Cross-channel MarketingUncategorized

One-Click Payments

Cross-channel MarketingUncategorized

One-Click Payments

One-Click Payments

By March 30, 2017 No Comments

Breaking barriers and building sales

It’s really quite simple—the fewer the barriers and shorter the path, the easier it is to close the sale. No one likes to wait in long lines, and any business that can’t find a way to manage the sales process—on or offline—is unlikely to last long.

This has always presented a unique challenge for ecommerce. Online shoppers can be anywhere or doing anything. And that means they can be easily distracted or redirected. And shoppers who lose interest are less likely to purchase. If your customer is sitting on the couch and their credit card in in the other room, the very fact that they need to get up, get the card, and then go through the checkout process can be enough to stop them from making an impulse purchase.

That’s why online retailers are always trying to streamline the process and make it easier, and more intuitive, for customers. By focusing on the biggest bottleneck facing online customers—the checkout process—retailers are attempting to make ecommerce frictionless.

First on the scene

The first internet retailer to develop a solution was Amazon, and the rest of the web has been trying to catch up. It’s no coincidence that the largest and most ubiquitous online retailer has been a pioneer in this area. They effectively invented ecommerce as we know it, and they’re reinventing it almost daily.

Amazon filed its 1-Click patent in 1997, it was granted by the United States Patent and Trademark Office in 1999. 1-Click removes the single biggest sticking point for completing an online purchase, making checkout as intuitive as searching and shopping. The result of this innovation is that Amazon achieves extremely high conversion from its existing customers. Since the customer’s payment and shipping information is already stored in Amazon’s system, it creates a checkout process that is virtually frictionless.

You want it, you click it, and it arrives at your door—sometimes the same day.

What’s one-click really worth?

Well, the short answer is, 1-Click is worth a lot. Since it was granted, the 1-Click patent has generated billions of dollars in revenue for Amazon.com.

But it is not just Amazon benefiting from this tech. Apple licensed Amazon’s 1-Click technology in 2000, incorporating it into iTunes, iPhoto, and the Apple App Store, leading to what is arguably the most efficient ecommerce platform around, and one that effectively revolutionized the music industry. And Apple processes a lot of transactions each day.

According to one estimate, 1-Click has given Amazon more than $40 million in additional operating income each year—and that doesn’t even include the licensing fees collected from Apple.

It’s safe to say those numbers are likely to go up in the coming years as customers, looking for easier and faster checkout experiences, gravitate to platforms that offers “one click” options.

What’s the big deal?

Sure, Amazon has boosted revenue with 1-Click, but that’s Amazon—one of the top retailers, and the biggest internet retailer on the planet. And Apple? They are one of the most profitable and valuable brands on Earth.

The real question is: does the pattern scale to other, smaller, businesses? Does the cost of developing or licensing these technologies translate into revenue for other online brands?

It sure looks that way.

As online retail continues to outpace brick-and-mortar, and not just on Black Friday and Cyber Monday, companies that can shave time and aggravation out of the checkout process are likely to see improved revenues. Those that don’t are in trouble.

$4 trillion worth of merchandise were abandoned in online shopping carts in 2014. Better checkout, payment, and customer interaction can potentially recover more than 60 percent of that amount—that’s $2.4 trillion in revenue.

Source: Business Insider

Abandonment issues

Streamlined checkout and payment is a hedge against shopping cart abandonment, one of the biggest threats to online retailers.

When shoppers put items in their online carts, but then leave before completing the purchase, that’s more than a missed sale—it’s a missed opportunity for further interaction with a customer. It’s estimated that over $4 trillion worth of merchandise is left abandoned in online shopping cars each year. Any business that that reduce even a small share of that number could realize a significant increase in sales.

Making payments easier is likely one of the most effective strategies for solving this problem, and can turn shoppers and browsers into impulse buyers. And when you consider that five in six Americans admit to impulse buying, making it easier can provide a good revenue boost.

What’s next?

Recently, the World Wide Web Consortium, or W3C, has brought together several key technology and internet firms, including Google, Facebook, and Apple to explore ways to streamline the online purchase and payments processes. The goal is a global standard, similar to Amazon’s 1-Click, for the entire internet that will give users a uniform way to input credit cards and other payment systems to any web browser to facilitate quick, secure transactions.

This new payment methodology faces face competition from Amazon, PayPal, and other internet payment leaders, and from credit card companies and payment processing firms—all who already have payment platforms in operation, or who are currently developing capabilities of their own.

The standard also makes it easier to use Bitcoin, Dash, Zcash other crypto currencies , or international payment platforms.

What to watch out for

Anytime you combine the internet, shopping, and credit cards with new technology, customers are bound to get a little nervous. And why shouldn’t they be? A data breech can be a major pain and inconvenience for customers, requiring them to jump through a range of hoops to get the mess cleaned up.

For retailers it can be worse. According to IBM, the average cost of a data breach to companies has risen to $4 million. The cost in bad press and lost revenue can be significantly more.

Any business looking to shorten the purchase process by collecting and storing customer data—especially payment information—must make sure that their security is airtight, and continually evaluated. Today’s sophisticated cyber criminals don’t use the “front door,” so security measures must go beyond the systems that store and process the sales information, and include any system that intersects with them.

The bottom line

When you get right down to it, when it comes to online shopping, the fewer clicks the better—and that goes for finding products and purchasing them.

As Smashing magazine, noted single click checkout is still not available from most retailers, and while that is likely to change in the future, it is not imperative for retailers to have it now. But that doesn’t mean companies are in the clear. Exceeding six clicks does not go over well for most companies. Right now, four to six clicks seems like the sweet spot—but that margin is likely to shrink as more and more retailers adopt streamlined checkout processes.

While true “one-click” buying might still be out of reach for most online retailers in the neat-term, the most important thing to remember is that checkout should be done without required sign-ups, account registrations, passwords, and other unnecessary steps—just like when you swipe your card or tap your phone at the mall.

 

 

Sources: RejoinerNY TimesTechnology ReviewACI World WideInvoice Ninja

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