most with 37% of this age group having used social commerce and 11% using it regularly (Statista, 2020b).

Analyze your data. Nearly all digital platforms offer analytics that can be used to assess your goals and gain insight into your online community and customers. Whether Facebook, Instagram, Twitter, or Google Analytics, you can gain valuable insight regarding the number of unique visitors, day and time visitors are online, the type of device used, length of visit, pages visited, site navigation, and bounce rate, among other data.  Carve out time to regularly analyze the data you collect and/or receive regarding website use and performance and use that information to drive decisions for website, online store, and social media activities or modifications.

Summary

As consumers increasingly turn to and rely upon online shopping, businesses must focus on building trusting relationships with customers and addressing consumers' concerns regarding online purchasing. Start by cultivating a digital mindset and a focus on the customer experience by providing substantial, informative product information and through online privacy and security measures and quality customer service.

References

Deloitte. (2020, October). 2020 Deloitte holiday retail survey: Reimaging traditions.

Katawetawaraks, C. and Wang, C. L. (2011). Online Shopper Behavior: Influences of Online Shopping Decision. Asian Journal of Business Research. Vol. 1, No. 2, pp 66-74.

Marketing Charts. (2019, August 29). What Keeps Online Shoppers From Creating User Accounts? Marketingcharts.com

Salesforce. 2018. State of the Connected Customer Second Version.

Sprout Social Index 2018.

Statista. (2020a). Online shopping cart abandonment rate in selected industries in March 2020.

Statista. (2020b). Share of internet users in the United States who are interested in purchasing products through social media as of April 2020, by age group.

Statista. (2021a). Online shopping cart abandonment rate in the United States from 2^nd quarter 2020to 2^nd quarter 2021, by device.

Statista. (2021b). Primary reason for digital shoppers in the United States to abandon their carts as of November 2018.

TSYS. 2018 TSYS U.S. Consumer Payment Study. TSYS.com

U.S. Department of Commerce. (2021). Estimated Quarterly U.S. Retail Sales: Total and E-commerce.

White, G. K. (1996). Factors Influencing Consumers' Likelihood of Purchasing Specialty Food and Drink Products On-line: Results of Consumer Reviews of 12 Selected Sites. Journal of Food Distribution Research. vol. 27(3), pages 1-10, October.