Every month, Nielsen Online / Marketing Charts posts the top 10 converting ecommerce sites. If you follow the updates, you’ll see usual suspects like Schwans, Proflowers, 1800flowers, Office Depot and QVC popping up month after month. Sure, a lot of these retailers enjoy high conversion rates for no-brainer, repeat purchases but that kind of loyalty is earned — and requires a smooth checkout process to make it happen.

One of the worst culprits for friction in the checkout process is required registration. Forrester Research reports that 23% of customers abandoned the last online store that asked them to register.

In a usability test for a major online retailer, Jared Spool found new customers resisted registering, and some weren’t sure if they had registered before or not, entering various email address and password combinations in hopes they wouldn’t have to register. Others were suspicious the retailer would spam them with sales emails if they registered.

“Very few” repeat customers remembered their login information, and worse, many had multiple email addresses that had changed over the years. Guessing email/password combos gets frustrating, and of those who eventually clicked “Forgot password?” only 25% ever tried to finish the checkout! Further analysis of the customer database revealed 45% of registered customers registered multiple times, some as many as 10. If this happens on your site, it’s a big problem - you have frustrated users and dirty data - you overstate your unique customers and understate your repeat purchase and lifetime customer value data.

Jared’s recommendation was to replace the Register button with Continue, and adding “You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.” Conversions increased 45%, bumping annual online revenue by $300 Million.

Back to the top converting sites, I’ve checked them all out to see how they handle registration. Interestingly, some like QVC and Schwans (yeah, the one with the 50% conversion rate) still require registration. Exclusivity of product/service may afford them to get away with this, but makes you wonder how many millions are left on the table.

Of the top converting sites, I have a few favorites. I hope these designs inspire you as you consider your own checkout optimization:

Proflowers

• Prominent 1-800-Number
• Security is reinforced at the top with “Secure Checkout”, in the “Sign in Using Our Secure Server” and at the bottom with security seal.
• Order details are shown with thumbnail image
• Shows the number of steps in checkout
• Very clear that guest checkout is an option, even uses “Proceed as Guest” on call-to-action button
• Links to privacy policy

1-800-Flowers

Like Proflowers, 1-800-Flowers allows for easy guest checkout, shows number of steps in checkout process and provides a toll free number but does not use any security assurances (although I may be seeing a test version with them removed). Because people read English left to right, I prefer the guest checkout on the left. Why subject a customer to friction if you don’t have to?

LL Bean

LL Bean provides 3 options but my suspicion is 2 is more effective. Whenever you offer more choice, you have higher risk of abandonment. Allowing the customer to create an account after checkout would satisfy both types of new customers - those who want to create an account and those who don’t. Unless…

J.Jill

…I like J.Jill’s approach to account creation. It lists the benefits of membership, shows all the fields required to sign up (so customer can decide whether they’re comfortable with providing personal information and believe sign-up time is reasonable).

I would also like to see the guest checkout option on the left and a more prominent privacy / security assurance on both LL Bean and J.Jill.

Amazon

I’ve seen the exact Amazon sign-in design also used by other major retailers and Amazon does many things well:

• “Ordering from Amazon is quick and easy” <-- addresses the fears and uncertainties about the difficulty to check out
• Captures an email address as the first step so Amazon can send a triggered email should something go wrong (You have items in your cart and didn’t complete checkout, did something go wrong? How can we help?)
• Asking for minimal information in the first step vs. asking for a lot of information may convert higher, customers perceiving it as simpler/easier (reinforces the promise “this will be a breeze”)
• You have to create an account, there is no guest checkout option but “you’ll create a password later” makes it sound like that doesn’t matter
• “Sign in using our secure server” is a good call to action to proceed.

How do you motivate customers to register? Forrester’s survey found 51% of respondents were somewhat or very willing to part with personal information in exchange for discounts, 40% to save time and 27% for a more personalized experience. Make sure you mention at least one key benefit for registration when asking for it.

BoldChat recently released research on The Effectiveness of Live Chat Technology which surveyed 264 US shoppers who consider themselves regular online shoppers.

One of the findings I found most interesting was the most common reason site visitors would initiate live chat is if they experience an error during the checkout process (76%). Other reasons include asking general questions about products/services/policies, sales specials or inquiring about orders already placed.

