Composable Checkout

The checkout abandonment problem

Cart abandonment is a significant issue, with an average rate of 72%. Out of 100 customers who add products to their cart, only 28 complete their purchase, leading to over $6.5 trillion in abandoned merchandise annually.

Cart abandonment is measured by the number of orders placed divided by the number of carts created. This part of the shopper journey involves two key steps: adding items to the cart and completing the order on the checkout page. According to the data, more than half of the shoppers who create carts proceed to the checkout. These shoppers have a higher intent to purchase than those who abandon their carts. Thus, the problem is better described as "checkout abandonment" rather than "cart abandonment."

Drivers for checkout abandonment

We have established that the checkout process is a critical part of the customer journey, and many brands are losing potential revenue at this stage. But why are customers abandoning their checkouts?

There are many reasons for this. While some factors, like shipping costs, are unrelated to the checkout itself, others such as a complicated checkout process, mandatory account creation, or lack of payment options can be resolved at checkout.

One surprising fact is that 6% of shoppers abandon their checkout when they see a discount code field. They go searching for a coupon online and often never return to complete their order.

Rigid default checkout

Despite these checkout issues leading to significant revenue loss, why do brands struggle to address them? The main reason is that many monolithic platforms were designed long ago with limited options for payment, shipping, promotions, and other features. The primary objective of the checkout process used to be securely handling payments. Consequently, these platforms developed a rigid, embedded checkout system that is difficult and expensive to modify.

As a result, brands have been forced to stick with the default checkout system and accept the status quo for a long time. This rigidity has hindered their ability to adapt to changing customer expectations and incorporate necessary improvements to reduce checkout abandonment.

Minimizing checkout abandonment with checkout flows

Optimizing the checkout process to minimize checkout abandonment necessitates the ability to customize it for different segments of shoppers based on various factors such as the shopping channel, device type, and more. By tailoring the checkout experience to specific user segments, brands can address unique preferences and behaviors, enhancing convenience and reducing friction. For instance, mobile shoppers might prefer a simplified, touch-friendly interface, while desktop users might appreciate more detailed options and information. Additionally, tailoring checkout options based on geographic location or customer loyalty status can further personalize the experience, leading to higher checkout completion rate. These distinct tailored checkout experiences are called checkout flows.

Checkout flow is an optimized checkout experience individually designed to serve a specific set of shoppers based on user-defined criteria, such as the device they're using, their screen size, or the items in their cart.

Making checkout flows possible with MACH

Composable Commerce enables checkout to become a first-class citizen within the commerce stack, allowing brands to select and implement the checkout solutions that best meet their needs. The MACH architecture underpinning Composable Commerce empowers brands to create personalized checkout experiences by facilitating creation of checkout flows.

Microservices architecture enables the checkout process to be seamlessly integrated into an existing commerce infrastructure while allowing it to scale independently. This is particularly beneficial during high-traffic events like Black Friday, where the checkout system can handle peak volumes without impacting the rest of the system.

An API-first approach allows users to check out from any physical or digital channel, providing a consistent and flexible shopping experience. This means that whether a customer is purchasing through a mobile app, a website, or even an in-store kiosk, the checkout process remains unified and efficient.

Cloud-native infrastructure supports on-demand checkout consumption, enabling brands to deploy the composable checkout alongside existing legacy systems. This minimizes transition costs and risks, as the new checkout system can be tested and rolled out incrementally.

Headless checkout architecture allows for the creation of various checkout frontends, such as one-page, three-page, or drawer checkouts, and different checkout designs. By separating the frontend presentation layer from the backend functionality, headless checkout enables rapid customization and innovation, ensuring that the user interface can evolve independently from the backend systems.

Checkout Flows Examples

To make the checkout flows concept more tangible, here are some of the examples:

• Social Flow
  In the social flow, a user clicks on an advertisement and is taken directly from the ad to the checkout page. This streamlined process minimizes the steps between discovering a product and purchasing it, reducing potential drop-off points and capitalizing on the immediate interest generated by the ad. This checkout flow has to be known to convert at higher than 10%, which is up to 5x better than a baseline conversion rate.
  
• Checkout from Blog
  In the checkout from blog flow, a user reading a blog post that mentions several products can purchase all the featured items directly from the blog without leaving the page. This integrated shopping experience keeps the user engaged with the content while facilitating easy, one-click purchasing. By embedding checkout functionality within the blog, brands can enhance user convenience, reduce abandonment rates, and leverage content-driven commerce to drive sales.
  
• Dynamic Payment Options
  In the dynamic payment options flow, users are presented with different payment methods based on their cart value. For instance, if the cart value is high, options like Buy Now, Pay Later (BNPL) are offered to provide greater flexibility and ease of purchase. Conversely, for lower cart values, these options are not shown to keep the checkout process simple and streamlined. This tailored approach ensures that customers have appropriate payment choices that suit their purchasing power.

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