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3 myths keeping customers away from online shopping

Dan Leberman, vice president North American online small and medium business unit for PayPal, debunks the myths that inhibit e-commerce.

May 14, 2015

By Dan Leberman, PayPal

It may seem hard to believe, but a good portion of shoppers still do not regularly shop online. According to a 2015 PWC report, only 27 percent of U.S. consumers are regularly making online purchases. This begs the question: Why — in this age of constant Internet usage — do so many people hesitate to shop online? I want to dispel some of the more common online shopping myths and offer some suggestions on how merchants can overcome them.

Myth 1: Online shopping = identity theft

Some shoppers think online shopping puts them at risk for identity theft, but new online security measures and services are making e-commerce transactions even more secure than many offline-shopping experiences. To combat this myth, merchants should consider offering customers checkout options that do not require the direct exchange of financial information (think, digital wallets).

Smaller businesses can further address customer concerns of online merchant legitimacy by enabling payment after delivery. In some markets, payment service providers that enable pay-after-delivery will even "float" the transaction for the merchant during the period of delivery. In other words, shoppers won't have to pay for purchases right away, but merchants still get paid immediately. It's a win-win.

Myth 2: Shopping in stores is easier

Shoppers want instant gratification, so if online shopping doesn't provide convenience or value beyond the in-store experience, many customers won't do it. However, a recent 2014 survey by Ipsos/PayPal found that 43 percent of consumers that shop online do so because it saves them time and money.

There are a couple of ways merchants can increase the share of consumers that appreciate the value and convenience of buying online. Buy-online-pickup-in-store (aka BOPIS) is a feature that merchants can offer to make purchasing even easier than in-store, while also serving consumer appetite for immediate pick-up.

Free shipping can also fulfill consumer demand for convenience. According to a recent comScore report, free shipping is the most compelling factor for 81 percent of Americans in deciding to finalize online purchases. In addition to driving additional conversion, free shipping is proven to increase average order value.

Myth 3: Online purchase returns can ruin a business

Some merchants are concerned that driving online shopping — especially through free shipping — can lead to return rates which are uneconomical and create bad customer experiences. The facts would indicate otherwise. Merchants are actually driving growth by making returns of online purchases even easier. Research from Forrester found that free return-shipping drives increased sales, with 81 percent of consumers surveyed indicating a higher likelihood of shopping and being loyal to online retailers that offer an easy return policy. Other merchants are also offering shoppers that purchase online the convenience of in-store returns with BORIS (Buy Online; Return In Store).

Don't let the myths stop your customers from buying your goods online!

 

Dan Leberman is vice president North American online small & medium business unit for PayPal.

Photo courtesy of Tim Reckmann, flickr