Consumer buying behavior and its effect on e-commerce conversion rates

Consumer buying behavior can have a major impact on e-commerce conversion rates and revenue. If businesses don’t meet customers with the personalized and frictionless experiences they crave, they risk increasing cart abandonment and sending shoppers to competitors’ stores.

That’s why it’s important for large enterprises to understand how online shopping behaviors have changed and how psychological, social, and economic factors can influence people’s decision to buy. Merchants can then use these insights to optimize their conversion rates and improve customer experiences.

Learn more about the latest consumer buyer trends and how PayPal’s payment solutions can help you increase conversions and maximize revenue.

Key consumer buying behavior trends

First, let’s unpack the latest consumer buying trends that are impacting how, where, and why people complete their transactions.

Mobile shopping

Mobile shopping allows customers the convenience of checking out right from their smartphone or tablet. That’s why U.S. mobile commerce sales are expected to reach $558 billion and account for over 44% of all US e-commerce payments in 2024.1

Alternate payment methods

Consumers are seeking alternate payment methods for quick, safe, and more accessible checkout experiences. Recent payment technology trends include digital wallets, cryptocurrencies, and buy now, pay later options.

Learn more about providing alternate payment methods for changing consumer behavior.

Omnichannel experiences

Omnichannel shopping experiences are on the rise as consumers now research and shop both in-store and online.2 In fact, a 2022 study shows that omnichannel customers have been found to shop and spend more than customers who use a single channel.3

That means brands have a major opportunity to offer omnichannel options like buy online and pick up in store, curbside pickup, mobile payment methods at checkout, and digital kiosks within their retail locations.

The psychological, social, and economic drivers of e-commerce conversion

Many factors influence consumer buying behaviors — from economic instability and social influence to psychology. Understanding these influences can help brands gauge why consumers have certain preferences and how to reach them with future-ready commerce experiences.

In the face of a potential recession, for example, 54% of U.S. consumers are looking to reduce their discretionary spending and 43% are budgeting in general. As a result, 60% prefer shipping and returns and almost half would like promotions to help overcome these e-commerce challenges.4

Customers may also seek more control over their buying process. So merchants can use personalization in e-commerce to help increase conversions. For instance, they can give shoppers the option of using buy now, pay later solutions at checkout to spread out their payments and have greater control over their spending.

The cost of ignoring consumer behavior

For many customers, their buying preferences aren’t just nice to have; they’re fundamental to the online shopping experience. So if businesses fail to meet these changing consumer expectations, they could see high cart abandonment rates and lose valuable revenue. That's why adapting to changing customer values is so crucial.

Going further, common reasons for high abandoned cart rates include:

  • Extra costs. The top reason for cart abandonment is extra costs, such as shipping, taxes, and fees: 48% of US consumers have abandoned online purchases because of added costs at checkout.5
  • Long and complex checkout processes. 22% of consumers have abandoned their cart because they had to create a new account to complete their transaction. Almost 20% left because of a long or complicated checkout process.6
  • Poor shipping options. Nearly 23% of consumers say slow delivery caused them to abandon their carts at checkout.7

Transforming consumer behavior into conversion power

Once you understand the nuances of online shopping behaviors, you can use these conversion rate optimization strategies to improve customer experiences:

  • Personalize offers. Provide personalized online shopping experiences [Link to the new LE article to be published ‘Is personalization the future of retail’] by tailoring product recommendations and marketing messages to each customer based on individual user data and behavior.
  • Simplify the checkout process. Create a frictionless checkout experience by offering customers’ preferred payment methods and one-click payment solutions. Include a guest checkout option in case customers don't have time to register and sign up. Also, use mobile checkout optimization strategies to improve responsiveness and load times across devices.
  • Leverage social proof. Incorporate customer testimonials, user-generated content, and influencer collaborations throughout the buyer journey to increase perceived value and motivate shoppers to follow through on their purchases.
  • Engage in data-driven decision-making. Use analytics to track consumer buying behaviors, measure the impact of new strategies, and continuously optimize the checkout experience.

Harnessing evolving consumer expectations with PayPal's solutions for enhanced conversion

Today’s customers expect personalized shopping experiences, diverse payment options, and swift checkout processes. Merchants should meet these expectations if they want to increase conversions and gain a competitive advantage in e-commerce.

That’s where PayPal can help. Deliver frictionless experiences that boost revenue and meet customers wherever they shop. Provide a range of preferred payment methods like digital wallets and buy now, pay later options. Streamline checkout with one-click payment solutions. And optimize your strategies to meet evolving consumer expectations — so you can future-proof your business and fuel growth.

Learn more about how to reimagine your checkout with PayPal.

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