Participants were asked to rank communication methods in order of preference for various situations. For problems in checkout, participants ranked chat first, then phone, then email. (Of course, Twitter is also an option!)

It’s not surprising that people would rather chat with customer service right away, online rather than pick up the phone, wait on hold or wait indefinitely for an email response.

If you do offer live chat, make sure customers can initiate a chat session from each step in the checkout process. This is especially important if you remove your regular site navigation in checkout as many sites do.

In the report, BoldChat also offers a couple useful tips:

1. Remind customers that live chat is an option if they’re waiting on hold for customer service by telephone.
2. Publish average wait times for all communication methods on your Contact Us page.

If you’re interested in the entire research, you download the report here.

On my most recent visit to Entertainment Earth, I added a Star Trek item to my cart and I saw this “carrot”*

* “Carrot” is a term for a message in the cart that tells you you’re $X away from a promotional offer - usually free shipping. Amazon’s Super Saver Shipping is a classic example.

I thought to myself — whoa, I’m being shown a personalized offer based on my browsing habits! This is HUGE! Then I realized after trying other category items that I had once again confused Star Trek with Star Wars. Hey, it’s an honest mistake, right?

But think of the impact this could have if retailers served more relevant incentives in the cart based on a customer’s session browsing history or purchase history. By “tagging” customers who click on certain categories or products, search for certain keywords or arrive from search engines through certain keywords - relevant carrot offers could be swapped in lieu of a generic “free shipping” or default giveaway product for all customers.

The tagging concept could also be applied to what kind of products are sitting in the cart. Perhaps you sell name brand and house brand items (Whirlpool and Sears’ Kenmore, for example). When your house brands have higher margin, you can offer free shipping at a lower cart threshold than branded items.

These are just a couple ideas for dynamic, personalized merchandising. Really, the possibilities are endless.

I recently posted How Much is Your Coupon Code Box Costing You? which addressed the problem of customers searching for coupon codes when they see a coupon box in the checkout. If the customer grabs an affiliate code, not only do you have to discount the product or shipping cost, but you also have to pay your affiliate a commission for a sale that really wasn’t initiated by that affiliate.

Office Max takes another approach - show the coupon box with a link “How do I get these?”

When you roll over the box, you see this:

Promo codes are available to email subscribers - an incentive to opt in to the email list, whoopee! I think this is rather brilliant.

Unfortunately, Office Max doesn’t link to the email sign up in the box. Fair enough, you want the customer to complete the transaction. You could add an opt-in checkbox on the cart summary page that doesn’t hijack the customer out of the checkout process.

Another hiccup is the email sign up is only accessible from the home page. Perhaps putting it in the header or footer would make it easier to find, or would increase sign ups when people land on the site on a product page.

There’s also no way for the customer to enter a promo code right away without signing up for email and waiting for the first code. Worst case scenario, customer defers the purchase until they can get a promo code and abandons cart.

Hat tip to Jason Billingsley for spotting this.

When a web-savvy customer sees a promo code field in the checkout process, it’s a call to action - a call to search Google for a coupon code, and there are plenty of affiliate deal and coupon sites to be found. (Hey, even Alan Rimm-Kaufman does it!)

This action is a distraction and can cost you big bucks — especially if in this economy you’re already heavily discounting your merchandise.

There’s no shortage of coupon sites in search results:

How Coupons Can Clip You

1. The coupon immediately eats your margin by X% and an additional Y% for paying the affiliate who didn’t refer the customer, only cherry picked the commission.

2. Depending on how you track channel conversion, you may be cannibalizing other marketing channel attribution like email or SEO.

3. You erode trust with the customer and potentially damage your brand. Coupons can cheapen your image, and you condition the customer to expect a discount next time too. They may never pay full price from you again.

Fixing the Problem

Is the solution to cut out coupon offers? No, rather cut out the coupon box at checkout, and show it only to customers who have a coupon code. There are a couple ways to handle this:

1. When a customer arrives via an affiliate link or email with a promotion, the URL includes a parameter indicating the shopper has a promo code which is stored in the shopper’s session. When the shopper arrives at the checkout page, the parameter is looked up in the session and the box is displayed. Customer enters promo code manually. All other customers do not see a box.

2. The URL parameter includes the promo code and the discount is automatically applied at checkout. The customer does not need to enter a code, nor does a coupon box need to be displayed.