As discussed in Monday’s post Profiting from the Digital Goods Boom, consumption of digital goods like software, music/video, digital files and subscription content is growing rapidly – and more online sellers will be offering digital products. As the ecommerce “game” changes, how must the checkout process evolve to adapt to digital goods?
The nature of digital goods makes the checkout much simpler – there is nothing to ship, so there is no need for the shipping address or shipping method steps. But for sellers who offer a mix of digital and physical goods, there is added complexity that adds to the standard ‘physical goods’ checkout workflow.
Consider Amazon, which offers a range of physical products with digital goods counterparts – Kindle ebooks, software, videos, music and games. When a customer is looking at a physical product that is also available in digital format, Amazon does a great job of cross-selling the (sometimes) cheaper digital version.
In this example, the digital version sells for $24.28 vs $20.29 for the CD version, hence Amazon chooses not to display the price in the cross-sell spot.
Interestingly, Amazon has no shopping cart for digital goods. Digital goods cannot be added to cart and thus purchased in the same transaction as physical goods, they can only be purchased one at a time (see the “Buy and download” button, vs the “Add to Cart” button).
Consumers who wish to buy multiple songs from the Amazon MP3 store will need to repeat the checkout process for each one. For Amazon, the most likely reason digital goods can’t be added to cart is tax rules for digital goods and physical goods differ. Physical goods are taxed on the shipping address, digital goods are taxed based on the billing address, making tax calculation difficult in a mixed cart scenario. Also, payment becomes complex as the payment for digital goods must be captured immediately, while the physical goods cannot be captured until shipment.
In the UK, Play.com has tackled this issue head on with a single cart and checkout experience for physical products, digital goods and services.
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MP3’s can be added to the cart alongside other items. Users can download their digital purchases from the receipt page and at any time in the future via their online account. The store also supports the sale of pre-release MP3’s, users are notified on the release date via email when they are available for download.
So what makes a good digital good checkout experience?
1. Allow customers to buy digital product and physical products in the same cart. As digital goods become more widespread, customers will get frustrated if they have to do multiple checkouts to buy different product types or buy more than one digital product at a time
2. If the cart does not contain products that must be shipped, simplify the checkout process by removing the shipping address and shipping choice steps.
3. If a customer adds a physical product to the cart and you sell a digital version of the same product, consider a cross-sell suggestion to the digital version in the cart. If the digital version is cheaper the customer will be happy while you save on inventory costs, warehouse labor costs and possibly shipping costs if your store offers free shipping.
4. Provide assurances during the checkout about how the customer will be able to download their purchased goods, and how they can re-download them in the future. Will there be a link on the receipt page, or will their be a separate confirmation email with a link to download? If the customer needs any special software (e.g. Adobe Flash) to view or listen to the content they buy, make sure this is clearly communicated during the checkout and provide links for them to download and install this software.
5. Strive for a one page checkout. Digital purchases only need an email address, billing address and payment details. This makes it simple to have a simple one page checkout process. Also for customers that already have an account with saved payment preferences consider adding a one click purchase option on the product details page or the checkout. This makes it easy for frequent purchasers to quickly acquire new content e.g. music or TV episodes.
In our next Elastic Path ecommerce webinar Monetizing Digital Content – The rocky Road Ahead, we’ll examine various business models for digital content, along with consumer research on attitudes towards consuming and paying for online content. Click here to read more and register for the webinar, happening, December 8 at 9am PST / 12pm EST.