Combating Cart Abandonment: A Guide to 'Buy Now Pay Later' and 'Try Now Buy Later' Solutions

A study by Barilliance found that the average ecommerce cart abandonment rate sits between 70-80% -- to contextualize, over 3/4 of shoppers that have discovered a Brand, visited the site, and had enough interest to add items to their cart, are ultimately choosing to leave that site without completing the purchase.

To tackle this problem, we first need to understand what is holding potential customers back from finalizing their purchases?

The two most common scenarios are:

1. PRICE HESITANCY

When shoppers that are determined to purchase a product are faced with the final cost during the checkout process, many of them are unable to pay for the whole purchase upfront and decide to abandon their cart.

2. PRODUCT HESITANCY

First-timers to a brand or return shoppers looking to try a new item they haven’t touched or seen for themselves are less willing to commit to a purchase and will abandon carts when asked to pay in the face of uncertainty. They’re interested in the product, but aren’t ready to pay for something they are unsure about.

How can we think about the “cost” of this abandonment? Let's assume a site has 50,000 monthly visitors, a 3% conversion rate, and an average cart size of $100. For the 1,500 conversions this Brand is seeing, there were another 4,500 abandoned carts. Capturing even 20% of these abandoned carts would drive $90,000 in incremental monthly revenue -- a 60% increase!

But recapturing these carts is a lot easier said than done.

STEP 1:

The first step in order to reduce cart abandonment is to follow best practices in checkout design. This includes:

Showing the total costs of the cart -- including items like shipping and taxes -- early and often, in a way that is plain to the shopper

Making it easy for customers to navigate back and forth between viewing their cart and continuing to shop

Optimizing overall site and checkout performance, and making sure this same high quality experience translates to mobile devices. (If you’re a merchant using a solution like Shopify or BigCommerce, these best practices are already being handled for you.)

STEP 2:

Once this has been established, your brand is ready to move to more advanced solutions that will address issues around price and product hesitancy. After determining which problem needs to be solved, your brand can access these two powerful ways to address hesitation around price by changing how and when a shopper pays:

Buy Now Pay Later (BNPL): Buy Now, Pay Later solutions give the shopper the option to purchase and receive an item today, but pay for that item over time in equal installments. In this way, BNPLs help shoppers purchase something they know they want but might not be able to afford in one lump sum, and are tackling the problem of affordability and access to credit.

BNPLs help brands expand the reach of their customer base by making their price points more accessible, and providing access to more affordable credit than the average credit card. BNPL solutions like Affirm, Afterpay, and Klarna have been so successful that Apple recently announced a future launch of their own version of BNPL.

Try Now Buy Later (TNBL): TNBLs, by comparison, help brands convert hesitant shoppers who are interested in the product, but struggling to pay up front for something they are unsure about. With TNBL, shoppers fill their cart and checkout for $0. Their living room transforms into the fitting room as they experience the product at home during a trial period. At the end of the trial, the shopper is only charged for items that they keep.

Brands that offer TNBL to their shoppers de-risk the purchase for the shopper, and see increases in conversion and cart size, as well as more efficient marketing KPIs. The TNBL messaging drives increased ROAS and reduction in CPAs.

Although BNPL and TNBL sound like similar offerings, both solutions provide distinct experiences that address different business challenges. Both can coexist on your site, or stand on their own. BNPL helps shoppers afford an item they know they want to buy, while TNBL gets the product into the shoppers’ hands, so they can decide if this is an item they will love.

If you have an amazing product but you struggle moving sticky metrics like conversion, TNBL is the answer. If you want to reduce affordability barriers for customers purchasing a high price-point product, BNPL is a good option.

At Assembled Brands, we are relentlessly focused on helping small businesses navigate e-commerce growth by providing rapid financing, data-driven business insights, and an unrivaled network. This is why we’re proud to include TryNow in our Partner Network.