Clues to Diagnose 7 Profit-Killing Features on your eCommerce Site

by Commerce Partner Marketing Team

posted on 01-08-2020

As an eCommerce merchant, there’s a good chance you spend a lot of time investigating potential conversion and profit-killing features on your eCommerce site.

There are several suspects that come up time and again including friction in the checkout funnel, sales tax management, fraud, payment processing inefficiencies, lack of alternative payment options, international growth complexity, and poor omnichannel experiences.

Let’s dive into each area to help you uncover clues of profit-killing aspects that could be lurking in your eCommerce business.

1. Friction in the checkout funnel

Almost 70 percent of items that people add to their online carts are never purchased. That’s a revenue loss of approximately $260 billion. Much of this is due to friction in the checkout funnel. Reducing this friction—especially on mobile—is key to recapturing lost opportunities. Here are some questions to ask to uncover signs of friction in your checkout funnel:

2. Sales tax management

In the U.S. alone, merchants are confronted with a complicated web of tax jurisdictions and constantly evolving rules and rates. Slipping into non-compliance is easy and the consequences are costly—merchants are liable to pay 10 percent in late fees for not filing on time and, in some states, they even face potential jail time. Here are some questions to ask to uncover signs of poor sales tax management in your business:

3. Fraudulent transactions and false declines

Efforts to mitigate the risk of fraud are necessary but costly—online merchants spend an average of 8 percent of their annual revenue on preventing and managing fraud. The cost is justified, however, since for every $1 stolen by order fraud, merchants lose another $2.56 to lost labor, lost productivity, and chargeback penalties. Here are some questions to ask to uncover signs of inefficient fraud management in your business:

4. Payment processing inefficiencies

Complicated checkout processes account for nearly 39 percent of U.S. shopping cart abandonments. the heart of the checkout experience is the payment provider and processor. Here are some questions to ask to uncover signs of payment processing inefficiencies:

5. Lack of alternative payment options

Customers expect brands to deliver a wide range of alternative payment methods, including point-of-sale financing. This is especially popular among Millennial and Gen Z shoppers who enjoy mobile shopping and are wary of credit card debt. As a result, point-of-sale financing is expected to account for 55 percent of online transactions in 2019. Here are some questions to ask to identify if consumer credit could be a good option for your customers:

6. International growth complexity

Cross-border eCommerce will account for $1 billion—or one quarter of the global market by 2020. And that’s just business-to-consumer commerce; cross-border business-to-business eCommerce is thought to be four to five times larger. However, before merchants rush to expand globally, they need to consider how international shoppers want to pay for goods or services. Here are some questions to help you strategize your international expansion:

7. Poor omnichannel experiences

Omnichannel customers are actually valuable—they spend an average of 4 percent more every time they shop in the store and 10 percent more online than single-channel customers do. Therefore, merchants should ensure their cross-channel experiences are seamless. Here are some questions to diagnose and alleviate poor omnichannel experiences on your site:

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Topics: Digital Transformation, Corporate Marketer

Products: Magento Commerce