Online checkout is a critical moment in the ecommerce process. After marketing, funneling, advertising and coaxing, checkout is the “make it or break it” moment of digital consumption.
Yet, an astounding number of would-be online purchases never happen: According to Baymard Institute, nearly 70 percent of online shopping carts are abandoned. Why? The number one reason the study’s respondents (24%) selected for why they abandon carts was that “The site wanted me to create an account.”
Obviously, account creation is a major friction point for consumers. It’s also a dual-edged dilemma for operators. A solution may lie in guest checkouts, which allow customers to check out as a guest without creating an account or signing into an existing account.
The decision whether to offer guest checkout or not is a critical one. Closing the sale and initiating the beginning of a loyal customer relationship depends on having as simple and efficient a checkout process as possible, and enabling guest checkout can help you increase conversions by making checkout more straightforward. But there is a downside: the loss of precious customer data. Brands spend a lot of money to collect and analyze this data, and the thought of allowing that investment to slip away so close to the moment of sale can seem unthinkable.
Benefits of Guest Checkout: Less Friction
The appeal of guest checkout is all about reducing or eliminating friction during the ordering process. Creating an account takes time, effort, and requires consumers to provide additional information they may not want to share.
E-commerce research shows that brands typically have four minutes or less before most consumers (66%) become frustrated with the online checkout process, and 28% expect checkout to happen in two minutes or less. Therefore, it’s critical to focus on making the purchase process as fast and seamless as possible. With guest checkout, there are fewer steps in the checkout process for new guests, so they can place orders faster.
Privacy concerns are another friction point during checkout. Consumers value their privacy and may be concerned about being inundated with marketing material from restaurant sites. Requiring an account may make consumers feel like they are being forced to make a ‘commitment’ to the brand. Forty-seven percent of consumers like guest checkout because they don’t need to provide as much personal information. Once they have had a positive experience with your brand, consumers may feel more inclined to create an account (and share their personal data).
Guest Checkout Challenges: Less Personalization
A sizable portion of customers will take you up on the “checkout as guest” offering if it’s available. However, the impact of that decision is momentous. For the brand, every best practice, every hard-won customer insight, every personalization technique goes out the window when shoppers choose to utilize guest checkout.
Brands must maximize the lifetime value of customers to flourish. An anonymized “checkout as guest” transaction leaves no opportunity to build trust with the customer—and trust is the primary factor that drives brand loyalty. Seventy-seven percent of consumers say they are more likely to continue doing business with a brand when they’re a loyalty program member; however, a huge opportunity to impact customer spend is lost when loyalty program engagement efforts are thwarted by guest checkout.
Finally, personalization suffers under the guest checkout model. The kinds of über-customized digital experiences that consumers expect today are only possible by knowing who your customers are and what they like. When customers checkout as a guest, brands lose the ability to tailor marketing campaigns and suggest the very items a customer may enjoy the most.
A Solution to Guest Checkout for Restaurants
It’s clear that guest checkout reduces friction in the payment process, but in exchange for the ease of use, brands give up on knowing their customers. Whether guest checkout is a good idea for your business depends on several factors, including: how often your customers place orders and reorders, your customers’ level of account fatigue, and your ability to use customer data. The good news is that you don’t have to eliminate guest checkouts to get information that’ll influence your marketing and customer experience.
In general, guest checkout is best suited for businesses oriented to one-time sales. Restaurants, however, represent the opposite of this. Many customers always order the same thing at their favorite quick-serve and fast casual establishments, so it is helpful to be able to save orders for easy reference next time. If you notice that potential customers begin the online checkout process but don’t complete it, requiring account creation could be the reason why, and enabling guest checkout may help.
You can also encourage more customers to create an account by prominently listing the benefits or offering an incentive such as a discount or free item for signing up. If customers fully understand the benefits of creating an account, they may be more apt to take advantage of them.
A popular choice that’s recommended by Baymard is to accommodate individual preferences by giving customers both the option to checkout as a guest or create an account. With this strategy, you can encourage more customers to create an account by listing the benefits of having one or offering an incentive.
To increase ease of use even further, you may offer the option to sign up using third-party verification such as Google or Facebook. This way, customers don’t have to fill out any forms or create new passwords and brands still get accurate customer data. It is also possible to eliminate the need for passwords with biometrics where customers can simply enter their fingerprint or scan their face through a facial recognition system to sign in.