The Correct Change: Foreign Exchange Is the Secret Weapon to Solve Cart Abandonment
Online retailers have been plagued by one struggle in particular since the inception of the e-commerce store: cart abandonment. In 2017, the average cart abandonment rate was still a whopping 78.65 percent. And not to start the New Year off on a sour note, but this number is only growing. There is good news though, as fashion and apparel brands have been able to somewhat successfully minimize drop-off and have the power to move shoppers from cart to sale at an even higher rate this year. The solution: offering shoppers the right currency.
Style knows no shopping borders
While apparel retailers may feel confident that they’re outperforming other industries on cart conversion, having such a high rate of incomplete purchases should still make them nervous. The online apparel sector is experiencing exponential growth — estimated to increase by 17.5 percent in 2018 alone — in part because more consumers are shopping across borders than ever before. This means merchants need to make some changes if they want to capitalize on this growth while the digital economy becomes increasingly global, as businesses that traditionally operated within domestic borders are finding themselves expanding into new, international territories. With such expansion, the same problems that plague them at home will plague them abroad.
These merchants must ask themselves: what is keeping nearly three of four online apparel shoppers from following through with their purchases? And what can online retailers do to drive consumers to complete these transactions — especially as the digital economy continues to expand globally? Brands need to be creating payment experiences that leverage foreign exchange (FX) capabilities to appeal to their end users’ desire for a smooth, convenient and transparent shopping experience. Here’s why:
Local currency is not optional anymore
One in four shoppers will leave a website if their preferred local currency is not offered, according to our research. That means that if a U.S.-based sportswear company wants to enter the Chinese market, for instance, it will be giving up a quarter of its sales in that new market up front if its site doesn’t offer payment options in Chinese yuan.
The solution to this problem is clear. Leveraging FX is critical to localizing websites and providing end-users the local currency options they are accustomed to, reducing customer drop-off and increasing customer satisfaction. By providing these options to the consumer, global merchants can easily eliminate any cart abandonment that comes as a result of a lack of local currency payment options.
Eliminate complications with conversions
In addition to losing potential customers right at the initial point of sale, a lack of local currency options creates problems throughout the rest of the payment experience as well. For example, those customers that don’t immediately leave the website will have to seek out a third-party conversion site to understand what they will be spending in their own currency. Not only does this make the payment process substantially less convenient, it drives customers away from a merchant’s site at the most critical point of the sale, making it much less likely they’ll return and complete the purchase.
Improve customer loyalty
Customer loyalty is extremely important to global apparel retailers. Brands invest heavily in both in-store and online customer experience modifications for just that reason: to provide the simplest, most personalized shopping experience possible. But consumers are fickle and the payment process is an important part of that experience — one study shows that only 16 percent of shoppers would give an e-commerce site a second chance after a poor experience.
Foreign exchange capabilities become essential when they protect customer loyalty. Offering customized payment experiences that allow consumers to pay in a local currency will contribute to customer satisfaction. Retaining customer loyalty — and even attracting business away from competitors — will require that apparel retailers invest in foreign exchange for localized, customized shopping experiences.
Make foreign exchange part of 2019
The apparel industry is booming across domestic borders and cart abandonment has the chance to become an even bigger issue if FX isn’t a part of a brand’s e-commerce plans. If global retailers want to capitalize on the impending customer growth, they need to seriously consider the positive impact that foreign exchange offerings provide to both the end user and the merchant’s bottom line. Cart abandonment isn’t going away, but it can be minimized through smart investments in personalized e-commerce experiences driven by a calculated foreign exchange strategy.
Consumers are king in today’s digital global economy and increased competition between global players provides customers with more options and better prices than ever before. Merchants can reap the benefits of being able to tap into new markets and reach more customers, but they need to strategize their global expansion. Foreign exchange capabilities can serve as a secret weapon for online apparel brands to differentiate themselves against competitors looking to tap into those same new markets, all around the globe.